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"Don’t expect triple-digit growth to continue" - Fever-Tree CEO

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Fever-Tree's CEO has said premium mixers are bringing new consumers into spirits, but warned that his company's rampant growth can't continue indefinitely.

Fever-Tree has delivered four consecutive half-year periods of triple-digit growth

Fever-Tree has delivered four consecutive half-year periods of triple-digit growth

Speaking to just-drinks today, Tim Warrillow said that almost one-fifth of its UK consumers in the first half of the year were new to the spirits category, proving that mixers have the potential to grow further. However, Warrillow admitted that Fever-Tree's performance over the past two years, including four consecutive half-year periods of triple-digit growth, will one day have to stop.

"We are cautioning analysts, to say please don't expect triple growth to continue," Warrillow said. "The reality is, because of the size and scale of it, the numbers can't continue at that pace."

In H1 results today, Fever-Tree more than doubled net profits as sales jumped by 77%. The gains followed profits and sales leaps in FY 2016 and 2015 and continued a share spike for Fever-Tree that has seen its stock increase 11-fold since January 2015. 

The growth has sparked interest from analysts, who suggest big spirits companies including Diageo may be attracted to acquiring Fever-Tree. Warrillow, however, indicated that there are no plans to sell Fever-Tree.

"We're not planning on changing course," he said. "We see lots of opportunity ahead on all continents we are operating on."

Warrillow said his team were in "good spirits" after the results, in which Fever-Tree doubled its value share of the UK mixer category from 15% to 30%. He also said Brexit is unlikely to harm growth for the company as it won't affect UK drinking habits.

"[Mixed drinks are] a low-cost luxury," Warrillow said. "We started in 2005, before we knew it we were in a significant recession. We saw first hand then that these low-cost luxuries were not negatively affected. We heard people say many times, 'I'm damned if I'm not going to have a good drink'. We can't see why a downturn would have a significant effect on us."

Meanwhile, Warrillow said Fever-Tree will continue to look for opportunities in individual markets for exclusive flavours and formats, similar to the recent launch of a clementine and cinnamon tonic in Belgium and the Netherlands.

Hinting at new launches, including in Asia, Warrillow said the company will have "more to talk about on that subject" next year.

"The way to drive dark spirits is to make them accessible. And accessible means mixed" - Fever-Tree Interview from March 2017


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