Business tonic: How challenger brand Fever-Tree took on Schweppes

Charles Rolls, founder of premium mixer brand Fever-Tree reveals how a chance encounter turned his and Tim Warrillow’s business vision into reality

Told they were crazy for taking on the global might of tonic brand Schweppes, Charles Rolls and his Fever-Tree co-founder Tim Warrillow weren’t perturbed. And now the company sells more than 60 million bottles of its premium mixers in 50 markets. 

Here Rolls tells how serendipity, ambition, boots-on-the-ground research and strategic market targeting led to Fever-Tree becoming a serious rival to the 230-year-old tonic brand Schweppes in under a decade…

We weren’t afraid of going overseas. It was in Fever-Tree’s business plan from the beginning.

So when Tim and I chose to pioneer a range of premium mixers, we focused on the top three premium gin markets: the UK, America and Spain. We felt each had enormous potential. The only issue was getting other people to agree.

Most people said: “You’re going up against a big international player, Schweppes.” Correct. “And going to charge twice the price?” Right again. “You must be crazy.” People generally look for quick commercial wins.

But we were convinced our product, sourced from the ends of the earth using the finest natural ingredients, would have a big market. As our proposition says: if three quarters of your gin and tonic is tonic, make sure you’re using the best.

In the UK, some early publicity brought Fever-Tree to the attention of a perceptive buyer at Waitrose. Within a fortnight of our tonic water going on sale, she said: “You’ve got a winner here.”

When serendipity opens a door

But getting traction elsewhere was harder. In Spain we just couldn’t find importers, wholesalers or journalists to back us.

And then something happened. Something so ridiculous that, had it come from the pages of a novel, no one would have believed it.

The late artist Richard Hamilton loved G&T and spotted our tonic water in Waitrose. He enjoyed it so much he sent a bottle out to his friend Ferran Adria, owner of the world famous El Bulli restaurant who he knew also shared a passion for ‘gin tonic’.

One day we got a call from El Bulli’s sommelier, saying Ferran wanted a shipment of bottles.

“We’d love to send some,” I said. “But we can’t find an importer.”

“We want this so much that we’ll help you,” he replied.

With the endorsement of the world’s number one restaurant, we suddenly found a tremendous importer and our Spanish sales rocketed. Ferran even added a Fever-Tree inspired sorbet to El Bulli’s menu. When we got an invite to his restaurant and tasted ‘sopa de tonica Fever-Tree’, it was one of the most sublime moments of my life.

Data is dated; get out to export markets

Today Fever-Tree is in seven of the world’s top 10 restaurants and around 75% of sales are overseas.

Some markets are still difficult to enter. Stringent regulations in Thailand have slowed down our progress and Argentina’s virtually impossible since the government doesn’t provide dollars to buy foreign goods.

We’ve had importers in distant locations underestimating the volumes required, so we’ve had a mad scramble to air freight supplies – not the most cost effective way of moving tonic water around the world.

We’ve also realised it’s a mistake to rely solely on third party agencies or desk research. Export stats are usually 18 months out of date. So in South America, you might think there’s no premium gin market. Wrong. There’s a huge demand.

In business, things move faster than ever. You can’t just bury your head in old spreadsheets. Do research, get out to the markets and start talking to people. You’ll often find a way in – and a lot more besides.

Nor does size matter. Our arrival on the scene has put Schweppes in a tricky position. For years it’s been telling everyone its tonic water is the best, but our customers beg to differ. Nevertheless creating a ‘premium’ Schweppes to compete with us would undermine its original product.

Once people taste Fever-Tree they never go back. It’s that ‘I’m worth it moment’. You’ve had a long day at the office, you come home and want something that makes you feel good.

And if you’ve already made the commitment to buy a premium gin or vodka, why mix it with anything but the finest tonic? It makes no sense at all – and that logic is universal.

Extracted from ‘Going Global: 30 Years 30 Insights’ by Piper, the leading specialist investor in consumer brands. For more information or to order a copy, please go to piper.co.uk

About Charles Rolls

An engineering graduate, Charles Rolls worked in mining and construction before joining Bain, the management consultancy. In the late 1990s, he invested in Plymouth Gin and, as managing director, helped revive the ailing company, selling it to Absolut Vodka in 2001. In 2005, Rolls and former advertising agency executive Tim Warrillow launched Fever-Tree, which now sells more than 60 million bottles in almost 50 markets worldwide. Rolls and Warrillow sold a stake in the business in 2013 but remain chief executive and managing director respectively.

Comments

(will not be published)