Premium mixers were pioneered by startup brands like Fever-Tree, but Coca-Cola’s launch of Royal Bliss earlier this year shows big soft drink companies are fighting back. With Red Bull and Schweppes also joining in, premium mixers may be about to get a lot more competitive.
Perhaps the most lasting legacy of the gin resurgence isn’t the dizzying array of craft gin, but another product altogether: premium mixers. All that high-quality gin demands equally high-quality tonic to go along with it. But premium mixers have come a long way from topping up the humble Gin & Tonic – the category is projected to reach more than $1 billion in sales, and the competition is heating up.
When Fever-Tree launched its tonic water in 2005, the only real option for filling up a Gin & Tonic was Schweppes. Setting itself up as a premium alternative via promotions with gin brands and bars, the company created the blueprint for the products which were to follow, and kicked off a thirst for premium mixers. Fever-Tree went public just nine years later and saw its revenue skyrocket over £100 million in 2016. And Fever-Tree isn’t just selling to Brits. Across Western Europe, people are drinking about 100 million more litres of tonic water than they were just six years ago.
All those sales haven’t gone unnoticed by competitors like UK craft soft drink brand Fentimans, Greece’s Three Cents, and even Germany’s Thomas Henry. But none of the new products have posed a serious threat to Fever-Tree’s dominance until now.
Royal Bliss Starts the Fight for Premium Mixers
In February this year, with noticeably little fanfare outside the country, Coca-Cola launched a new product range exclusive to the Spanish market, called Royal Bliss. What’s particularly notable about Royal Bliss is that its market, for now, is bars and restaurants. According to the Royal Bliss website, and its painfully arty ad campaign, the range is about celebrating “breaking out of your comfort zone.” Packaged in sleek glass bottles, and with The Crew – 10 prominent Spanish bartenders – as brand ambassadors, it’s clear the comfort zone Royal Bliss wants you to leave behind is the shade of a Fever-Tree.
Even the launch strategy: targeting bars first and using them to create a sense of exclusivity amongst consumers, is straight out of the Fever-Tree playbook. Coca-Cola Spain reportedly spent two years developing the range, which features eight flavours, including the usual suspects like Soda Water, Bitter Lemon, Ginger Ale, and the obligatory Tonic Water. In fact, it’s an indication of the significance of tonic that Royal Bliss features three different varieties: a standard Tonic Water, Zero Sugar Tonic Water, and Exotic Yuzu Sensation Tonic Water.
Juan Valls, bartender and manager at El Niño Perdido in Valladolid, and now also Royal Bliss brand ambassador, says the Yuzu Tonic Water is selling particularly well. As for the range as a whole, he admits “it’s pretty early to know” how it’s doing. But he’s bullish about the product. “For me, Royal Bliss have a plus standard in the aroma and a clear difference between all the flavours,” he says. In many ways, Valls is the ideal Royal Bliss consumer – he used to use Fever-Tree before he made the switch.
Will the Bliss Spread Outside Spain?
Assuming the range finds success in Spain, there’s no word yet from Coca-Cola on whether Royal Bliss might be rolled out in other countries. Although, Coca-Cola’s current global CMO, Marcos de Quinto, appreciates the business opportunities of the bar industry more than most. Prior to his promotion in 2015, de Quinto led Coca-Cola’s operations across Spain and Portugal. While there, he oversaw the award-winning “Blessed Bars” campaign, in which the company partnered with and supported local bars during Spain’s financial crisis. The goodwill from that campaign was a stepping stone to the launch of Royal Bliss. Since taking on the global CMO role, de Quinto has already overhauled Coca-Cola’s international marketing strategy, so he’s clearly not afraid to make big changes.
Royal Bliss also sets itself apart by offering premium versions of two highly unusual mixers: Expressive Orange, and Bohemian Berry Sensation. Considering Coca-Cola’s willingness to take some risks with Royal Bliss, it’s surprising the range doesn’t include a premium cola. Presumably, Coca-Cola thinks its signature drink is premium enough, and didn’t want to further fragment its market.
