Fever-Tree reports ‘encouraging’ H1 2019 sales
Tonic water producer Fever-Tree has reported a 13% revenue increase during the first half of 2019, boosted by the UK and US.
In the group’s interim results for the first six months to 30 June 2019, Fever-Tree said revenues reached £117.3 million (US$145.9m) – up from £104.2m (US$129.6m) during the same period in 2018.
Fever-Tree said it had been an “encouraging half” with all regions witnessing “continued growth despite lapping some exceptional comparatives”.
The UK – Fever-Tree’s largest market – delivered revenue of £60.7m (US$75.5m), an increase of 5%. Fever-Tree said that the result was expected following “several years of exceptional growth” and it was impacted by “poor weather” which had a “dampening effect on growth rates”.
The group said it has “consolidated its position” as the number one mixer by value across both the UK off-trade, with a 39% value share and the UK on-trade, where it holds a 45% value share.
During the first half, Fever-Tree released its first ready-to-drink (RTD) bottled gin and tonics. The brand said the RTD category has “potential over the longer term”.
In the US, Fever-Tree delivered a “strong performance”, with revenue reported at £19.8m (US$24.6m) – an increase of 31%. The producer said it had built on operational changes since taking direct control of operations last year.
The firm said that the premiumisation of spirits has helped to move consumers from beer and wine towards spirits. Fever-Tree said its relationship with spirits companies has “continued to strengthen with a broad range of co-promotional activity”.
Tim Warrillow, CEO of Fever-Tree said: “While we have not been immune to the impact of the unseasonably poor weather in the UK, we have further strengthened our market leadership position within the UK and have seen positive momentum in Europe and the rest of the world reflecting our increasingly global footprint.
“The move to long mixed drinks is gathering momentum and starting to win share from beer and wine.
“Our broad range of high-quality mixers, relationships with spirits companies, brand strength and our growing international distribution network provide us with confidence in the significant global opportunity that lies ahead for the group.”
In continental Europe, revenues rose 13% to £29m (US$36m). The group increased its investment in the region and is benefitting from having its own workforce.
The rest of the world region delivered sales growth of 49% to £7.8m (US$9.7m), boosted by Australia and Canada.
“We are increasingly optimistic about the global opportunity for Fever-Tree and continue to invest across all our regions, particularly the US and Europe,” Fever-Tree said in a statement.
As the group grows its footprint globally, Fever-Tree said it has “continued to expand its outsourced production capabilities”.
The producer said that “further progress” has been made in identifying a bottling partner in the US to “underpin future growth” in the market.
Warrillow added: “Whilst we remain mindful of the tough comparators over the remainder of the summer in the UK, the board anticipates that the outcome for the full-year will be in line with its expectations.”