Tonic and mixer brands on tackling the US

The rise in popularity of gin has led to a revolution in mixers, with flavoured variants coming to the fore. But can tonic producers convert their esteem in the UK and Europe to success in the US?

*This feature was originally published in the November 2019 issue of The Spirits Business

Hard as it is to believe, there was once a mere handful of gin brands out there, with effectively just Schweppes and Britvic tonic water to mix them with. Then came the much vaunted ‘ginaissance’ and the explosion of craft brands, creating a whole new market for premium mixers, pioneered by Fever‐Tree in 2005. This ultimate challenger brand seized pole position in UK retail in late 2017, eventually provoking a reaction from the sleeping giant of Schweppes, which launched its upmarket 1783 range the following spring. By that point, according to market research company IRI, Fever‐Tree had a 39% market share of mixers in the UK off‐trade by value, compared with 31% for Schweppes.

“People have been educated to demand choice, and that’s what the gin market has been able to offer,” says Jo Verdult, chief operating officer at Double Dutch Drinks. In her view, the plethora of new gins, be they London Dry or some exotic new flavour, has spawned a corresponding demand for new mixers. Double Dutch’s nine‐strong range includes Cucumber & Watermelon, and Skinny Tonic Water, but it is not just flavour, quality or calories that matter, especially in the on‐trade. “People’s desire to Instagram their night to share where they’re at and the experiences they’re having has translated into a different way of behaving,” Verdult says. “People are asking – is it Instagrammable? Does it look good?”

The boom in flavoured gins has given birth to the new category of flavoured tonics, “which has grown exponentially”, says Leanne Ware, white spirits director at Halewood Wines & Spirits whose brands include Whitley Neill gin and Lamb & Watt mixers. This combination is unusual when you think of Diageo, William Grant or Bacardi, none of which have a proprietary tonic to serve with Tanqueray, Hendrick’s or Bombay Sapphire. Maybe the big guys are missing a trick because, as Ware says, having both “helps us to offer a complete solution”.

Yet with brands like Lamb & Watt now offering basil, cucumber, elderflower and hibiscus tonics, and as botanicals in gin grow evermore exotic, you can’t help wondering if we’re heading for a very aromatic, full‐ flavoured car crash in a glass. “No, at the end of the day a mix of flavours is just a cocktail,” assures Ware. “It’s no different from making a Collins and people putting in loads of different flavoured syrups or bitters.”

Verdult adds: “I don’t think people are losing their minds and having a flavour overdose. I think they’ve learned from the way vodka went a bit nuts.” She believes the industry is aware that mixing should be fun and relatively easy. “If you’ve created a cocktail that is only possible at ‐5˚C on a Friday night with 35 electrodes attached to your frontal lobe, it’s really not going to stick around for five years,” she says, and few would argue with that.

Far more important to justify a premium price is having natural ingredients and a good backstory. “People are paying more interest to provenance and what actually goes into their drinks,” says Emma Cotton, marketing director at Luscombe Drinks in Devon, UK. “If they’re investing a lot in a craft spirit, twice the price of a mainstream brand, they’re looking for a decent flavour profile in the mixer.”

Speaking of Luscombe’s tonic water range, which launched in 2016, she says: “Quinine can be quite bitter, so we add yuzu to soften it. And it’s also about matching the right level of carbonisation. An over‐carbonated tonic can accentuate the bitterness.”

QUININE LEVELS

In a similar vein, Fentimans’ marketing director, Andrew Jackson, says: “When consumers aren’t keen on a G&T, it’s not the gin, it’s the quinine. When you offer them a flavoured tonic with a lower level of quinine, the acceptance goes up. Give them a gin with a mixer like Fentiman’s Elderflower or Lemonade, and suddenly it’s the best drink ever.” Another benefit he reckons canny consumers have spotted from using flavoured tonics and mixers is: “You can make a good, standard spirit taste even better, as opposed to spending £40 on a flavoured gin.”

Rosie Crossman, brand manager at Franklin & Sons, has noticed a rise in gin and lemonade. “It’s slightly sweeter and fruity, and doesn’t have quinine,” she says. “There are also barrel‐aged gins mixed with ginger beer or ginger ale, though that’s quite niche.” Franklin believes in the importance of innovation to match the surge in the pink gin category, and lists eight tonics, including four dual flavours such as Rhubarb with Hibiscus.

