To say the least, it has been a difficult period in recent years. Not only for Swedish Tonic but for most beverage companies in our niche. The pandemic came as a shock and we, like many others, had to adjust and adapt in the best possible way. We fought through this tough time and when everything started to return to normal, the war came, which put many well-functioning flows out of play. This has led to an increase in lead times, i.e. the time it takes for products and components to be delivered, and prices for virtually everything we buy have gone up. Another decisive factor has been the Swedish currency, as we as importers of, for example, glass from Europe have made the increasing prices rise all the more. As a small player in the industry, this becomes devastating when the margins go down in combination with an already strained liquidity after two tough pandemic years.
The tonic and beverage industry has long looked the same. It's all about volume. Without high volumes, products become more expensive. With more expensive products, producers find it difficult to get volumes as consumers are largely looking for attractive offers.
On top of this, we have food laws/regulations that make it tricky for smaller manufacturers to stand out with what we often do well - content. In our case, we only work with the real raw material. This means that if we say we have a tonic with raspberries, the product contains the actual raw material - raspberries. Today, far too many processed foods contain something called "natural flavoring". A natural flavor is an additive that, contrary to its name, does not have to be natural at all. In fact, in most cases the flavor is far from natural at all. With this definition, producers can write that they have natural flavoring in a raspberry tonic when in fact the product does not contain any raspberry. For example, there are strawberry flavors that contain, for the most part, synthetically produced banana aroma, but are perceived as strawberry.
In the case of the tonic, most beverage companies use an added quinine flavor. Quinine is an aroma that can be found in Chinese bark which is the raw material the tonic was born from and the bark adds the bitter taste to the tonic water. The problem with adding only the quinine aroma is that the flavors from the bark are completely excluded. It's like saying that you have coffee in a product, but of the 600 flavors found in a coffee bean, you only chose to use one flavor. Then, in my view, the product does not contain coffee.
So why do many beverage companies use natural flavors? The answer is quite simple - it is extremely cheap and the consumer thinks they are getting an equally natural product. That said, this makes it difficult for smaller players like Swedish tonic to compete with a product that is significantly more expensive to produce and at the same time has no obvious market advantage with its content.
Does it make us rethink the content? Absolutely not! We strongly believe in what we do and we see a dysfunctional market that we want to change. If it's not already clear, we believe in clean ingredient lists, clear flavors and natural processes. Of course, there will always be volume companies that compromise on content, but we want that to be reflected in the ingredient list. We are a natural beverage company and regardless of what we produce, we should be able to stand behind the content. Whether it's a tonic, ginger beer or lemonade. If we make a product with sugar, we must ensure that it is grown in our local area, and if we sell a sugar-free product, the sweetening must be as natural as possible and have a minimal negative impact on the drinker.
We clearly have a long way to go before Swedish Tonic has the place in the market that we deserve and until then we will continue to fight for what we believe in. The market looks like it does right now and we believe that the industry will need to develop. This is probably best done with similar players who continue to do what we do and thus make consumers realize the differences between large-scale artificially produced volume products and natural (slightly more expensive) products.
//Gustaf Ytander, Medgrundare och VD på Swedish tonic
