The following content originally appeared in issue 132 of Beverage Innovation, which you can subscribe to here.
Founded by Charles Rolls and Tim Warrillow in 2005 and based in Southwest London, Fever-Tree is a producer of premium drink mixers. The company makes a variety of products including tonic water, ginger beer and lemonade and has had an astounding year with sales of £24 million for the first half of 2015. Claire Phoenix investigates the emerging category of craft tonic waters
What was the inspiration for the company launch in 2005?
The idea for Fever-Tree was born from our shared opinion of the mixer market and the poor choice available for consumers. The premium and craft spirit movement had been steadily growing yet in stark contrast, the mixer category had remained the preserve of one large multinational brand who used cheap ingredients as a way of cutting costs. Mixers had become a commoditised group made up of artificial ingredients across the board, including sweeteners, preservatives and colourings. We set out to change this by putting the very best quality ingredients back into mixers and, in doing so, pioneered a new premium mixer category.
Our journey to create the best tasting, all natural tonic water initially started with extensive research into quinine sources, dating as far back as 1620. Endless hours in the British Library, led us to a plantation of Cinchona Ledgeriana trees (fever trees) on the Rwanda-Congo border, which Tim later went out to visit. After 18 months of development and numerous recipe iterations, we were happy with the result and the first bottle of Fever-Tree Indian Tonic Water was produced in 2005.
What are your latest figures and what do you think is the motivation behind your success?
At our Interim Results, announced in July 2015, we reported revenues of £24.1m for the first half of our financial year (up 62% from H1 2014).
As awareness of the brand continues to grow, and as consumer’s understanding of the premium mixer category gains momentum we are constantly motivated by huge potential both in the UK and internationally. With the global trend of premiumisation high on the agenda of spirit companies, we will continue to develop and drive innovation in the category that we created.
Floating on the London AIM stock exchange is quite some achievement – what led to this and what has it taken to get this far?
We had enjoyed an excellent relationship with our private equity backers but we all agreed that a stock market listing was the next step in the Fever-Tree story. We received a very positive reaction amongst institutional investors at the time of our IPO amid difficult market conditions. Our share price performance since listing has been very encouraging, reflecting the progress the Company has made and performance we have delivered and we have a committed, blue chip, investor base. Above all, being a publicly listed company has brought us further brand recognition.
What were the first products launched and the core of your portfolio?
Fever-Tree Indian Tonic Water was the inaugural launch in 2005, and it remains the figurehead of the full range even now, 10 years on. Since then, we’ve launched between one to two new products or formats each year and there are now 13 mixers in the Fever-Tree range. Notably, in 2007 we launched our Naturally Light Tonic water – the world’s first all natural, low calorie tonic water, that still tastes delicious despite containing far fewer calories. It contains natural fruit sugar, fructose and all ingredients are natural:
What are the most recent additions and how are these doing?
With the gin renaissance currently taking place in the UK and parts of Europe, our flavoured tonic range has become very popular with consumers and has helped reinforce our position as the tonic and mixer experts. Our Elderflower, Mediterranean and Lemon Tonics all contain the same quinine sourced from the Congo, but they also incorporate other unique citrus and floral botanicals designed to compliment the vast array of gins available. For instance the additional ingredients in the Mediterranean Tonic are thyme, fresh citrus and rosemary.
Like the tonics, our Ginger Ale and Ginger Beer have also won taste awards around the world and the latter is doing extremely well in the US where there is a current trend for Moscow Mules.
Who did you work with on the label design?
Our labelling was initially designed in house but we have recently worked with B&B Studio to update the branding to give maximum impact on shelf and behind the bar.
I understand you now have a range of mini cans – what format are these and what led to this development?
We launched our Indian and Naturally Light Tonic 150ml cans in the UK in June 2015 as a direct result of consumer demand for Fever-Tree in this particular format. The research we did showed that not only did our existing consumers want the option of buying cans for particular drinking occasions but that there was sizable audience of G&T drinkers who were interested in Fever-Tree but only ever considered buying tonic water in cans. The cans have also opened up the transport sector and are currently served in British Airways lounges and within their First and Business class cabins.
In which countries do you now sell and where can you see future growth?
We are stocked in 58 countries globally with our key markets being the UK, US and several countries in Western Europe. There are still sizeable growth opportunities in these markets as well as in some of our other core territories. With international sales now accounting for c. 70% of our business this is an extremely important part of our future growth. We plan to build on our market leading position (we are four times larger than our closest competitor) and will continue to work closely with premium spirit companies to identify mixability trends across the world.
The ‘Give me Fever’ advertisement for this Christmas must have taken quite some investment – where did it appear and what is the projected outcome?
We launched our first TV advertising campaign late last year after partnering with Channel 4’s Commercial Growth Fund. The Fund offers high growth companies the chance to build their business through TV advertising and Fever-Tree was only the second brand that they have partnered with since its inception earlier last year. The 30-second spot debuted within Channels 4’s London and South regions and ran to the end of the year.
The projected outcome and overall aim of the advert was to reach a broader audience in an engaging way, whilst encouraging our existing audience to feel an emotional connection with our brand. Anecdotally we had some very positive feedback and are currently analysing the overall impact on sales.
What’s next for Fever-Tree in 2016?
We continually strive to lead and innovate the premium mixer category, which means we’re always exploring new options to extend our range and formats. As of yet, there’s nothing we can confirm but there is always something in development.
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