14 years ago, a late night of drinking inspired Jordan Silbert to make a better tonic water. Today, Q Mixers, the company he founded, makes carbonated mixers, ranging from tonic water and ginger beer to club soda and ginger ale that are served in tens of thousands of bars, restaurants and retail stores.I sat down with Jordan to talk about this journey and why 2020 is the year Americans learned to make co*cktails at home.
Dave Knox:What is the backstory behind Q Mixers?
Jordan Silbert:The whole thing started, like many of the very best ideas out there, after too many drinks with friends. 14 years ago, I was living in a beautiful ground floor apartment in Brooklyn and it was a gorgeous summer night. We had some friends over for drinks and started pouring gin and tonic after gin and tonic. And a couple of drinks in, I realized my teeth were a little sticky. I picked up the bottle of Schweppes and I looked at the ingredients. 25 grams of high fructose corn syrup, natural and artificial flavors, sodium benzoate. I was like," That's weird. I thought tonic water was some bitter water thing." Then I looked at the can of Sprite that was also sitting there.26 grams of high fructose corn syrup, natural and artificial flavors, sodium benzoate. Basically, they were the same things, just one bottle was green and the other was yellow! And we were drinking it drink after drink with a great gin!
I realized the world needed a better tonic water. When my head cleared the next morning, I figured out what tonic water was supposed to be - a little sugar, some carbonated water, this thing called quinine, which initially came from a tree from Peru. So, I ordered a bag of bark on the internet and started mixing stuff up in my kitchen. Eventually I found a little soda plant that could help me make a prototype and I sold that product into Milk and Honey, Gramercy Tavern, Little Branch and Blue Hill at Stone Barns, four of the best bars and restaurants in New York City. In retrospect, it wasn't because I was a master salesman, it was more that these places had agonized over everything else, including their beer, spirits and wines, but also what their plates look like, the lighting, the way they do service. And they just didn't have the opportunity to serve their customers a tonic water of the same quality and sophistication. So, when I came walking in the door, they were already receptive to what I was offering.
After those four places, a gin company found me and brought me to an event at Rockefeller Center where we poured ultimate gin and tonics. Florence Fabricant from the New York Times was there, loved the gin and tonic and she loved the story of my tonic water. The next day I got a call from the fact checking department from the New York Times that we were going to be featured in a story. So, I got a website up in two days and that next week when the article hit, we had 800 places around the world who wanted to buy my tonic water. Meanwhile, I just had a couple of hundred cases in my basem*nt in Brooklyn. So, I said no to just about everyone, except a couple of fancy bars in New York City that I could deliver to and the flagship Whole Foods store in Austin, Texas. That’s when I realized I had something. But it has been a long journey since then. It's been 14 years of blood, sweat, and tears. And now we have this full line of 11 different flavors that are served at thousands and thousands of the best bars and restaurants around the country, as well as carried by just about every major retailer in the country. It has been a long way since that sixth drink that night.
Knox:Fast forward 14 years later, how has the pandemic shifted your strategy for Q Mixers?
Silbert:Going into 2020, we were rocking and rolling. We had a whole company retreat March 11 – 13 down in New Orleans and we were fired up. Our on-premises sales were up by 75% the year before in 2019 and we had just won Marriott's business, which includes the Ritz, JW Marriott, and W hotels. We were on cloud nine. Then things obviously changed - people stopped going to bars and restaurants, but our retail business went through the roof. We had months that we were up 140% year on year. What happened is that Americans started drinking a lot more at home and in particular, drinking co*cktails at home. The trends existed pre-COVID, like a shift away from beer to co*cktails. And there was a big shift within co*cktails towards premium spirits and towards premium mixers. Those trends accelerated during COVID. What we tell people is that Americans learned how to make co*cktails at home during this last year. So, we put our energy and time into our retail business. First and foremost, that was production, as we made sure that we could ship every single order that came in. We were prepared and we were nimble. So, we were able to ship when co*ke, Pepsi, Keurig Dr. Pepper were not able to. Then we made sure our stuff stayed on shelves thanks to a number of digital tools we developed to ensure shelf compliance. Pre-COVID, the big beverage companies sent people into all their stores and during the COVID, they couldn't do that as well. We never had the money or the staff to do that. So, we had developed digital tools and we used those digital tools to stay on the shelf. And then we talked a lot, whether on our own channels or through the media, about how easy it is to make a great co*cktail with our mixers. You just buy a good spirit, put it in a glass with ice, and then pour a can or a bottle of our mixers on top and then add a garnish. And there you have a drink that is good enough for the Four Seasons or any terrific bar or restaurant in the country. People really embraced that, and we had a phenomenal 2020 in retail.
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Knox:What trends do you see continuing in 2021 for the beverage space?
