Ahead of its AGM today, premium mixer brand Fever-Tree stated that it had made a “solid” start to its financial year, trading in line with expectations set out in March despite logistics disruption and inflationary pressures.
In the UK, the company admitted that on-trade sales at the start of the year had been impacted by concerns around the Omicron Covid variant. However, Fever-Tree said it had continued to see momentum build month by month as the hospitality sector returned to more normal trading conditions.
In the US, Europe and rest of world, on-trade sales were said to have been “strong” and are already above pre-pandemic levels. “As we look ahead to the summer months our brand strength, growing presence, and the close relationships we have built with our partners puts us in a strong position to take advantage of the consumer appetite to return to social occasions out of home,” the company said.
Meanwhile, in the UK Off-Trade, Fever-Tree stated that the category had continued to “rebalance” as the on-trade re-emerges whilst also lapping last year’s spike in demand during lockdowns. “We remain well placed as we move into the summer months and have strong plans in place with retailers, most notably around the Platinum Jubilee celebrations in early June,” it said.
Elsewhere, Fever-Tree stated that US consumer demand remains “very strong” with its off-trade sales now up over 150% on pre-pandemic levels in 2019.
In Europe, the company said the brand’s strong sales and value share gains across its key markets remain “encouraging”, whilst in Australia and Canada, its category-leading position is “enabling us to capitalise on and drive the trends in long mixed drinks”.
The group noted that it continues to invest in innovation, with a number of product launches in the UK and Europe so far this year and more planned over the next 18 months.
Looking ahead, Fever-Tree stated that it was continuing to operate against an industry-wide backdrop of logistics disruption, most notably in relation to the shipping of product to the US, and inflationary cost pressures. “Whilst uncertainty remains in the near term, we are working with our supply chain partners on a large number of initiatives, including the ramping up of US East Coast production, which will help to mitigate these cost pressures as we progress further through this year and more so as we progress into 2023,” it said.
The company concluded: “Against this backdrop, our team remains focused on supplying our customers and maintaining our strong top line growth. We are not only confident in the long-term prospects for the brand, but also of delivering another good performance this year and are trading in line with the Board’s expectations.”
In March, Fever-Tree said it expected its full-year revenue for the year to 31 December 2022 to be between £355m-£365m and EBITDA of £63m-£66m.
Patrick Higgins, an equity analyst at Goodbody, commented: “Fever-Tree has delivered a solid start to the year, significantly aided by the re-opening of pubs and restaurants in the on-trade and the UK’s gradual recovery following the Covid-19 pandemic. The boom of in-home consumption exhibited during the multiple lockdowns was also sustained, and off-trade growth was particularly strong in Europe and the US.
“Looking forward, while the group is well-positioned to drive top-line momentum, it has several challenges to navigate in terms including significant inflationary pressures and supply chain disruptions. This will likely weigh on profit growth in the near term though we continue to believe the brand is well-positioned to grow over the medium term giving its market-leading position in the structurally attractive premium mixer category.”
