Mixer maker Fever-Tree says sales dampened by belated European summer

Sales have gone flat for premium mixer brand Fever-Tree as it said poor weather put a dampener on summer drinks across Europe.

The drinks business reported total revenues of £170.6 million over the first half of the year, edging up 2% compared with the same period a year ago, at constant currency.

It said sales were impacted by a “tough” consumer backdrop and summer arriving belatedly across the continent, particularly impacting June.

Fever-Tree makes mixers including tonic water, ginger ale and soda, designed for more refreshing drinks typically associated with warmer weather.

In the UK, where it says it is the top mixer brand, revenues declined 6% year-on-year.

This was partly impacted by weaker demand for its gin-related drinks, with the brand best known for its range of tonic waters.

Nevertheless, the company said sales had picked up in July and August with the arrival of summer, growing 13% compared with the same months last year.

It also highlighted a strengthening performance in the US, its largest market, where sales rose by a 10th to just over £60 million.

While tonic remains a best-seller, Fever-Tree said spirits rum, vodka and tequila were gaining a greater share of the market over recent years and making up a growing proportion of its income.

It has moved to cash in on the growing demand by creating new flavoured sodas and cocktail mixers, such as espresso martini and mojito, with the latter seeing sales more than double since its launch.

Meanwhile, the company was knocked in recent years by an increase in global shipping and energy costs, driving up the price to make its glass bottles, a key element of the brand.

Fever-Tree said it took action to mitigate those costs, including raising prices for customers across its key markets.

Nevertheless, the weaker-than-expected half-year performance led the firm to lower its outlook for revenues this year, with growth forecast between 4% and 5%, compared with a previous expectation of about 7%.

Tim Warrillow, chief executive of Fever-Tree, said the brand “performed well against a tough market backdrop”, with it seeing a strong improvement in the UK and Europe “as the summer belatedly arrived”.

“We’re optimistic of an acceleration of growth across the second half of the year and have seen a much more positive trading performance in July and August.”

Fever-Tree shares were down by nearly a 10th in early Thursday trading.