Fever-Tree sees higher glass prices but revenue grows

Drink maker Fever-Tree has said its plans to avoid high transatlantic shipping costs had been set back in the first six months of the year as the bottling plant it uses in the US struggled to hire enough staff.

The business continued to ship more goods from the UK than it had first hoped for to fulfil demand across the pond.

It also warned that securing enough glass bottles might become a problem in the second half of the year.

This “will limit our opportunity to deliver revenue upside despite the strong demand we’re seeing across our markets”, it said.

Fever-Tree said pressures on glass costs have been driven by the high price of gas.

“Whilst disruption and uncertainty remain elevated across categories, the most notable impacts are expected to relate to the cost of glass bottles, where a sustained elevation in gas price is being passed through by suppliers against a backdrop of limited glass availability across the group’s suppliers in the UK and Europe,” the company said.

Elevated costs pushed down pre-tax profit by 30% in the first six months of the year, to £17.6 million.

Sales rose by 14% to £160.9 million, the business said.

“Fever-Tree has delivered a robust revenue performance in the first half of 2022, with a particularly strong performance in Europe as the on-trade recovered,” said chief executive Tim Warrillow.

“Demand has been strong in the US and we have continued to increase our availability on shelf enabling us to deliver a record month in August, a fantastic achievement by the team.

“Alongside driving topline growth, the business remains extremely focused on mitigating the industry-wide cost impacts and whilst we are still highly mindful of the extreme volatility impacting energy-related and logistics costs, we do expect to see a gradual decrease in our exposure over the medium term.”