Britvic and Fever-Tree have become the latest drinks firms to confirm that the restrictions on pubs, bars and restaurants are taking a toll on their businesses.
Britvic, whose brands include Tango, J2O, R Whites, and Fruit Shoot, saw its total revenue fall 9.8% to £328.1m in the three months to 31 December. The decline was 5.8% on a constant currency basis and excluding the recent disposal of its French private label juice business.
In Britain, sales slid 4.1% as at-home growth of 11.9% was offset by a 32.5% decline in out-of-home revenue due the pandemic-related trading restrictions on the hospitality sector in the run-up to Christmas.
The company stated that the subsequent national lockdown measures had put further pressure on its sales in both the hospitality sector and on-the-go consumption. “Consequently, we would expect performance to continue to be significantly affected by similar adverse channel and pack mix to that which we saw in the second half of FY20, and gradually improve following the lifting of restrictions,” Britvic said.
The company stated that it remained disciplined in the management of cash and discretionary spending but any profit growth will remain subject to the pace of the easing of restrictions.
Britvic Chief Executive Simon Litherland said: “I remain very proud of how the Britvic team continue to respond with pace and agility to the changing landscape. While the introduction of the latest restrictions will undoubtedly impact this year’s results, we will continue to implement our strategy.
“We therefore intend to rebuild investment behind our brands, people and planet initiatives and stay focused on our medium and long-term potential.”
Meanwhile, preliminary figures from premium tonic maker Fever-Tree show it recorded a fall in revenues last year. However, it was not as bad as expected after a weak performance in its core market of the UK was outweighed by growth in its overseas markets as off-trade and e-commerce channels grew to mitigate the damage of hospitality closures.
Over the 12 months to 31 December, the group’s sales were down only 3% to £252.1m compared to earlier guidance of between £235m and £243m.
UK revenues plummeted 22% to £103.3m, despite off-trade sales increasing by 20% as consumers opted for spirit-based mixed drinks as a treat at home. As flagged by Fever-Tree during the year, its on-trade sales were heavily impacted by the periods of lockdown and restrictions, leading to a decline of around 60% year-on-year.
However, a sustained shift to at-home consumption drove its sales in the US up by 23% to £58.5m. Revenue in its Europe division grew 1% to £65.3m, a robust performance given the on-trade exposure of its Southern European markets which have been heavily impacted by the pandemic.
Chief Executive Tim Warrillow said: “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.”
Looking ahead, he said: “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.”
The group stated that it remains in a strong financial position and its EBITDA margin remains in-line with expectations.
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