Silbert:The trends that we rode this last year existed before COVID. I love a beer myself, but it's just not as good technology as a spirit. It probably has more calories and gets you less drunk and makes you more tired. There was a movement away from that pre-COVID. There is a reason Molson Coors and ABI are doing what they're doing. They are pushing towards these spiked seltzers and other types of drinks. I also see the move within co*cktails to premium spirits and premium mixers accelerating further. I'm using a good gin; I should have good tonic water. I'm using a good vodka; I should have a good ginger beer. Our biggest challenge was people not knowing there was a better option for mixers. They just thought there was Schweppes and Canada Dry, which are pretty mediocre products. They didn't know there were premium mixers like Q. So, during this last year of COVID, we had millions and millions of people who discovered Q for the first time. We have this demand funnel that we look at - our funnel is basically the opposite of most companies. It's a pyramid as opposed to an inverted triangle, in that very few people know Q Mixers. But the ones who do, love us, buy us again and again, and tell their friends to use us.That kind of virtuous cycle will turn even more quickly as we come out of COVID. The move towards co*cktails and the move towards premium spirits and premium mixers is just going to accelerate further.
Knox:With that in mind, how is Q Mixers aligning the business to meet these predicted consumer needs?
Silbert:At retail, we are talking with our retail partners and explaining to them, “Wouldn't you rather make $5 every time someone buys a mixer than $1.29? And by the way, did you see how Q this did last year and what your customers are saying about us on social media?” So, we are working with them to make sure, first and foremost, we are retailed as we deserve to be. For example, at Kroger, Q Mixers, little Q Mixers, has 14 linear inches of shelf space in their standard mixer set, usually on the bottom shelf. Meanwhile, Schweppes and Canada Dry, co*ke, and Pepsi have huge amounts of space. However, last year, during this pandemic, Q Mixers was a number one driver of incremental dollars! We were responsible for generating the most new dollars in the set, in terms of existing mixer customers switching to Q from the mainstream alternatives, new customers starting to buy stuff from the set, and people just drinking more mixers. Little Q Mixers was the number one generator of incremental dollars overall! So, we talked to Kroger and said, "Hey guys, you guys can make a lot more money if you actually give Q the shelf space that your customers are saying they want." And it looks like they are now going to be expanding our presence on their shelves. We are now working with all our retail partners in a similar way.
Our mixers come in beautiful 6.7-ounce glass bottles and 7.5-ounce cans, as well as larger bottles. Pre-COVID we were working with our bar and restaurant partners on a service standard we call a “spectacular serve”, which some people call club service: when you order a gin tonic or a vodka soda, the server brings over a glass filled with ice and a serving of booze as well as a garnish, with a full bottle of mixer alongside. Then the server starts the pour of the club soda in front of the customer then leaves the rest for her to pour herself to her exact preference. Bars and restaurants are very excited about using this service technique to delight their guests with an experience they couldn't or wouldn’t have at their own house. And that was working really well for our sales team as a way to offer their bar/restaurant partners a way to differentiate the experience they offer their guests from a regular bar around the corner. We have now added the safety element as well to our discussions. Soda guns are the number one cause of health code violations for bars/restaurants in New York City. We didn't push that pre-COVID, but we are now talking more about how a customer feels a lot safer in this environment with their drink poured in front of them out of a clean bottle.
Knox:Looking back on your entrepreneurial journey, what’s been the most impactful advice you have received?
Silbert:What I do day in day out and what the organization does day in day out today is a lot different than it was in the beginning. Back then I was carrying a backpack, knocking on bar and restaurant doors to get them to buy my products. I was on the line at the production facility at 5:00 AM batching the thing up and then would watch every single bottle be made throughout the day. And that's fortunately not what I do anymore. So there have been different stages and different advice has been helpful along the way.
However, I think the one piece of advice that has been the best came from Danny Meyer, the guy who owns Gramercy Tavern and arguably the leading restaurateur in America. When I initially sold into Gramercy Tavern, I was so excited that I read his book called Setting the Table. I called his office and asked for his email address. I sent him an email that said, "Hi, Mr. Meyer. My name is Jordan. I made a tonic water that Gramercy Tavern is starting to serve, and I just read your book. It's amazing. I would love five minutes of your time to ask you a couple of questions about being an entrepreneur." And Danny, because he is the nicest person on the planet, said, "Sure, why don't you swing by Eleven Madison Park next Tuesday afternoon for a cup of coffee." So, I did. I had my list of 25 questions. And he said, "Jordan, before we start, I'm going to tell you one thing that someone told me when I started, and I completely ignored them. I expect you to ignore me as well. But I just say, please do not." He then said, "Try to enjoy this process of building this company. You will be successful. Don't worry about that. Worry about enjoying the process along the way."
My reaction was "What? First of all, that's the nicest thing anybody besides my mom has ever said to me. Second, how do you know I'm going to be successful? I just got a couple hundred cases of tonic water in my basem*nt in Brooklyn." And he said, "Look, you sold this product into Gramercy Tavern. You immediately read my book, emailed me, and now I'm sitting having a coffee with you. You got something. This is going to be very successful. Try to enjoy the process."
And the real answer is I haven't done as good a job of that as I could have. Virtually every day I try to do a little better at it. And as my company has grown and I've taken on more of a leadership role, I think that advice is even more wise today in that no matter how great your business is, there are going to be ups and downs, and there are going to be high highs and low lows. And if you're not taking a second to enjoy things, to really pause and celebrate your victories both personally, but also with the people that you're working so hard with, it becomes a grind and it just becomes one problem after another that you are solving. But if you try to have some fun, particularly by celebrating some of the victories you have along the way, it just keeps you going. I think that's the real secret of building a business: showing up and bringing good energy and optimism literally every morning to your business and your team.
