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US overtakes UK in Fever-Tree FY sales

Tonic and mixer producer Fever-Tree saw revenue rise by 6% last year as the US overtook the UK to become the group’s biggest market.

Fever-Tree cocktail mixers
Fever-Tree’s new Espresso Martini mixer was popular in the UK over the festive season

The UK-headquartered company reported sales of £364 million (US$463.8m) last year and increased its market share in all of its key regions.

The group expects to deliver adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the full year of approximately £30m (US$38.2m). The company said it had doubled its EBITDA during the second half of 2023 after improving its business processes and offsetting higher costs for materials.

Fever-Tree saw revenue rise by 9% in the first half of 2023, with sales in the US climbing by 40%.

For the full year, US sales rose by 22% to £117m (US$149m). The brand’s off-trade sales rose by nearly a quarter (24%), according to Nielsen figures. Its growth in the channel was driven by its new canned format.

In the US on-trade, the brand remained the leading mixer, extending its number-one value share position in both the tonic and ginger beer categories (Nielsen 2023 full-year data).

Sales in the UK dipped by 1% to £114.8m (US$146.3m). The brand reported ‘good trading’ in the fourth quarter, particularly in the on-trade, where Fever-Tree ended the year with its strongest value share to date despite pressures from the cost-of-living crisis.

European revenue, including sales from its German distributor Global Drinks Partnership (GDP), grew by 4% to £105.4m (US$134.3m). Excluding GDP, Europe sales were up by 6%.

Fever-Tree was hit by soft consumer confidence in a number of European markets, most notably in Germany.

The rest-of-the-world (ROW) region declined by 14% to £27.2m (US$34.6m) due to a one-off inventory buyback after a new subsidiary was established in Australia.

Excluding Australia, where it is the leading premium mixer, ROW sales were in growth.

CEO Tim Warrillow said: “The Fever-Tree brand has performed well in 2023, growing our market share in all of our key markets, despite a challenging macroeconomic environment.

“The US ended the year as our largest region, where we have extended our leadership position in both the tonic and ginger beer categories. The brand enjoyed a strong Christmas trading period in the UK, especially in the on-trade, whilst at home, our new Espresso Martini mixer clearly became a festive drink of choice.

“Despite recession in Germany impacting our European performance and the one-off effect of the transition to our new subsidiary in Australia, we remain confident of driving good growth in those regions in 2024.”

For 2024, the company reiterated its guidance of 10% revenue growth for the Fever-Tree brand.

However, Fever-Tree said it would ‘refocus’ its portfolio of non-Fever-Tree brands (which includes US mixer brand Powell & Mahoney), resulting in an estimated £7m (US$8.9m) reduction in sales for 2024. As such, it predicts total group revenue to rise by 8% this year.

The CEO expects the company to double its EBITDA in 2024, by improving operational efficiencies, plus a decrease in inflationary costs.

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