Local Minnesota drink maker Northern Soda Co. carved out its corner of the market by being different, but it’s now facing competition from industry giants fueled by changes in Washington.
Coca-Cola and Pepsi are both introducing products made with cane sugar in response to the health-related MAHA movement led by Secretary of Health and Human Services Robert F. Kennedy Jr.
It’s the latest external factor disrupting Northern Soda’s business. It’s also navigating the high cost of aluminum caused by tariffs.
Co-founder Davod Zarghami is optimistic, though, that the widespread attention presents an opportunity to highlight Northern Soda’s value proposition, which emphasizes small-batch lines and also includes dirty sodas.
“From our little neck, it is interesting to see the dynamic,” Zarghami said. “I’m curious about what they’re going to do, but part of that is flattering ourselves, too, because we don’t have to get too caught up in what Coca-Cola is doing.”
Northern Soda is a small, regional player in the beverage industry, one that was built on 1950s-style recipes, emphasizing lower carbonation, more flavor and no high fructose corn syrup. The big players, meanwhile, aren’t necessarily targeting the same customer base.
Davod and Tanya Zarghami are optimistic Northern Soda Co. can compete, even with Coke and Pepsi introducing cane sugar versions of their cola in the U.S. (Carlos Gonzalez/The Minnesota Star Tribune)
The downside of Coke and Pepsi’s gamble, besides the competition, may be the availability of cane sugar. It only makes up about 30% of American sugar supplies, according to the U.S. Department of Agriculture.