A method of producing a carbonated beverage comprising a blend of water and syrup having a predetermined final carbonation level. The method includes the steps of: introducing CO2 into a flowing stream of a product blend comprising water, syrup and dissolved oxygen, such that CO2 is dissolved in the product blend; deaerating the CO2-containing product blend by introducing the blend into a vented atmospheric vessel, the interior of which is at ambient pressure with a headspace maintained above the surface of the liquid within the vessel, whereby dissolved oxygen is released from the product blend and vented from the vessel; pumping the deaerated product blend from the vessel, wherein the deaerated blend includes dissolved CO2 at an intermediate carbonation level less than the final carbonation level; and carbonating the deaerated product blend to the final carbonation level downstream of the vented vessel to produce a carbonated beverage for subsequent packaging. A system for performing the method is also provided, as well as a method of producing a beverage using nitrogen deaeration.