Fever Tree Provides Trading Update Ahead Of AGM
Fever Tree provided a trading update prior to its group AGM, which highlights a strong off-trade performance in the first four months of the year.
The mixing drinks producer does expect demand for the off-trade to fall once more restrictions are lifted across its various markets, allowing for the on-trade to resume.
The group maintains that it is "too early to predict the pace of On-Trade recovery this year", but Fever-Tree's brand strength, distribution footprint, and strong relationships with its customers means the group is well-positioned to take advantage of the return of the channel, which represented about 50% of UK revenue pre-COVID.
The re-opening of the channel in the UK and large parts of the U.S. have given the group "renewed optimism for the second half of 2021."
Fever Tree believes that the European on-trade will lag behind significantly as it's anticipated that restrictions will ease more slowly than in the UK and US.
In Australia, where the On-Trade has now been open for a few months, the group has seen a good recovery in suburban areas, with city centre demand taking longer to return.
In the UK, Fever-Tree's off-trade performance has been strong since the start of the year.
Sales in the 13 weeks ending 18 April were up 10.1% year-on-year, lapping the effects of stockpiling seen at the beginning of the first lockdown in March 2020.
In the U.S., sales have continued to perform strongly at the start of 2021, increasing by 38.2% year-on-year in the 12 weeks to 27 March.
In Europe, the group has continued its progress in the off-trade, building on strong sales and value share gains during 2020 across its key markets.
Retailers are looking to benefit from the category's value growth and the premiumisation of the market, working with Fever-Tree and spirit brands to create promotional displays in store to drive these trends further.
Fever Tree finished the update by declaring that trading to date is "in line with the Board's expectations for the full year to 31 December 2021, assuming levels of uncertainty surrounding the pandemic continue to subside."
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