Fever-Tree aims to expand outreach through acquisition of Powell & Mahoney
US – British producer of premium drink mixers, Fever-Tree, has acquired US non-carbonated cocktail mixer brand, Powell & Mahoney, for US$5.9 million.
The tonic maker said the acquisition of the Massachusetts-based brand is part of an effort to extend its footprint in North America and broaden bottling capacity in non-carbonated mixers.
Charles Gibb, CEO of North America at Fever-Tree, said: “Alongside extending our range of carbonated mixers, we are also extending into the significant opportunity within the non-carbonated cocktail mixer category in the US.
This segment of the mixer market is the same size as the tonic water and ginger beer markets combined and is growing and preimmunizing at pace.”
He added that with the acquisition of Powell & Mahoney, a premium non-carbonated US cocktaixer brand, with national retail listings and an asset-light business model with an established production partner, the company believes will provide an ideal platform to accelerate its entry into this exciting adjacent category.
Higher input and shipping costs eat into Fever-Tree’s margins
Meanwhile, Fever-Tree has posted a 30 percent fall in first-half profits despite rising sales, citing a higher rise in input such as glass and shipping costs eating into margins.
The company said the availability of glass will continue to be restricted in the second half and is expected to hurt revenues, but it is working with suppliers to secure glass stock for next year.
The London-based, upmarket tonic maker made a pre-tax profit of £17.6million(US$17.54m) in the six months to the end of June, down from £25.3million(US$25.22m) a year ago.
The company noted that the demand for its posh tonic waters and ginger ales remained ‘strong’ in the period, especially in the US and Southern Europe, helping revenues soar 14 percent to £160million(US$159.48m).
Sales in Europe jumped 27 percent and US sales rose 11 percent, while in the UK, which contributes to a third of all revenues, sales growth was lower at 6 percent.
Chief executive Tim Warrillow commented that Fever-Tree has delivered a robust revenue performance in the first half of 2022, with a particularly strong performance in Europe as the On-Trade recovered.
Alongside driving topline growth, Warrillow added that the business remains extremely focused on mitigating the industry-wide cost impacts, and whilst we are still highly mindful of the extreme volatility impacting energy-related and logistics costs.
Nevertheless, the group stuck to its full-year profit expectations of between £37.5million to £45million(US$37.38m-US$44.85m), expecting to see a gradual decrease in its exposure to the worsening macroeconomic conditions over the medium term.
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