Fever-Tree: Distribution, Spirit Partnerships, & Gross Margin
inpractise.com/articles/fever-tree
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
Related Content
Diageo & Brand Innovation
Former Innovation Director at Diageo
Brand Marketing: From Coca-Cola to Uber
Former Global Chief Marketing Officer at Uber and Beam Suntory
Fever Tree Australia: Positioning & Distribution Strategy
Former Director at Fever Tree's Former Australian Distributor
Diageo, Fever Tree, Naked Wines & A History of US Alcohol Distribution
Copyright Notice
This document may not be reproduced, distributed, or transmitted in any form or by any means including resale of any part, unauthorised distribution to a third party or other electronic methods, without the prior written permission of IP 1 Ltd.
IP 1 Ltd, trading as In Practise (herein referred to as "IP") is a company registered in England and Wales and is not a registered investment advisor or broker-dealer, and is not licensed nor qualified to provide investment advice.
In Practise reserves all copyright, intellectual and other property rights in the Content. The information published in this transcript (“Content”) is for information purposes only and should not be used as the sole basis for making any investment decision. Information provided by IP is to be used as an educational tool and nothing in this Content shall be construed as an offer, recommendation or solicitation regarding any financial product, service or management of investments or securities.
© 2024 IP 1 Ltd. All rights reserved.