The drink was often consumed on May Day, a traditional spring festival. The red color is representative of the worker's blood and celebrations may continue until dawn when many go home with sore heads. By the 1800's people in England would throw celery and potatoes in their drinks (sodas or whisky) in order to try and dull the pain
The origins of the "red-nose" are disputed with one popular theory stating that when cows graze upon strawberries, their breath has a reddish tone making them good candidates for an early version of artificial strawberry extract.
One theory (maybe not so legitimate) is that it goes back to ancient times before spirits were distilled from various fruits like natural ciders and wines.