- Coca-Cola is interested in expanding its roster of premium cocktail mixers, according to Bloomberg. This is part of Chief Executive Officer James Quincey’s plan to make Coca-Cola a “total beverage company.”
- The beverage maker has already launched an upscale line of glass-bottle mixers in Spain called Royal Bliss, re-introduced Schweppes in the U.K. and created a new premium brand called Schweppes 1983.
- Coke also appears to be interested in acquiring popular start-ups, in addition to it’s own in-house launches. Brooklyn-based Q Drinks LLC, a premium mixer start-up, could be on Coca-Cola's radar, as it has a number of connections to the beverage maker.
James Quincey, Coca-Cola's CEO who took the helm in May, has spoken often of his desire to make the soda maker a “total beverage company.” With soda consumption falling to its lowest levels since 1985 as consumers move away from the beverage toward healthier teas, waters and other drinks, it’s a smart move for the company to diversify.
Coke has already invested in popular soda alternatives, such as bottled water and tea, and more adventurous drinks like kombucha and drinking vinegars. In October, Coca-Cola paid $220 million to purchase Mexico’s sparkling water brand Topo Chico, a premium beverage popular in Texas.
But for Coca-Cola, one perk of expanding its line of mixers is that it’s a product consumers of all legal age are familiar with. There’s no need to explain that tonic is often served with gin. Mixers also are an area of the beverage market that is experiencing more demand for premium products. Spirit sales grew 2.6% in 2016, more than double that of wine. As consumers spend more money on booze, they’re now investing in better quality mixers to match.
"More consumers, most notably adults, are seeking unique and distinct products with sophisticated flavors, quality ingredients, and smaller-scale craft production," Quincey told analysts during the company's most recent earnings call according to a Seeking Alpha transcript. "Mixers are seeing a resurgence in many parts of the world as part of this trend."
Coca-Cola has some expertise in mixers, with legacy brand Schweppes. The drink company has re-introduced Schweppes in the U.K., and created a new premium brand called Schweppes 1983 as part of its expansion into the mixers market, Quincey said. The trick now will be convincing companies to trust its new products and acquisitions as much as they trust the established brands. Considering Coca-Cola already has solid relationships with restaurants and bars for its soft drinks, the Atlanta company should have an advantage getting them to try the new mixers.
If Coca-Cola is shopping around for mixer upstarts, it’s doing so quietly. One option, Q Drinks, would be a prime acquisition target if the soda maker were looking to buy into this space. A Coke veteran is one of Q Drinks' executives, and the founder of Honest Tea, which was bought by Coke in 2011, is a board member, according to Bloomberg. The soda giant is certainly aware of the premium mixer company. With its goal of expanding its reach in the beverage market, Q Drinks and the mixer market could be a perfect target for Coca-Cola.