We’ve been closely following the highs and lows of Fever Tree since it was listed in 2014. At first, it was great. The stock rose 20-fold in its first 4 years. Although the valuation became stretched, the company has continued to grow. From 2011-23, revenue has grown at 33% CAGR. 

According to Nielsen, FEVR is now the market leader by value in tonic water across the UK and EMEA and in ginger beer and tonic in the US. However, over the last 5 years, Fever Tree’s gross margin has compressed from 50%+ to ~35% in H1 24. This compression and slower growth has caused the stock to reach 7 year lows although it continues to win market share. 

This learning journey curates our historical work on the company and explores:

• History of FEVR and Schweppes 
• Fever Tree product portfolio and positioning 
• Relationship with spirit brands 
• On-premise distribution vs Schweppes and Q-Mixers
• Off-premise distribution vs Q-Mixers
• A history of pricing and FEVR potential pricing power? 
• Gross margin degradation and logistics issues