Fever-Tree sees mixed results in H1 2024
While Fever-Tree experienced continued growth in the US, poor weather contributed towards a decline in the UK during the first half of 2024 (H1).
During the six months that ended on 30 June 2024, Fever-Tree’s total revenue was relatively flat. The company’s revenue rose marginally during H1 2024 from £170.0 million (US$223.5m) in 2023 to £170.6m (US$224.3m) this year.
The US delivered a positive performance with a 7% uptick in revenue during H1 2024 to £60.3m (US$79.3m), compared with the same period in 2023 (£56.1m/US$73.8m).
In the UK, revenue dropped by 6% from £53.8m (US$70.7m) in H1 2023 to £50.9m (US$66.9m) in H1 2024.
The rest of the world region (ROW) reported strong double-digit growth, with revenue up by 56% from £9.6m (US$12.6m) in 2023 to £14.9m (US$19.6m) in 2024.
Tim Warrillow, CEO of Fever-Tree, said: “The Fever-Tree brand performed well against a tough market backdrop. We continued to deliver double-digit revenue growth in the US at constant currency, as well as a strong performance in our ROW region.
“The first-half performance in the UK and Europe was impacted by unseasonable weather at the start of summer alongside distributor order phasing in Europe, but we have seen a strong improvement in these regions as the summer belatedly arrived.
“Whilst the first half was challenging, we are controlling the controllables. We have delivered substantial margin improvement, resulting in a c.80% increase in EBITDA year on year, as well as driving share gains against the competition across all our regions, demonstrating the growing strength of the Fever-Tree brand.”
Fever-Tree’s non-tonic water products now comprise more than 40% of global revenues. The brand noted particularly strong sales from its ginger beer.
Optimistic outlook for FY2024
Looking to the remainder of the year, Fever-Tree forecasts growth of between 7% to 10% during the second half of 2024, resulting in full-year growth of around 4%-5%.
Warrillow added: “We’re optimistic of an acceleration of growth across the second half of the year and have seen a much more positive trading performance in July and August.
“Looking further ahead, our continued investment in the brand and focus on innovation in recent years ensures we are better positioned than ever to capitalise on the long-term drink trends, both in terms of continued spirit growth and premiumisation but also as adults continue to seek out a broader range of premium drinks, both with and without alcohol.”
Looking at Fever-Tree’s core regions, beginning with the US, and the brand’s off-trade performance was particularly strong. Fever-Tree experienced retail sales growth of 19% year on year in the US off-trade, and its 150ml can format grew by more than 50%.
A trio of its new releases – Margarita, Light Margarita and Bloody Mary – have also gained market traction, the brand noted. It will launch its Espresso Martini in the US later this year.
A challenging on-trade environment dampened Fever-Tree’s performance in the UK. It does, however, remain the biggest brand by value across all mixer subcategories. In the UK off-trade, sales were flat.
The company noted its tonic waters are still the best-selling products in the UK, but also said its non-tonic options were gaining share and driving growth.
Across Europe, Fever-Tree saw a 12% revenue slump during H1. This was impacted by the phasing of distributor order.
The weather impacted on-trade sales, and low consumer confidence was also a contributing factor to the decline.
In the ROW, Australia was a key market during H1. The brand has been lapping the inventory buy-back in Australia during the transition to its new subsidiary, which was established last year.
Recently, SB explored whether the slowdown in gin sales would impact the tonic and mixer category.
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