Business ideas for 2018: Premium mixers

Though you might have convinced yourself differently at the staff Christmas party, the truth is, the days of knocking back vodka shots and tequila slammers are over.

Alcohol is getting sophisticated – and fast.

With the likes of gin, mezcal and vodka all experiencing a resurgence in recent years, (albeit with some reinvention for more upmarket appeal), it was only a matter of time before the discerning UK public called out for a premium mixer to add to their tipple.

In fact, in 2017 UK tonic sales rose 35% from 2016 levels, with volume sales reaching 122,280 litres for November 2017 – a rise of 13% compared to the same period last year, and this trend shows no sign of stopping anytime soon.

Gregory Dillon, a consumer analyst at GlobalData, explains:

“There will be continued progress for premium tonics and their alcoholic counterparts as consumer interest in craft products continues to grow.”

A lesson for 2018: store brand fizzies stay away – high end tonics and sophisticated soft drinks are on the way.

Starting a premium mixer drinks business: Why it’s a good business idea

A £1.5bn industry in the UK alone, the soft drinks sector remains unabashed in spite of the recent sugar outcry – with more and more reduced sugar options and natural flavours entering the market.

While giant corporates are being forced to alter their entire operations in order to adhere to new legislation, and in the process potentially diminishing their offering, a start-up’s ability to be more flexible and agile in terms of overhaul and innovation leads to plenty of opportunities.

With the new sugar tax coming into effect in April 2018, Coca-Cola has already announced it will decrease the size of its 1.75-litre bottles to 1.5-litres, while simultaneously raising the price by 20p from £1.79 to £1.99.

Scottish favourite Irn Bru has had to change its entire recipe in order to cut its sugar content by almost half – a decision that has led fans to stockpile the drink out of fears they won’t like it and even launch an online petition in protest at the decision.

With corporate and consumer hands being forced towards healthier alternatives, it’s no surprise many drinkers are favouring a more premium offering when looking to mix their drinks or even just to enjoy a premium mixer on its own.

A sure sign of this millennial thirst for upmarket mixers and healthy options, London drinks brand Fever-Tree Drinks doubled its profits in the first half of last year – helped no end by the rising global popularity of mother’s ruin.

Last year, gin sales in the UK’s on-and off-trade surpassed £1bn for the first time, up 26% on last year, while whisky sales also grew by 10%.

Even Schweppes, the world-famous mixer brand that dates back to the 18th century, spent £6.6m on its UK marketing campaign for Schweppes’ 1783 – its new premium range of tonics designed to attract punters who enjoy a drink at home.

No longer just knocking back anything that’s passed to them, research from Mintel shows that 37% of boozing Brits now want to know the origin of what they’re drinking – with 20% prepared to pay more for the privilege.

2018 offers a chance for entrepreneurs to launch an innovative, premium soft drink that ticks all the right boxes.

Premium mixer business opportunities

With 25% of the UK’s population now enjoying cocktails regularly, the most obvious way to capitalise on this growing trend is to produce your own premium mixer that people can enjoy in a cocktail or as a drink in its own right.

Key to setting yourself aside from generic store brand mixers, as well as gaining the ‘healthy’ tag, will be to use real ingredients, natural flavours and to market yourself with an air of superiority.

Using glass bottles, vintage branding and applying a generous price point should help in this regard.

Founded by identical Dutch twins Joyce and Raissa de Haas, the gin enthusiasts were frustrated that, as the world’s choice of spirits has continued to grow, mixers and sodas remained bland.

“We felt alcohols like gin and vodka were becoming more varied and inventive, but tonics remained boring.

“Inspired from our days at university cooking our own mixers for family and friends and by our creative student days at UCL, where we came up with new ideas for mixers, we decided to begin experimenting.”

Available in 200ml and 500ml bottles, as well as in four packs, their range of upmarket tonics include flavours such as cucumber and watermelon, pomegranate and basil, and cranberry.

Selling to 20 countries worldwide, and growing at a rate of 10-15% each month, the start-up is expecting to sell five million bottles this year.

While most premium mixers will attempt to make some sort of health claim, why not step out even further from the crowd and align your business with a charity or environmental cause?

Not only will it help raise awareness and money for those in need, it should generate great PR for your brand and instill a sense of trust in consumers.

One business doing just this is Roots Beverage Co – which has just launched its first range of tonic waters into the UK market.

Sweetened only by natural honey, the three new tonics include a Worker Bee Indian tonic water, a slim line Queen Bee tonic water and a Rhu-Bee tonic water, which takes natural colour and flavourings from rhubarb.

Based in the Isle of Man, the business reinvests 10% of all profits into bee-related projects to ensure the bee population continues to thrive.

However, if you’re not too keen on making the stuff yourself, don’t give up on tasting success with soft drink just yet.

You could always start your own bar filled to the brim with a range of unique artisan spirits – accompanied by equally impressive mixers.

Or with so many new and exciting mixers bound to hit UK stores over the coming year, why not start your own premium mixer-based subscription service?

Indeed, with the copious amounts of potential ingredients for mixers – people are bound to begin experimenting with various concoctions themselves.

So, maybe a mixer-making class, or DIY premium mixer kit could have you toasting start-up success for 2018.

Insider opinion

Jamie Blair, founder of Roots Beverage Co, said:

“I was inspired to create my own premium mixers while I was working in a bar and making cocktails. People were always looking for something different.

“I wanted to make a truly premium product – but one that made a difference; to people’s health, to the future of bees and to our planet. The growth of so-called ‘premiumisation’ in the drinks industry is set to continue.

“People are becoming more discerning when it comes to taste, but also when it comes to their health.

“The premium mixers which will thrive will also provide a healthy soft drink alternative for the consumer and have enough flavour to enjoy on their own.

“The brands which can separate themselves from the other high sugar drink products currently on the market, as well as complementing a variety of spirits, will continue to grow.”

Ash Dougal, an angel investor, who backed Roots Beverage Co and other businesses with an ethical mission, said:

“At the end of last year, global tonic water sales topped £1bn for the first time and the UK has seen a 37% rise in the previous 12 months.

“This was largely down to the exponential rise in the popularity of gin in recent years.

“With some of the big players only just launching premium ranges and demand showing no signs of slowing, there’s still room for growth at this end of the market.”

Published Jan 2018