Premium carbonated mixers marvel Fevertree Drinks (FEVR:AIM) is setting up a US office and intends to directly manage its distribution network across the pond in 2018.
The move demonstrates the scope of the growth opportunity in, and management’s ambitions for, the vast American market.
The high-end tonic water, ginger ale and cola supplier has also appointed seasoned drinks brand specialist Charles Gibb (pictured below) as its North American CEO, well-received news which helps the high-flying shares fizz 22p higher to £19.62.
UPSIDE STATESIDE
Amazingly, ‘Fever-Tree’ only launched in North America a decade ago. Yet thanks to the sheer tastiness of its tipples infused with the highest quality ingredients, the brand has swiftly become the number one premium mixer offering in the USA.
This explains the excitement surrounding the £2.24bn cap’s announcement of a change to its sales and distribution arrangements in the USA.
Brands of Britain (BoB) has acted as its agent in the US, successfully managing Fevertree’s relationships with key distributors and retailers and helping Fevertree establish a solid presence in both channels.
TAKING THE NEXT STEP
Now though, CEO Tim Warrillow (pictured left, below) believes the time is right for Fevertree to directly manage its distribution network across the pond. Fevertree has therefore served notice to BoB that following a handover during the second quarter of 2018, it will directly manage the current distribution network across the pond thereafter.
‘Today's announcement is the next step forward, signalling Fever-Tree's commitment to and focus on the North American market,’ says the AIM darling.
Warrillow himself enthuses: ‘The North American premium mixer market is still at a relatively early stage but the trend towards spirits premiumisation and the increasing focus on simple long drink mixability is accelerating and represents a significant opportunity for Fever-Tree, as the pioneer of the premium mixers segment.’
GIBB’S GROWTH QUEST
Gibb certainly has the credentials for the growth quest ahead, being a former mover and shaker at Moët Hennessy, Diageo (DGE) and Bacardi.
He was recruited as Global Strategy Director in August of this year and in his newly created role, will spearhead Fevertree’s operations across North America.
For the past nine years, he served as CEO of Belvedere Vodka, a division of luxury leader LVMH, where he was responsible for the brand’s significant international expansion.
For the current calendar year, Mallard forecasts a surge in taxable profits to £54.5m (2016: £35m), ahead of £55.9m and 60.4m in 2018 and 2019 respectively.
Mallard’s forecasts were upgraded (again) following a tasty trading update last month, where Fevertree said 2017 profits would be ‘materially ahead’ of already-upgraded market expectations.
