US becomes Fever-Tree’s biggest market

By James Bayley

Published: 25 January, 2024

Mixer producer Fever-Tree saw its total revenue rise by 6% in the year-end 31 December 2023, a figure below market expectations.

The company, which was founded in 2003, had expected its core profit to total up to 36m, however, analysts now believe the figure to be closer to £30m.

Despite stagnation in the UK market (-1% YOY), the US market became the company’s biggest market for the first time, with sales up 22% in the second half of 2023 YOY.

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Like many other producers, Fever-Tree has grappled with a surge in glass prices in the UK since the Russia-Ukraine conflict, forcing the company to increase prices to protect margins.

US revenues, which rose 22% to £117m, helped to offset some of the inflationary cost pressures related to materials. The UK’s total revenue over the same period was £114m.

Fever-Tree chief executive 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.”

Warrillow also stated that business in the UK on-trade was particularly strong over Christmas and singled out the company’s new Espresso Martini mixer as a standout performer.

“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,” Warrillow added.

As for the year ahead, the business expects revenue for the Fever-Tree brand to rise by 10% and total group revenue to grow by 8%.

It said new glass contracts, where energy prices have been fully factored in and hedged, will help improve gross margins in 2024, combined with lower transatlantic freight rates and other cost savings.

As a result, Fever-Tree expects adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margin to hit 15% this year.

Meanwhile, fellow British drinks maker Britvic has reported an 8% rise in revenue to £443m in the three months to the end of December 2023.

The company saw its Brazilian revenues rise 21% thanks to a recent acquisition in the country.

Changes in the ranges and prices in France offset a decline in the amount of product the Pepsi maker sold there, with revenue up just over 1%.

In the British market, revenue was up by almost 7%.

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