Ready to Run: Craft Mixer Brands Race Toward Mainstream

For Alex Abbott Boyd, Walmart was the inevitable next step.

The founder and CEO of premium mixer brand Cocktail Crate, Boyd is cognizant of the retailer’s clout in the mixer space; according to industry estimates, Walmart accounts for over 30 percent of category sales. Although his brand, which markets innovative flavors like Sriracha Margarita and Maple Whiskey Sour, performs well at specialty and natural retailers, Boyd believes that the biggest opportunity for growth will be in conventional and mass chains.

Still, to get into the chains, you’ve got to think like the chains. And that can mean a different approach.

“When we went to Walmart, it was the easiest meeting I ever had in my life,” Boyd said. “[The buyer] said ‘I’ve already tried your product – I love it. The only problem is that I can’t sell it for $9.99.’ I said, ‘Well, I’ve got this new line for you at $5.99.’ And she said, ‘Deal’s done.’”

So for Walmart at least, gone was the spicy Sriracha, and in came the ginger. Cocktail Crate’s new “classic” line of whiskey cocktail mixers will debut at 620 Walmart locations this March. The products, which come in three varieties – Old Fashioned, Whiskey Sour and Ginger Mule – will be priced at $5.99 per 375 mL flask bottle, approximately $3-4 less expensive than the brand’s original products.

Along with a palatable price point, the products are designed for a one-to-one blending ratio, a key for consumers seeking a simple blending process between spirit and mixer. That ease of preparation is critical to reaching everyday consumers, said Mark Mahoney, the co-founder and CEO of Powell & Mahoney, another mixer brand.

“Five years ago, the average high-use complex cocktail had four to five ingredients,” said Mahoney. “You become a chemist at home to do that. In our research and the data that we were combing through showed that there are a bunch of people, especially millennials, that want to drink dark spirits. They want an Old Fashioned. They want to understand what the classic cocktails are, but they don’t want to spend a lot of time having to become an expert bartender to do that.”

Last year Powell & Mahoney introduced a brand refresh that amplifies messaging about the mixers’ ease of use and positions them as “a one-and-done solution.” The refresh came on the heels of a national distribution deal with Walmart, which picked up two Powell & Mahoney SKUs for 1,800 of its stores. The relationship will undergo a reset in March: Walmart will carry four to six Powell & Mahoney products in 600-1,000 of its locations, where brand performance has excelled. Despite a decreased store count, Mahoney anticipates a 2-2.5 percent increase in sales.

“They’re just a behemoth for moving cocktail mixers,” Mahoney said.

Sales data helps to shape this perspective: Citing figures from SPINS, a market research firm focused on natural, organic and specialty products, Boyd stated that the mixer category accounts for just $1 million in sales within the natural channel, $7 million at specialty retailers, and $267 million in MULO-tracked stores.

“Given just how narrow my potential market is in natural and specialty, I’m not going to have a business if I don’t go after Walmart,” Boyd said.

The sentiment is shared by many entrepreneurial brand owners in the premium mixer space, which have also benefited from surging consumer demand for small-batch spirits and a thriving craft cocktail scene. Anchored by breakout brands like Q Drinks and Powell & Mahoney, the set continues to gain traction at mainstream retailers, particularly Target and Walmart, which are now emphasizing a premium product mix.

In turn, companies like Cocktail Crate and others are trying appeal to more consumers with new positioning, line extensions, lower prices and simpler formulations.

Less Whimsical, More Effortless

So that means that Owl’s Brew, a tea-based cocktail mixer brand that launched largely in natural and specialty retail channels, is attempting to broaden awareness and appeal of its products by reducing its emphasis on esoteric flavor names and magnifying visibility of common ingredients.

“One takeaway after four years [in business] is that if people don’t understand it, you lose them,” said Jennie Ripps, the co-founder and CEO of Owl’s Brew. “There are less people looking for discovery and more people that are looking to make a great cocktail. Because we were so ‘crafty’ to start, we didn’t do a good job explaining what the ingredients were. People couldn’t imagine the flavor profiles.”

Targeting conventional consumers, Owl’s Brew, which also markets a line of beer and tea blends, recently unveiled a label refresh for its mixers that swaps out the tagline “a tea crafted for cocktails” with “a craft cocktail mixer brewed from tea and botanicals.” The new look also highlights familiar ingredients on the front label and calls out specific spirits for blending. The hope, Ripps said, is to making the ultimate end cocktail more relatable to conventional retail consumers.

“Using cues that relate more to traditional cocktails or cocktails people are more familiar with… while it takes away from the whimsicality of the brand, from a pragmatic standpoint it will allow somebody to more quickly understand what they can do with it,” Ripps said.

Boyd concurred. While he praised the growing mix of speciality cocktail mixers and ingredients coming to market, he views the expanding set of syrups, shrubs, bitters and botanicals as attractive to only a small segment of consumers within the burgeoning cocktail scene. The majority of drinkers, he said, are seeking an “effortless” experience.

“I find that most of my customers, they don’t have a jigger; they can’t really measure things out,” Boyd said. “But everyone can at least figure out how to put two shots of the same sized liquid into a shaker, into a glass. It’s both part of what makes the cocktail taste great and is all about the effortlessness.”

Finding a Balance

Nevertheless, it’s not all Walmart; natural and specialty sales are growing, and they continue to supply steps toward bigger channels. Although he’s set his sights on a bigger presence at mainstream retail, Boyd himself acknowledges that mixer sales in the natural and specialty channels continue to grow.

Similarly, Jordan Silbert, the founder and CEO of Q Drinks, views conventional grocery stores as the bigger opportunity for his brand, but believes there is ample potential to expand his business at smaller retail chains and independent stores.

“Our ACVs in natural and speciality are ridiculously low given our performance,” Silbert said. “It’s not going to turn us into a $3 billion company like Fever Tree, but [as] we get our new packaging out on the market, engage our brokers, and execute really well on the sales side, we believe there’s millions and millions of dollars in there for us.”

Felicia Vieira, the president of Crafted Brand Company, the maker of the Crafted Cocktails line of mixers and shrubs, is also pursuing growth in natural as part of a multi-channel strategy that includes mass and conventional grocery chains. The company works with retail partners, including Walmart, Cost Plus World Market and Bed Bath & Beyond, to identify ingredients and flavors that can appeal to a variety of consumers.

“It’s a matter of what flavors are appealing to the market,” Vieira said. “We do extensive research on what are the hot cocktails, what’s mainstream, what can cross over into several different marketplaces.”

Viera noted that buyers across the retail spectrum understand they need for a premium mixer set and that “there’s no discussion about why they need” it. It’s a significant turnaround for the category, a change Silbert said has been years in the making and fueled by consumers increasingly drawn to premium spirits.

“Ten years ago, [large retailers] wouldn’t even talk to me,” Silbert said. “And now, just about every leading conventional grocery store in the country has either us and/or Fever Tree. Their customers want better mixers because they’re drinking better spirits. And there’s more dollars available if you actually sell a better mixer as compared to a lower priced one.”