Fevertree has shrugged off trade tariff concerns after striking a deal with a major partner, as the UK group continues to grow sales in the US market.
In a trading update ahead of its annual general meeting on Thursday, the company said it was trading in line with forecasts, adding that it was making ‘good progress’ in the US following its partnership with Molson Coors.
Fevertree noted strong momentum across the US, with brand performance described as ‘well ahead of the competition’.
The firm’s ginger beer and ginger ale are proving a hit with consumers in the US, which is now Fevertree’s biggest market, a spokesperson told This is Money.
Its Bloody Mary mixer and its espresso martini cocktail mixer are also making ‘great gains’ across the US, Fevertree said.
The company said Trump’s tariffs ‘do not present a structural headwind’ for the business, as ‘over time, they will be materially mitigated by a combination of on-shored US production and the profit guarantee mechanism’.
Fevertree said it would equally split the costs of the 10 per cent tariff to be imposed on British imports to the US with brewer Molson Coors.
Splitting the cost: Fevertree said it would equally split costs of the 10% Trump tariff with Molson Coors
The British company, known for its premium cocktail mixers, counts the US as its largest market.
Fevertree said the transition of its distribution to Molson Coors’ network of distributors was ‘underway’.
It claimed both businesses ‘remain highly aligned and excited about the significant growth opportunity ahead’.
In January, Molson Coors took a stake in Fevertree, securing exclusive rights to distribute and market the firm’s cocktail mixers and tonic waters in the US.
The tonic and mixer maker forecast low single-digit revenue growth and an adjusted EBITDA margin of around 12 per cent for its financial year.
Fevertree said its performance across Britain remained strong, seeing it retain its ‘number one position’ and enjoying growth in alcoholic and non-alcoholic settings.
As part of its £10 million share buyback announced earlier this year, Fevertree said it had returned around £42.5million to shareholders to date.
The business said on Thursday: ‘The group’s capital allocation framework remains unchanged.’
It added: ‘We intend to retain sufficient cash for investment opportunities, primarily in operational expenditure, including increased marketing spend in growth regions.
‘We are also vigilant regarding M&A opportunities that would further assist with the delivery of our strategy.’
Fevertree also announced that Charles Gibb, its North America chief executive, would step down and be succeeded by Judd Hausner.
Fevertree shares fell 0.68 per cent or 6.00p to 878.00p on Thursday, having fallen over 18 per cent in the last year.
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