Nicole Tanner wasn’t going to let anything stand between her and the opening of her new drive-thru drink concept, Swig, 12 years ago—not even a century-old rivalry between a pair of multibillion-dollar beverage companies.
Tanner’s idea was a beverage-focused concept that sold both Coke and Pepsi, not one or the other. As anyone who knows this industry understands, the two companies don’t often go into the same location. But Tanner was having none of that. She had the Coke deal just before opening, but Pepsi was not eager to go along with it.
Tanner opened, anyway, pouring cans of Pepsi for customers who ordered them. “When we first opened up, we had our Coke machine, but Pepsi wouldn’t come in,” she said. “We were just popping cans of Pepsi and Mountain Dew for weeks, until Pepsi said ‘OK, fine.’
“We just had to open and they had to see us work.”
It’s fair to say that Swig has worked out OK. The brand was on track to open its 40th location in Texas this week and plans many more for the state. It’s opening another 15 locations this year and has 30 on tap to open in 2023. It’s also eyeing franchising. “We’re hitting the gas,” Tanner said.
Swig’s growth is coming along with an explosion in drink concepts, and not just those specializing in coffee. The drive-thru concepts Dutch Bros and Scooter’s Coffee have increased system sales by two-thirds over the past two years, according to data from the Technomic Top 500 Chain Restaurant Report. Or bubble tea chains such as Gong Cha, which has seen sales more than double over the past three years.
Even within the coffee brands themselves, cold beverages are increasingly dominant—three-quarters of Starbucks’ beverage sales are cold beverages, for instance.
Consumers, it appears, love getting drinks any time of day and are increasingly getting them at specialty concepts.
Tanner was one of them. “I would go to Sonic to get my drink fix,” she said. “I love Diet Coke. I love it in a good foam cup with pebble ice. But I was waiting behind people getting food. And sometimes my cups would smell like grease or fries. It’s not the best way.
“I would go to McDonald’s, same thing. Or I’d go to a local gas station, get out of the car, turning off the car. It’s just a hassle. Why does this not exist where it’s drive-thru drinks?”
Swig founder Nicole Tanner. / Photograph courtesy of Swig
Tanner opened the location in April 2010 in St. George, Utah, a tourist destination near the Arizona border in the Southwest portion of the state. “We organically grew it,” she said. “We paid ourselves when we could. Before I knew it, there were lines around the corner. People caught on.”
Three years later, they got a break when a news station in Salt Lake City featured the concept, and soon enough, the location drew in spring breakers and then people from California to Colorado. Swig grew to 17 locations by 2017, and then Tanner met Andrew and Shauna Smith, the founders of Four Foods Group out of Utah that would later become the operations-focused investment firm Savory Restaurant Fund.
The brand had opportunities to franchise. “We didn’t feel great about franchising,” Tanner said. “It was scary. If you’re not ready, it can be not good for the brand.”
Instead, they worked with what is now Savory, which helped Swig refine the brand, including a new logo and new branding, and developed systems to help the restaurants thrive.
Swig’s strategy has focused on customer service, even through that drive-thru. “We never take our order through a squawk box,” Tanner said, preferring workers outside taking orders with an iPad. “Part of Swig’s goals is to have an amazing product, with amazing customer service and a fast-moving line,” Tanner said. “We really feel like we’ve been able to do that with the partnership with Savory.”
“Our customers feel that,” she added. “They will drive past other soda places. They feel special here. They come and get a drink from us.”
The specialty product is “Dirty Soda,” or house-made concoctions that make unique creations out of ordinary fountain drinks. Customers also customize their own beverages. “You will never see me in a Swig drive-thru line,” Tanner admitted. “I’m going to come in and make my own drink.”
Customers do that, too. “They customize it and we want them to. We’re going to make it exactly the way they want,” she said.
Swig specializes in "Dirty Sodas," or customized concoctions customers create themselves.
Because the brand has both Coke and Pepsi, it can make concoctions like the “Dew Gooder,” which features Mountain Dew, pineapple, raspberry puree and coconut cream, and the “Just Peachy,” featuring Coke Zero, pineapple, peach puree, lime and coconut cream. There is also “The Founder,” featuring Diet Coke, sugar-free coconut, lime and coconut cream.
The company included boba tea among its early products and later added sparkling and still water-based drinks, which now make up about a quarter of sales. It also developed its own line of energy drinks. It also sells cookies. But the beverages are the draw.
Swig has expanded into Idaho, Arizona and Oklahoma. It has huge plans for Texas and is also targeting Las Vegas. “We’re still getting started,” Tanner said.
She believes that there is considerable growth in the niche segment and looks to coffee for inspiration. “The segment is now being talked about because of places like Swig,” Tanner said. “When coffee became the cool thing, we actually had coffee forever. But then Starbucks entered the scene, and it’s now cool. Soda has been around forever. But as far as customized, fountain-based drinks, we started a new market.”
And a customizable chain of drive-thru fountain beverage restaurants could not just have either Coke or Pepsi but both. So Tanner’s early determination, it seems, has proven vital to the brand’s future. “I’m a very determined person,” she said. “If I believe something is going to work, I’m going to try my darndest. I’m not going to let anything stand in my way.”
Now, Tanner says, the brand may well be ready to franchise. It has a lot of work to do before it can start selling, but Tanner believes the brand is at that point now. “Franchising is in the near future,” she said. “We’re ready for it. We’ve had thousands of franchise requests all over the world.
“I think Swig should be in every town.”
Given Tanner’s determination, it would be a mistake to bet against her.