Fever-Tree riding high on premium gin trend

By Mathew Lyons

Published: 14 March, 2016

Pioneering premium mixer supplier Fever-Tree continued its exponential rise in 2015 - its first full year of trading as a listed company - according to results announced today.

Global sales at the company, which celebrated its tenth anniversary last year, were up 71% to £59.3 million for the year to end December 31, 2015, while profits rose 52.1%.

Sales in the UK grew 84%, with consistent growth across both the on- and the off-trade.

Some 59% of UK sales are in the on-trade, where growth is being driven by the rapidly expanding market for premium gins.

Fever-Tree's range of tonics are its best-selling and fastest growing products, with the Naturally Light Tonic performing particularly strongly, up 111% in 2015.

Fever-Tree's 150ml cans were listed in British Airways First Class and Club World cabins for the first time last year, as well as in BA lounges throughout the UK.

The company has recently secured a further listing for its 150ml Naturally Light Tonic cans with easyJet.

In the off-trade growth was driven by strong sales at Fever-Tree's principal retail customers -Waitrose, Tesco and Sainsbury's - boosted by the introduction of the new 150ml can format in the second half of the year.

Marks & Spencer added Fever-Tree to its range towards the end of the year.

The UK now represents 35% of Fever-Tree's overall sales, with 65% of sales generated overseas.

In the US, where sales were up 65%, the brand's ginger beer comprises some 40% of all sales, driven by the popularity of the Moscow Mule cocktail.

Growth in Europe is driven by the trend for premiumisation in the gin category. Sales at the group were up 66% in 2015, with organic growth running at 82% once turbulence in the currency markets is accounted for.

Charles Rolls, executive deputy chairman of Fever-Tree, said: "Fever-Tree's on-going success is driven by a global consumer desire and demand to drink premium mixers to complement their premium spirits, and our strong first-mover advantage.

"We are increasingly well positioned to take advantage of the growth in both the on and off-Trade in all geographies with the brand's growing international reputation.

"We maintain that the premium segment is still in its infancy and will continue to outperform the other drinks categories as global cross- category premiumisation continues to gain prominence."

Connor Campbell, senior market analyst at www.spreadex.com, said: "Fever-Tree seems to have found the right mix in its first full year as a public company, its 82% surge in profits to £18.2 million causing a 1% rise for the stock, leaving it only a few pence shy of £6."

Fever-Tree is distributed to over 50 countries worldwide and is estimated to have some 50% global market share of the premium mixer category.

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