The premium mixer’s rise in popularity in the UK has been a real success story; however, replicating that success across the Atlantic hasn’t been as easy.
Issues in the US haven’t been demand related, with US growth averaging 26% in the last three years. However, significant inflation in transatlantic shipping and input costs, most notably energy intensive glass, has seen Fever-Tree’s operating margin fall from 33.6% in 2017 to just 9.3% in 2022. Management has been forced to lower guidance on multiple occasions, which has left investors unimpressed.
However with input costs set to normalise in late 2023 and 80% of US supply now being made in the US, Fever-Tree are hopeful that their foray into a market where currently just 10% of mixers sold are premium (vs 40% in the UK), might finally start to come good.
