Fever-Tree UK sales lose fizz on weak consumer spending
Fever-Tree has warned that full-year sales are set to miss annual forecasts after a weak performance in the UK.
The tonic maker said its UK sales for the off-trade – supermarket and off-licence sales – were below expectations in the second half of the year on the back of “weak consumer spending”.
However, it said it has continued to “perform well” in UK bars, pubs and restaurants, after gaining a number of new accounts.
Fever-Tree had previously warned that it would struggle to repeat its “exceptionally strong” summer of 2018.
In a trading update on Wednesday, the drinks business said it failed to keep up with its performance in July and August 2018 as consumer uncertainty hit sales.
However, it said it has been buoyed by rapid sales growth in the US, which has surpassed its expectations.
US sales accelerated in the second half of the year on the back of new distribution deals, while the company has also signed a contract with a new bottling partner on the West Coast for 2020.
It said it now expects sales growth of 34% in the US for the year, ahead of its forecasts, as the premium mixer sector continues to boom.
Meanwhile, across Europe, sales also accelerated in the second half of the year, with the company predicting 19% growth for the whole year.
Chief executive Tim Warrillow said: “We continue to see growth across all four regions. Indeed, sales accelerated in our key growth markets of the US and Europe.
“Fever-Tree’s progress in the US is particularly encouraging and the signing of a US bottling partner is a further step in building our operations in this exciting market.
“Despite challenging comparators, our performance in the UK on-trade underlines the strength of the brand and, while the mixer category in the off-trade is moderating alongside the recent slowdown seen across the wider grocery channel, we continue to maintain our clear UK market leadership position.”