How the brand that almost held the monopoly of drink mixers failed to see the rise of a dangerous competitor.
Schweppes and Fever Tree are both brands that produce and sell similar products (drink mixers) such as lemonade, tonic water and ginger ale. Schweppes was founded in 1783 by Jacob Schweppe as he perfected the process of carbonation and made artificial mineral waters; on the other hand, Fever Tree is a much newer brand founded in 2005 by Charles Rolls and Tim Warrillow as they explored various countries such as Congo, Tanzania and Sicily in search of ingredients to make the ‘best-tasting’ beverages.
Despite Schweppes being around much longer than Fever Tree, statistics show that Fever Tree had a very successful year in 2018 with revenue growing 52% within the UK. Previous figures showed that towards the end of December 2018, Fever Tree was the number one mixer brand as it overtook Schweppes with a market share of 39%, compared to Schweppes’ share of 31%, highlighting the dominance of the brand. So, what is the reason behind Fever Tree’s dominance over well-established Schweppes?
A fundamental factor as to why Schweppes is no longer the leading drink mixer brand is due to the failure in recognising the change towards premiumisation of mixers. This meant that the brand ignored consumer trends and dismissed competitors that found a niche within the market. Prior to Fever-Tree, mixers were of poor quality and made with cheap, artificial ingredients. However, Fever-Tree aimed to created mixers with enhanced taste while appealing to the mass market by not being overpriced. The premiumisation of the mixers was achieved by sourcing high-quality ingredients as Fever-Tree recognised the shift in consumer interest away from mass markets and heading towards products known for their quality. In order to capitalise on this market trend, on top of sourcing the finest ingredients to create a premium product, Fever-Tree implemented various marketing strategies to help establish the new, premium and modern brand.
Fever-Tree’s successful marketing strategy includes selling on-trade and off-trade in order to appeal to the mass market and not only those who can afford it. The brand targets dominant leaders in the restaurant and bar industry to gain support e.g. Waitrose and The Ritz. Fever-Tree work collaboratively alongside premium spirit companies to increase on-trade sales and allow bars to experiment with flavours but this is also beneficial for them off-trade; Fever-Tree get to promote their products and create consumer demand for premium products at off-trade retailers. Their mixers are readily available at off-trade stores such as Tesco and Carrefour for only 30p more than other brands such as Schweppes.
Another useful marketing technique was the use of Fever-Tree’s pop-up bars. In 2014, they launched a Gin & Tonic bar, providing 160 gins from international distilleries. Consumers could sample different gins and tonic waters to find their favourite combination. This clever method of advertising allowed Fever-Tree to entice consumers by giving them a taste of what to expect while also being honest as to how products are made.
Furthermore, Fever-Tree used strategic distribution to ensure products were not only sold within the UK but also internationally. The tonics are now sold in seven of the world’s top ten restaurants and reach an incredible number of consumers. Fever-Tree have four main areas of distribution: UK, Europe, USA and the rest of the world. This effective marketing strategy is a strong advantage as a clear allocation allows the company to closely monitor trends and results. The UK mainly distributes products in off-sale methods such as Waitrose and Tesco. Within the USA, products are sold on-trade and off-trade by a sales agent, therefore, all markets are covered and the product reaches different audiences. Fever-Tree continue to expand in multiple continents and have recently made an agreement within North America’s dominant distributor – Southern Glazer’s Wine and Spirits to exclusively distribute on-trade across 29 US states. Fever-Tree also work with Spanish gin connoisseurs who have been one of the largest consumers and invested £1m promoting the partnership between their gin and Fever-Tree.
On the other hand, Schweppes have found it difficult to implement a stable marketing plan. One reason for this is due to the lack of clarity of the brand’s ownership and poor brand management. In some markets within Europe Schweppes is owned by Coke, however, it is also its competitor within other European markets such as Nordic Mist in Spain. Schweppes lacks the marketing support that Fever-Tree strongly possess which makes it more difficult to grow within the tonic market.
However, in recent years, Schweppes re-launched with their biggest ever marketing campaign costing them £6.6m and included major changes to boost sales, regain position within the European market and reach new strategic targets. Some aspects of the campaign include TV and cinema advertising, a sponsorship of the Jonathan Ross show and a new digital campaign. Schweppes also partnered with a number of premium venues within the UK such as the Royal Albert Hall and the O2 Arena and similar to Fever-Tree, stand-up bars were put in these venues’ events to provide a premium mixing experience for consumers. Furthermore, to strengthen off-trade sales, different ranges of the tonics were made available at Rick Stein’s restaurants – allowing Schweppes to regain popularity and attract new consumers.
Schweppes’ inability to recognise new threats fueled by ambitious competitors has resulted in the decline of the brand. This serves as a lesson that no matter how established a brand is, it is imperative that they continue to adapt to the changes within the market, re-establish target audiences and enforce a well-planned strategy.
About The author
Fatma Al-Ameri is a second year Accounting and Finance student at Kingston University. Prior to this degree, she completed a-levels in Maths, Psychology and Film Studies. In her free time, Fatma enjoys watching football, playing the piano, and eating burgers. Currently, Fatma is completing a Consultancy in Practice module and in this role she has started blogging about branding and marketing.