On-trade back on track as Fever-Tree reports growth

By Gwen Ridler contact

- Last updated on GMT

Fever-Tree posts growth but warns of inflationary pressures
Fever-Tree posts growth but warns of inflationary pressures

Related tags: Drinks

Drinks manufacturer Fever-Tree reported revenue growth in the first half of 2022, thanks to a resurgence of on-trade sales.

In the UK, the company reported revenue of £53.5m, up 6% compared with the same period last year.  

While the Omicron variant of COVID-19 impacted sales at the start of the period, momentum built as the year progressed with on-trade showing “promising signs of recovery”. Year-on-year growth of 73% was in line with the group’s predictions.  

Off-trade sales declined by 21%, representing a ‘re-balancing’ of the category as the world emerged from lockdown. However, the US experienced an increase of 144% for off-trade sales compared to pre-COVID levels in 2019, with its Sparkling Pink Grapefruit performing well. 

Impact on full-year​ 

Tim Warrillow, chief executive of Fever-Tree, commented: “Whilst we are seeing positive top line performance and expect to deliver good revenue growth for the full year, the challenging logistical and cost headwinds we highlighted previously have significantly worsened in recent months and we now expect them to notably impact our full year margins. 

“Despite the current challenges of the volatile logistical and cost environment, we continue to make good progress across our regions. The strong and growing consumer demand for the brand, our exciting pipeline of innovation, and the growing interest in long-mixed drinks, gives us more confidence than ever in the long-term opportunity.” 

Fever-Tree also highlighted three key challenges to their business as it saw rapid shifts in the operational and cost backdrop. 

Labour shortages​  

Labour shortages in the US have seen the manufacturer shift more production across the UK to help meet demand, resulting in more costs related to shipping. 

Glass availability has also become restricted, while industry-wide cost pressures – both in materials and logistics – have put further pressure on the business. 

Meanwhile, demand for healthier drinks, the pressure to cut carbon emissions and a world emerging from a global pandemic have all been key areas driving innovation in beverages.​ 

Related topics: Drinks, Operations

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