Mixer producer Fever-Tree reported an 11% sales decrease in the first six months of 2020 due to the impact of the pandemic in the UK and Europe.
For the six month-period ending 30 June 2020, the group’s revenue reached £104.2 million (US$136m) – down from £117.3m (US$153.2m) during the same period in 2019. The group’s net cash sat at £136.9m (US$178.7m)
Tim Warrillow, CEO of Fever-Tree, said the group witnessed an “encouraging start” to the year amid the pandemic. “While we certainly aren’t immune to the ongoing challenges of Covid-19, our performance and our investments so far this year, coupled with the growing interest in long mixed drinks, gives me confidence that we will exit the crisis in an even stronger position than we entered it,” he said.
The firm said its off-trade sales “exceeded expectations” across its regions.
“People’s interest and excitement about mixing drinks at home has really taken hold over the lockdown period, attracting more households to the Fever-Tree brand than ever before,” said Warrillow.
“Consequently, we have increased our penetration in the UK, consolidated our number one position, and driven value share gains in the US, Europe, and as far afield as Canada and Australia.”
In the group’s core UK market, sales fell 20% to £48.3m (US$63m). The brand maintained its number one position in the UK mixer category at retail, Fever-Tree said. In the market, the brand rolled out a larger pack format which delivered a “good rate” of sales growth, and launched its new Soda collection.
Fever-Tree had also “upweighted marketing spend” to target at-home consumption in the UK with its first national television advert to drive “significant growth” in consumer awareness.
Sales in Europe decreased 29% to £20.5m (US$26.7m), hit by temporary importer destocking during lockdown.
Fever-Tree’s second biggest market, the US, witnessed a “very strong” performance ahead of expectations, growing by 39% to £27.4m (US$35.7m).
The rest of the world region rose 2% to £8m (US$10.4m) with “very encouraging” off-trade growth in Canada and Australia.
The firm also said it had invested in online retail platforms to boost “significant growth” in the channel globally. The group had maintained its budgeted operating costs at £60m (US$78.3m) for the full year.
Warrilow added: “Despite the on-trade closure for a large proportion of the first half of the year, we have continued to support our on-trade partners across our regions and are well-placed to benefit from the return of this important channel.”
Warrilow also said the group had not furloughed any of its staff and had redeployed some team members across the business. The firm also hired 20 new employees during the first half of 2020.