In October, the brand launched three ‘infused sodas’ as grown‐up soft drinks containing just 5g of sugar. And with the success of de‐alcoholised spirits like Seedlip, all mixer brands are hoping to surf the current interest in ‘no‐and‐low’ drinks.

Official data may categorise mixers as soft drinks, but it’s not where Fever‐Tree sees itself. “We don’t consider ourselves ‘soft’ at all,” says Craig Harper, the firm’s UK on‐trade sales manager. “Some people may drink our ginger beer on its own, but that’s not who we’re innovating for. Everything is focused on spirits, and we’re always thinking of how our drinks mix with them.”

SPEED OF SERVICE

Leading bartenders have played a key role in promoting premium tonics, while the mainstream UK on‐trade stopped serving tonic from a gun years ago, claims Harper. “But I know in America, where speed of service is massive, it was the gun we were competing with when we first went there,” he says. But even out of the bottle “the quality of tonic was terrible”, he remembers about his first US trip. Certainly, the G&T has never wowed Americans quite like the Spanish or Brits, though some say that’s more because of the bitter, piney taste of juniper in gin.

Of course, every UK mixer producer dreams of conquering the States. “People there who are pushing the boundaries are looking for the next new thing and that thing coming from Europe is called gin,” says Andrew Jackson. “However, the scale opportunity in the US is certainly around Bourbon.” Compared with gin and vodka, which dominate the mixer market, dark spirits is a much smaller category, but is growing fast.

Fentimans has been promoting the Smoky Cokey cocktail that mixes whisky with its Cherry Cola. “It’s got the big industry players talking,” says Jackson, “though whether we can make it into a mass market proposition is a different matter.” Meanwhile, Fever‐Tree has “done quite a lot with Spiced Orange,” says Harper. “Jim Beveridge [Johnnie Walker master blender] called it ‘extraordinary’ – that was probably my happiest day this year.”

“Scotch whisky suffered from the ‘thou shall not’ movement,” Harper continues, referring to that band of diehard traditionalists, some of whom still insist that whisky should be enjoyed neat, or “with water, if you must”. Interestingly the incredible pre‐millennial Scotch boom in Spain, which became the spirit’s biggest market for a few years around 2000, was largely fuelled by Coke. An estimated two‐thirds was drunk that way as a tartan Cuba Libre – a serve that was initially promoted by Coca Cola’s Spanish sales team rather than any Scotch whisky company.

Hopes that Scotch can gain acceptance as a fully‐fledged, mixable spirit currently lie with the Highball, which has played a massive role in the growth of whisky in Japan. To some, ‘Scotch and soda’ sounds like some dusty concoction from a bygone era, but call it ‘a Johnnie Walker Highball’ and it suddenly sounds much more hip and on‐trend.

That said, the dark spirit on the lips of most mixer producers is actually rum, particularly spiced rum. Halewood’s Ware says: “Because consumers are already experimenting a bit more with the flavours in rum, I think they’ll experiment with flavoured mixers as well.” It’s a view shared by Fentimans, which launched its Tropical Soda this year. “It’s got a sweet pineapple flavour, balanced with subtle notes of cardamom,” says Jackson. If the overall rum category does finally move upmarket like whisky and gin, there will be a vast array of premium mixers waiting to join the party. Among them will be Coca‐Cola’s new Signature Mixers range, which includes Smoky Notes and Woody Notes.

The fact that millennial consumers are looking to lower their alcohol intake may come to haunt full‐strength spirits, but for anyone producing mixers it’s just another opportunity. As well as the emerging market for premium adult soft drinks that are drier in taste and not buzzing with artificial additives, there is another resurgent market to supply, as Jackson explains: “One trend we’re seeing is people wanting longer spritz drinks using tonics and flavoured tonics combined with wine or vermouth to get refreshment, flavour and a lower ABV.”

In the world of mixers, tonic water, with all its myriad new flavours, looks set to remain the driving force, be it with Tequila, Campari, white Port or the ever‐multiplying profusion of gin.