From PepsiCo to Taco Bell, Dirty Soda Sweeps the Nation

Originating from the Utah-based beverage chain Swig in 2010, the concept of 'dirty soda' is now propelling a revival in the carbonated drink industry, reaching as far as major player PepsiCo.

Dirty soda involves using soda as the base, which is then enhanced with various syrups, cream, or other ingredients to create a unique drink. Swig holds both credit and a trademark for initiating this trend, which has gained additional attention through TikTok and the TV show 'The Secret Lives of Mormon Wives,' enabling it to spread rapidly beyond the initial chain's expansion.

Today, this beverage style has proliferated to supermarkets and fast-food establishments across the country.

PepsiCo Joins the Trend

Pepsi is gearing up to introduce two new canned beverages inspired by dirty soda at the upcoming National Association of Convenience Stores trade show in Chicago. Following the earlier release of Pepsi Wild Cherry & Cream, they are set to debut Dirty Dew and the Mug Floats Vanilla Howler.

Mark Kirkham, Chief Marketing Officer for Pepsi Beverages North America, highlighted to CNBC the opportunity for consumers to revisit soda in a new-old-fashioned way, likening it to historical soda fountains and root beer floats.

Beverage Trend Attracts Restaurants

The allure of dirty soda isn't limited to beverage companies; it's also appealing to restaurants. Data from Datassential indicates that now, 2.7% of U.S. dining establishments feature a carbonated soft drink incorporating cream or milk, a notable rise from 1.5% a decade earlier.

Establishments like TGI Fridays have tried limited-time offerings of dirty soda, some of which can be mixed with alcohol. McDonald's is also testing drinks like the 'Sprite Lunar Splash' in over 500 outlets after ceasing operations of their drinks division, CosMc's. Taco Bell has similarly experimented with exclusive limited-time options like the dirty Mountain Dew Baja Blast.

Swig's Influence on the Market

Swig has expanded to more than 140 locations across 16 states, reporting an 8.2% increase in same-store sales this year. Investment firm The Larry H. Miller Company acquired a majority share in Swig in 2022.

CEO Alex Dunn compares Swig's impact on soda to Starbucks' revolution in coffee. The model is emulated by competitors like Sodalicious, Fiiz, and Cool Sips.

Restaurant chains find adding dirty soda to menus straightforward. According to Erica Holland-Toll of The Culinary Edge, it's about repurposing existing resources like soda fountains and creamers.

Soda's Rising Popularity

The trend assists beverage companies by combatting the long-standing decline in soda consumption. After peaking in 2004, soda consumption has seen a resurgence, spurred partly by the dirty soda phenomenon.

As Holland-Toll noted, dirty soda provides a lighter, less caffeinated alternative to coffee, attracting younger consumers, especially those seeing it on social media or shows.

For many, dirty soda serves as an affordable indulgence, attracting a diverse customer base eager for novelty without a significant expense, as noted by Sally Lyons Watt from Circana.

Innovative Product Launches

Consumer interest in dirty soda generates a new market for beverage companies, hinting at gains in soda's popularity. This trend has led to the successful launch of products like Dr Pepper Creamy Coconut and Pepsi Wild Cherry & Cream.

Katie Webb from Dr Pepper highlighted that these offerings attract new consumers and drive interest back to longstanding soda brands. With Dirty Dew and the Mug Floats Vanilla Howler on the horizon, PepsiCo anticipates continued consumer experimentation.