The Race to Produce a Premium Cola
Still, Coca-Cola may be forced to rethink that position before long, as cola and other dark spirit mixers become the next frontier in premium mixers. The global market for gin is only a tenth the size of the market for all dark spirits, the majority of which are regularly mixed with cola, ginger ale, or ginger beer, so a popular upmarket cola could be very lucrative indeed. Part of Royal Bliss’s motivation for striking directly at Fever-Tree was surely the gradual rollout of Fever-Tree’s Madagascan Cola, first in Spain, then Australia, the UK, and as of this autumn, Germany.
Europe, and particularly the German-speaking area (GSA), is fast becoming the battleground for the premium mixer market. As Laura Lipke, Fever-Tree Country Manager for Germany put it, “Germany is one of our top markets in Europe having shown significant growth over the past years and will remain a growing key market in the future.”
Red Bull Races Onto the Scene
And Fever-Tree isn’t the only company keeping a close eye on the GSA countries. Energy drink giant Red Bull burst onto the premium mixer scene in its home market of Austria earlier this month. Organics by Red Bull is the mouthful of a name chosen for the company’s four-strong line-up of premium mixers, including Bitter Lemon, Ginger Ale, Tonic Water, and Simply Cola.
In a sense, Organics by Red Bull is entering the mixer market backwards – where other brands started with tonic and are only now experimenting with cola, Red Bull’s Simply Cola has been available in Europe since 2008. But that doesn’t mean Red Bull has been any less focussed on the hospitality market. The company apparently carried out extensive testing of the new Organics by Red Bull products with bars and restaurants in Austria.
Simply Cola has won some fans behind the bar, including Munich’s award-winning Klaus St. Rainer. The introduction of the full Organics by Red Bull range will no doubt help support those existing customers, although the range may have trouble expanding its fan base. Never one to play predictably, Red Bull is taking the bull by the horns, marketing its mixers to both consumer and hospitality customers simultaneously. Organics by Red Bull is also bucking the trend by selling its premium mixers in cans, rather than glass bottles.
Can a Can Ever Look Premium?
While Red Bull’s slimline cans are familiar and recognisable for consumers, they’re a nuisance for many bartenders, who feel the cans don’t fit in with a classy bar aesthetic. Bert Jachmann from Vienna’s Heuer am Karlsplatz, helped to test Organics by Red Bull and sums up the feeling: “one small drawback: the can. I’d rather have a bottle.” Otherwise, Jachmann is keen on the range, particularly the Ginger Ale.
As the name suggests, the Organics by Red Bull mixers are all certified organic products – another new step for premium mixers. There’s no release date yet outside Austria, but Red Bull’s strategy with previous product launches has been to use Austria as a springboard into Germany and Switzerland, before moving into the rest of Western Europe.
Schweppes Refreshes its Range
The final entrant into the premium mixer market in Germany is none other than Schweppes – the sleeping giant in Fever-Tree’s origin story. It’s fair to say the company is playing catch-up, but more than Coca-Cola or Red Bull, mixers are a vital part of Schweppes’s business, so it has powerful motivation to take the challenge seriously.
Launched earlier this year, the new range of Schweppes premium mixers is all about tonic, with a traditional Tonic Water sitting alongside flavoured versions like Pink Pepper, Lavender and Orange Blossom, and Ginger and Cardamom. Schweppes already has the market reach and brand recognition to sell the product, but Schweppes may struggle to convince bartenders it has changed anything more than its packaging.
The Future of Premium Mixers
You would think three of the world’s major soft drink producers turning their attention to premium mixers would cause concern for Fever-Tree. If Lipke is worried, she doesn’t show it. In fact, she welcomes the new products, because they’re “driving category growth.” More than that, she says, “new market entrants create a lot of interest among a broader target audience.”
For now, Fever-Tree has every right to be confident – its name is synonymous with premium mixers. But the recent launches from big players mark the beginning of a new chapter in premium mixers. The incredible growth of the past few years won’t last forever, and when it slows down, the competition for a permanent place behind the bar will be fierce.
Bildquelle: Photo via Royal Bliss.