Home drinking and US expansion help Fever-Tree avoid massive Covid hit

Fizzy drinks maker Fever-Tree’s previously explosive growth was brought to a halt last year by the Covid-19 pandemic, the company said on Thursday, but it managed to avoid a major hit.

Fever-Tree said revenue from tonic water and other drinks dropped by 22% in the UK over the year compared with 2019.

However, the company was saved from a major international revenue hit as it continued to grow in the US and worldwide.

US revenue reached £58.5 million, an increase of 23%, while the rest of the world market, including Australia and Canada, rose by 58% to £25 million.

Globally, revenue fell only 3% to £252.1 million, which may be a shock to a brand which has delivered growth around 10% per year in recent times, but the business still beat the guidance it provided in September.

As a result, shareholders celebrated and the company’s share price rose by 3%.

“I think the fact that we’re only 3% down is amazing.

“Bearing in mind half our business historically has been the on-trade.

“So, you know, the way that brand and the business has performed, I really am actually incredibly proud of,” chief executive Tim Warrillow told the PA news agency.

The company notched up 3% growth globally in the second half of the financial year, he added.

While home drinking flourished, it was the Fever-Tree’s on-trade – sales in bars, pubs and restaurants – where the company felt the pinch.

This trade dropped by 60% in the UK as most of the hospitality industry was forced to close for months.

But when the on-trade was able to re-open for a few months late in the summer “it really did spring back into life,” said Mr Warrillow, who therefore is positive about the sector’s future when restrictions finally lift.

He told the PA news agency: “I remember at the time people saying ‘I’m not sure I’d be so comfortable going back in the same way as I used to’.

“But it seems that people shook off that reticence pretty quickly when the option was actually there.”

“I am optimistic about it, we really are sociable animals at the end of the day and of course in the UK pub culture is well entrenched.”

However, Fever-Tree said it was ready to benefit when the sector reopens, hopefully in the months to come.

Mr Warrillow said: “While our performance across the off-trade in the UK and Europe has been very encouraging, special mention must be made of our performance in the US, Australia and Canada, where we have seen outstanding growth in the past 12 months underlining the global opportunity still ahead for the brand.”