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Lockdown drinkers help steady sales at Fever-tree

By Abigail Townsend

Date: Thursday 04 Jun 2020

Lockdown drinkers help steady sales at Fever-tree

(Sharecast News) - Fever-tree has reported a surge in demand as locked down drinkers swapped the pub for the home, the specialist tonic firm said on Thursday, helping to mitigate a slump in on-trade sales.
Typically representing half of UK revenue, on-trade sales continued to be "severely impacted" by the lockdown, which has shut bars, restaurants and other leisure venues.

However, off-trade sales spiked 24% year-on-year in the first full month of lockdown, Fever-tree said, with "continued positive momentum since", as more people drunk at home. The Aim-listed firm added that the core tonic range had performed particularly well.

Overseas, the on-trade in the US - which normally contributes around 70% of revenues - has been "severely impacted" since the lockdown. But off-trade has been "extremely strong".

A similar pattern was seen in Europe. In the north, where demand is normally weighted towards the off-trade, trading was "robust". Southern Europe, however, is more reliant on the on-trade.

Addressing investors at the annual general meeting, chairman Bill Ronald said: "Although we have been impacted by the Covid-19 crisis, we are well positioned to manage our way through the current situation.

"While the on-trade remains fully or partially closed across many of our regions, the group's performance across the off trade continues to be very encouraging. Management remain focused on delivery our long-term strategy and we are confident the group will be well place once the current period of uncertainty ends."

Looking ahead, Fever-tree said: "Given the uncertainty and dynamic nature of the situation, it continues to be hard to predict how sales will evolve both during and as we emerge from the lockdown period.

"The restrictions and the pace at which the on-trade re-opens will vary between regions, but it is becoming increasingly likely th at this process will be gradual and cautious."

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