Fever-Tree Mixers - A Masterclass in How to Add Value

Fever Tree mixers are basically a combination of water sugar and flavourings – just like Schweppes or any mixer sold under a retailer’s own brand.
Yet newcomer Fever - Tree retails at over three times the price of old established Schweppes, and as much as seven  times the price of retailer brands.

“Hmm, must be a tiny brand” will be most peoples’ reaction. Not true. Whilst Fever Tree is undoubtedly a niche product , it is a sizeable niche . Turnover in 2012 was £16.4 million, up from £12 million the year before, and this year turnover is predicted to top £25 million.

It is a profitable niche, reporting underlying earnings in 2012 of £5 million before tax, depreciation and amortisation. And it has international appeal with 70% of its sales coming from abroad, mainly Spain and the US.

Charles Rolls and Tim Warrillow who founded the brand attribute its success to outstanding product quality. Fever Tree products contain only fresh ingredients and natural flavourings which are claimed to be unique. Its products are made from cane sugar, and none contain artificial sweeteners like aspartame or saccharin.

The mixers do indeed taste good. But I would suggest that the packaging plays a big part in the brand’s appeal. The bottles are glass, not plastic. The simply designed, shiny labels look classy, as does the outer sleeve. Displayed on supermarket shelves they make everything else look cheap.

And then there is the story behind the brand. It seems that the co founders travelled to the four corners of the earth to source their ingredients. So the quinine comes from a plantation in the Congo that produces the purest form of quinine in the world. Lemon and thyme for the tonic come from Provence, and the three gingers used come from Ivory Coast, Nigeria, and Cochin in India.

There may be psychology at play. After all, if you have shelled out over £26 for a bottle of fancy gin or £36 for vodka (the going rate for Tanqueray and Grey Goose) then you probably want to buy what you believe to be the best mixer available. As the Fever-Tree website says “If ¾ of your gin and tonic is tonic, make sure you use the best”.

It is difficult to break down what adds value. Usually it is a combination of factors, both rational, like product taste and ingredients, and emotional, like how much the story behind the brand appeals, and how buying the brand makes you feel about yourself.

Fever - Tree manages to combine a myriad of factors and turn them into a considerable success.