SKU’d Thoughts
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SKU’d Thoughts

SKU’d Thoughts 50: Is it time to shake up the cocktail mixer category?

Photo by Jia Jia Shum; @shumjiajia

Nowadays it feels like there is a “healthier” alternative to everything we once indulged in. The “got milk?” dairy campaigns of yesteryear have been overtaken by plant-based dairy alternatives and low-calorie ice-creams are outselling mainstays like Ben & Jerry’s and Häagen-Dazs. Prior to the pandemic, most people were already invested in their health but given the public health scare we’ve been through, more people are interested in consuming foods and beverages that benefit their immunity, metabolism, and mental state.

This heightened health-consciousness also means consumers are rethinking alcohol consumption. Low and no alcohol products have grown are expected to grow by 32% and consumers who still indulge in the occasional cocktail or two have gravitated towards more premium and super-premium spirits because even though they cost more, they are made with higher quality ingredients. The cocktail mixer category grew by 28% in 2020 — no doubt a direct result of consumers making DIY cocktails due to stay-at-home orders. However, the health-seeking cocktail drinker is caught in a conundrum. They want a quality healthy product but have to compromise on what to mix that product with. Currently, healthy cocktail mixers on the market are either tasteless diet soda options or boring tonics.

High-quality ingredient mixers (let’s call them premium mixers) make up less than 10% of the $858 million cocktail mixer category while 45% of spirits are considered premium. The growth in the mixer category is driven by premium mixers. According to 2019 data, there was a 22% year-over-year sales growth in premium mixers versus 2% in traditional mixers. The lack of premium mixer options coupled with health being a key factor in purchasing decisions makes the entire cocktail mixer category ripe for disruption.

Look no further than PepsiCo which validated the category in February by launching Neon Zebra. The company described the move as “an opportunity to build and disrupt this fast-growing category with a product that meets consumers’ needs for convenience”. The $200 billion food and beverage conglomerate is betting on overtaking smaller players within the space. I have decided to take the other side of that bet by investing in Avec Drinks, a New York City-based beverage brand that is creating flavorful, all-natural, and better-for-you mixers (all current flavors are less than 20 calories and 4 grams of sugar).

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