The beverage industry is at a really exciting inflection point.
Creating an Intoxicating Atmosphere
“Dirty soda,” a cult trend first popularized by Utah’s Swig in 2010, is now front and center. This innovative drink combines carbonated soft drinks with flavors, creams, and syrups, creating a unique experience that appeals especially to younger consumers. Swig, the trailblazer of this movement, has grown by leaps and bounds, with more than 140 locations in 16 states. That company’s remarkable success is best illustrated by its breakout 8.2% same-store sales growth and solid $4 billion market cap so far this year.
Dirty soda isn’t only a local fad in the making. It’s quickly making waves before it reaches the big leagues. PepsiCo and McDonald’s are trying to capitalize on the trend at their end. McDonald’s is even starting to introduce limited-time offer menu items, like, get this, a dirty Mountain Dew Baja Blast! PepsiCo is going to introduce two new dirty soda-inspired ready-to-drink variants. This thrilling news will be made at the National Association of Convenience Stores’ forthcoming trade show in Chicago, underscoring PepsiCo’s increasing investment to grow this innovative market.
Now, dirty soda is winning the hearts of Generation Z consumers. Such is the adventurous and entrepreneurial cultural moment of this generation and their taste in libations. More than charts, nearly three-quarters of this demographic try out a new beverage trend each month. This kind of behavior makes them an exciting target market for innovative brands. Alex Dunn, a representative from Swig, notes the impact of this trend, stating, “I think we’re doing for soda what Starbucks did for coffee.”
The success of dirty soda has brought the concept into other food establishments. TGI Fridays recently launched a dirty soda as a limited-time offering with the option to spike it with alcohol, expanding its appeal even further. Restaurants and coffee shop chains like Dutch Bros. have adopted dirty soda by integrating it into their offerings. They appreciate that, compared to regular coffee, the carbonation creates a less heavy mouthfeel.
Consumer preferences are changing. So, overall, the per-person consumption of carbonated soft drinks has begun to increase again after decades of decline. By 2025, experts expect demand to increase to nearly 11.88 billion gallons. This is a good bit higher than the projected 11.87 billion gallons for 2024. That’s quite a turnaround after hitting a high point consumption rate of 15.3 billion gallons in 2004.
It’s Swig’s flagship drink, the Dr Pepper Creamy Coconut, that really takes the cake. It has since become the company’s most successful limited-time carbonated soft drink in history by retail dollar sales. The drink is just one example of how dirty soda is driving innovation throughout the beverage marketplace. Mark Kirkham from PepsiCo emphasizes the opportunity this trend presents: “I think it’s a great opportunity for people like us, like PepsiCo, and for consumers to experience soda in a new way — and in some ways, an old way.”
It’s the widespread accessibility of dirty soda that makes it different from other recent beverage trends. Unlike more complicated coffee creations, dirty soda provides a cheaper, more playful indulgence that’s accessible to a broad demographic. As Sally Lyons Watt points out, “It’s an affordable fun treat. You’re not going out and spending $30 or $50, right?”
Human resources professional Holly Galvin, 31, has already gone all-in on the trend, making her own dirty soda concoction. She starts with Diet Dr Pepper, adds pumpkin spice creamer and tops it off with a dash of pumpkin pie spice. This mouthwatering pairing is just one example of the magic that dirty soda ignites within its enthusiast creators. Kirkham elaborates on this customization aspect: “I think it’s actually giving [consumers] the chance to experiment even more and customize more.”
Experts believe that trends originating in retail often transition to foodservice, further integrating innovations like dirty soda into everyday dining experiences. Lyons Wyatt explains that this transition is a result of the consumers’ preferences and habits evolving.