Lockdown cocktail hour keeps the fizz in Fever-Tree
Fever-Tree, supplier of premium carbonated mixers, has given a trading update for 2020, reporting a resilient performance, despite the challenges of COVID-19. Fever-Tree has said today that total revenue for 2020 is expected to be £252.1m, which will be 3% down on the previous year.
With the hospitality industry closed for much of 2020 in the UK, revenue dropped 22% during the year with on-trade sales seeing a decline of 60%. However, off-trade sales were up 20% compared to 2019 as the company focused efforts on getting their products into homes, finishing the year as the clear market leader.
Tim Warrillow, CEO of Fever-Tree commented: “I am very proud of how the Fever-Tree team has responded over the course of 2020 and the results that we have delivered. The last twelve months have highlighted the strength of the Fever-Tree brand amongst our consumers and customers as well as the fantastic team and partners we have in place. We made a conscious decision not to furlough any of the team while continuing to invest in the opportunity ahead and this has positioned us well as we look beyond the current uncertainty.
The COVID-19 pandemic has thrown up many challenges but it has also accelerated the trends we have been talking about for a number of years – namely the growing interest in premium spirits and long mixed drinks as at-home mixing has taken hold not only with consumers but retail and spirits partners alike. Our ability to capitalise on and drive this trend has seen Fever-Tree reach more households and become a feature in more fridges worldwide than ever before.
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 twelve months underlining the global opportunity still ahead for the brand. I am of course mindful that uncertainty remains especially in terms of the timing of reopening of the On-Trade across many markets but our performance over the last year, combined with our track record against the competition and the supportive global trends gives us confidence in the future growth potential for Fever-Tree.”
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown: “Lockdown cocktail hour clearly proved a tonic for Fevertree customers during lockdown as sales from supermarkets helped offset the closure of bars and restaurants around the world. After a very challenging first half, the group turned out a second act full of fizz, with revenue for the year now expected to come in ahead of guidance at £252m.
“What is particularly encouraging, and a key part of its growth strategy, is that Fevertree is continuing to shake up the market in the US, Canada and Australia. Fevertree’s brand awareness in the US is clearly growing fast, with overall revenue up by almost a quarter in 2020. Locked down Americans are mixing many more long drinks at home, with spirit consumption rising, and Fevertree has been well placed to tap into those habits. Even though the pandemic has left many people with less disposable cash, the premiumisation trend shows little sign of going flat. Instead Fevertree seems to be one of the tonics to splash out on in the search for treats to keep lockdown boredom at bay.
“Although revenues from it’s on trade business have fallen by 60%, year-on-year, the company also says it’s working hard to support relationships with the pub, bar and restaurant trade to ensure that when the sector reopens fully, they will be well placed to benefit from the return of custom. This bodes well for sales in the summer months, but with the bar and restaurant sector facing possible closure in the UK until much later in the Spring, Fevertree’s supermarket sales will keep being crucial in the months to come.’”