Move over, flavored seltzer: The cola wars are back as young consumers reach for pretty cans of soda in oddball flavors, Jennifer reports.

Why it matters: Startups are trying to disrupt the "big three" soda makers, which dominate the $110 billion market for soft drinks purchased in supermarkets and convenience stores.

Driving the news: There's been an explosion of new soda flavors and brands that seek to cater to Gen Z and Gen Alpha, who crave culinary novelty and intense flavors.

• Some of the newer sodas — like Olipop, Poppi, Culture Pop, Vina, and Mayawell — make "functional" claims, usually related to gut health.
• Others — like United Sodas of America and Zevia — describe themselves as "premium" and "better-for-you" because of their natural ingredients.
• That cool packaging? Consumers want products they can pose with on Instagram and TikTok.

Meanwhile, the "big three" are punching back with new flavors, amping up the competition.

• Coca-Cola introduced in March its first new permanent flavor in years, Spiced.
• PepsiCo rolled out two limited-time flavors, Pepsi Peach and Pepsi Lime.
• Keurig Dr Pepper unveiled Dr Pepper Creamy Coconut, available from May to July.

Where it stands: Lots of people ditched soft drinks for La Croix, White Claw, and other flavored seltzers (spiked and otherwise) — but now they're migrating back.

• Why? "Taste, taste, and taste," says Daniel Herndon, president of United Sodas of America, a four-year-old Brooklyn-based company.
• "There's folks that left soda completely because of sugar and went to those other options," Herndon tells Axios. "They want to come back to flavor, and they're starting to vote with their dollars."
• United Sodas — which sells an irresistible suitcase of flavors like Cherry Pop, Strawberry Basil, and Pear Elderflower — contains 6 grams of cane sugar per can and 30-35 calories.

What they're saying: Ben Goodwin, CEO and co-founder of Olipop, says the "new wave" of sodas is "meant to reflect the full-flavor experience you get from drinking a traditional soda."

• Olipop, introduced in 2018, says it created the "functional soda" category.
• "We only have one health claim: It's good for digestive health," with nine grams of fiber per can, Goodwin tells Axios. "It turns out that fiber is a critically underserved nutrient."
• The company also points to its trademarked "functional formula," OLISmart, which includes seven "unique botanicals, plant fibers, and prebiotics," like Jerusalem artichoke and kudzu root.
• The company partnered with Purdue University to generate scientific data to support its claim.
• Each can of Olipop has 35-50 calories. Flavors include Ginger Lemon, Tropical Punch, and Classic Root Beer.

Yes, but: Much scientific shade has been thrown on the health claims of some of these beverages.

• "Not to be confused with probiotics, which contain live microorganisms, these prebiotic beverages are infused with special plant fibers that feed the trillions of microorganisms that live in your gut," per the Washington Post.
• Marion Nestle, an emeritus professor of nutrition at New York University and author of "Soda Politics," tells the Post: "If they're marketing them as having a major prebiotic effect, that's an exaggeration. The evidence behind it? Not so strong."

🥤 Jennifer's thought (taste?) bubble: If you're a Diet Coke addict like me, the soda alternatives aren't likely to convert you with flavor alone — nor with their low-calorie counts, which can add up if you drink as much as I do.

• They're also more expensive than mainstream sodas.
• But my Gen Z son and his friends — who used to call themselves the La Croix Boys, because they drank so much — adore them.

The bottom line: If you're looking for something really bizarre, a company called RocketFizz sells sodas in flavors like pickle, bacon, and pumpkin pie.

Share this story.

Tesla's revenue and profit tumbled in the first quarter, but it's promising to speed development of new vehicles, Axios Closer's Nathan Bomey reports.

Why it matters: Tesla is grappling with slumping sales, increased competition, and questions over its spending priorities.

Driving the news: The electric automaker reported revenue of $21.3 billion and net income of $1.13 billion in the first quarter, down 9% and 55% from the same period last year, respectively.

• That's short of S&P Capital IQ's estimates of $22.26 billion in revenue and $1.48 billion in net income.

Friction point: In an earnings presentation yesterday, Tesla acknowledged "numerous challenges," including logistical hurdles in producing and delivering the recently refreshed Model 3 sedan.

Between the lines: After a recent report that the company had canceled development of an affordable vehicle dubbed the Model 2 — which CEO Elon Musk denied — Tesla said it's moving faster on new vehicles.

• "We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025," the company said.

The company also said it's not pulling back on its investment priorities, including AI and self-driving vehicles, which Musk believes will usher in a lucrative future.

• In the short term, however, the company's partially self-driving technology is being discounted.

Share this story.

A top economics researcher is making the case that generative AI could be good for workers — assuming businesses rethink how they're using it, Axios Macro's Courtenay Brown reports.

Why it matters: If this outlook is correct, the economy could see the upsides of AI's rapid economic changes while avoiding pitfalls for individual workers.

What they're saying: "The right way to think about generative AI is to view it as a flexible tool that's usable by human workers," MIT professor Daron Acemoglu said at a recent IMF event.

• "If we can do that — not just for managers and the top-level workers, but for electricians, plumbers, nurses, educators — I think there is a chance of turning this into a 'pro-worker' phenomenon."

"We need to think of digital tools as useful things for humans — not our overlords, but our helpers," Acemoglu added.

Keep reading.

Next-gen aviation startup Beta Technologies' ALIA eVTOL (electric vertical takeoff and landing) aircraft recently completed its first crewed transition from vertical to horizontal flight, Alex reports.

• ALIA took off like a helicopter, switched to flying on its wings like an airplane, then landed like a chopper. (See the full video here; go to 3:30 for the big moment.)

Why it matters: It's a key milestone for the Vermont-based company, plus a chance to gather important data as it seeks FAA certification for its aircraft.

Context: VTOL aircraft aren't new — the most famous version, the V-22 Osprey, has been flying since 1989.

• But today's models are sleek, modern aircraft, with updated technology, materials, and electric propulsion.

What's next: Beta and rivals like Joby Aviation are exploring military and cargo uses while working to ready their aircraft for passenger flights.