Fever-Tree reports 40% revenue growth in 2018

Tonic water producer Fever-Tree has confirmed its full-year revenue for 2018 grew 40%, boosted by its performance in the UK.

Fever-Tree says the trend for “premium long mixed drinks continues to gather momentum”

Fever-Tree reported that revenue for the year ending 31 December reached £237.4 million (US$313.5m) – up from £170.2 million (US$236.2m) in 2017.

Profit after tax hit £61.8m (US$81.6m), up from £45.5m (US$60m) in 2017.

In the UK, Fever-Tree delivered 53% revenue growth to £134.2m (US$177.2m), consolidating its position as the number one mixer brand in UK retail with 42% market share.

The company’s performance during the summer was aided by hot weather and “significant” national events such as the Fifa World Cup and the royal wedding of Prince Harry and Meghan Markle. More gin was sold during summer last year than the summers of 2014 and 2015 combined with the category now worth £1.9 billion (US$2.5bn) in the UK.

The US witnessed a sales revenue growth of 21% to £35.4m (US$46.7m), with growth accelerated “slightly” in the second half of 2018. Fever-Tree took over direct ownership of sales, marketing and distribution in the US in June.

In continental Europe – the group’s second largest region – sales revenue grew by 24% to £55.5m (US$73.7m).

The rest of the world region saw its revenue increase by 48% to £12m (US$15.8m) and “continues to represent plenty of interesting opportunities” for Fever-Tree. Australia, Canada and South Africa all performed “strongly”.

Tim Warrillow, co-founder and CEO of Fever-Tree, said: “2018 was a significant year for Fever-Tree. In the UK, we strengthened our position as the leading mixer brand in the off-trade.

“In the US, we successfully established our own operations and the business made real progress in deepening and widening its presence in multiple European regions.

“As the world’s leading premium mixer brand with a strengthening global distribution network we are well set to drive the international opportunity as the move towards the premium long mixed drink continues to gather momentum around the world.

“At this early stage in the year, the group is trading in line with board expectations and we remain excited about the size of the opportunity that lies ahead.”

Fever-Tree also said it is “closely monitoring the potential impact and risks” of the UK’s upcoming departure from the European Union, including a no-deal scenario. The group has a designated committee who meet regularly to assess preparedness against the different potential scenarios.

Fever-Tree’s outsourced business model and increased European bottling footprint offers a “degree of operational flexibility which leaves the group well placed to respond to and mitigate the potential impacts” of Brexit’s different scenarios.

The group said it will continue to develop limited edition variants, following the “great success” of its Cucumber Tonic last summer which has now joined Fever-Tree’s permanent range.

Looking to market developments, Fever-Tree said that it is “ becoming evident” that spirits producers are “increasingly focused” on long-serve strategies for their portfolios.