Dalston’s Soda began in an unlikely place, a nightclub in East London. What started as small-batch drinks made for club nights has grown into a national soft drinks brand, shaped by changing consumer expectations, regulation and a long-term focus on health without sacrificing flavour.

Founded by Duncan O’Brien, Dalston’s journey mirrors the wider transformation of the soft drinks category over the past decade.

Dalston’s story started at Passing Clouds in Dalston, where O’Brien and a small group of chefs were making drinks using ingredients sourced from Ridley Road Market.

As he puts it, “Dalston started life in a nightclub called Passing Clouds in Dalston. We were really a group of sort of ragtag chefs… making what we call Dalston Cola, from ingredients we found at a market up the road called Ridley Market.”

What began as a fun side project quickly gained traction. Encouraged by early reactions, O’Brien began producing the drinks on a small scale, bottling them in the back of a restaurant after taking out a £300 payday loan to buy empty bottles. A chance meeting with an accountant led to a £5,000 investment, allowing the team to set up a small workshop factory in Hackney Wick. Over the following two and a half years, the business produced around half a million bottles.

The business reached a pivotal moment in 2017. Ahead of raising significant investment and building a second factory, it rebranded from Dalston Cola Company to Dalston’s Soda and committed fully to the mass market.

“We had three fantastic years of growth 2017, 18, 19,” O’Brien says. “2020 took the wind out of our sails a bit but we were lucky not to decline.”

O’Brien’s view of the category was shaped early on. Growing up in Scotland, one of the few markets where a local soft drink outsells Coca-Cola, he understood the cultural importance of soft drinks and their potential scale.

When he began looking seriously at building a business, he saw an opportunity others had missed. At the time, many food and drink categories had undergone premiumisation, but soft drinks lagged behind.

“It didn’t really seem like it had been premiumised yet,” he explains. “Lots of other categories had been improved massively, but soft drinks were still languishing in fairly low quality territory.”

Early media coverage helped validate that thinking. Dalston began appearing alongside more established premium brands, despite being much smaller. With fewer challenger brands in the space at the time, there was room to stand out.

The move to Dalston’s Soda reflected more than a name change. It marked a strategic shift shaped by external forces such as the sugar tax, as well as changing consumer expectations.

Some early products did not translate to wider appeal. Alternative cola, for example, struggled to compete with global brands.
“I think people want Coca-Cola or they want Pepsi,” O’Brien says. Rather than forcing the issue, the business focused on what was working and simplified the range.

Health became central to Dalston’s long-term direction. O’Brien saw it as the most relevant trend for soft drinks, a category he felt was in real need of improvement. Over time, the brand steadily reduced calories across its range, removed added sugar and continuously reformulated to make drinks less unhealthy.

Regulation accelerated that shift. The sugar tax disrupted the industry but also drove innovation, while later HFSS regulations further shaped how drinks could be marketed and sold.

Balancing health and flavour has been one of Dalston’s biggest challenges. O’Brien is open about the fact that some early reformulations went too far.

“We’ve definitely gone too far in the past,” he admits. “We realised we can’t cut calories below a certain level. We have to focus on taste.”

The principle now is clear. “Dalston has always been about striking that balance between taste and health…but taste has to come first.”

That balance has become easier as consumer palates have evolved. O’Brien believes people are now more open to less sweet flavours, influenced by trends in coffee, craft beer and more complex taste profiles. At the same time, advances in flavour technology and sweeteners have made the soft drinks category far more innovative than it once was.

Design has played a crucial role in Dalston’s growth. An early redesign by B&B Studio helped establish a confident visual identity and improved visibility on shelf.

O’Brien sees design as essential for challenger brands competing against much larger players. “Their commercial power commands attention,” he says of big FMCG companies. “Small brands have to make their presentations look fantastic because we don’t have that same weight of statistics behind us.”

Dalston invested early in having an in-house designer, embedding design thinking across packaging, presentations and communications. A lesson O’Brien took from the founder of Innocent has stayed with him: what is in the packaging matters most, followed by what is on it, then what surrounds the product on shelf.

1. Master Your Category

“If you don’t know what to do, pick a growth area and get involved in it,” O’Brien advises. Understanding how a category works, where growth is coming from and how buyers think can provide momentum that is difficult to manufacture.

2. Don’t Hold on to Manufacturing for Too Long

O’Brien cautions founders against holding on to manufacturing longer than necessary. While it can make sense early on, it can become a distraction as a business scales.

3. Keep Questioning Your Brand

Brand is never finished. O’Brien continues to question whether Dalston’s name will translate internationally, whether the design still reflects the liquid and whether health cues are clear enough. That willingness to revisit fundamentals remains critical.

4. Plan Your Funding Journey

“The businesses I’ve seen succeed raise a small amount of money, then a larger amount, and then an absolute ton of money,” he says. Each round should enable a meaningful step change in the business rather than simply sustaining momentum.

Dalston’s journey from nightclub experiment to national brand highlights the realities of building a premium soft drinks business in a rapidly changing category. It is a story shaped by regulation, shifting consumer tastes and constant iteration, with one challenge running through it all: making drinks that are better for you, without compromising on taste.

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