4th Jun 2020 10:03
(Alliance News) - Fevertree Drinks PLC on Thursday said that while bars and pubs remain shuttered due to Covid-19 lockdowns, off-trade sales surged, including a striking jump in the US.
In the UK off-trade sales - meaning in shops and supermarkets - jumped 24% annually in the first full-month of lockdown, the carbonated drinks maker said, adding that the "positive momentum" has continued since.
"The core tonic range has performed particularly well, and there has also been notable growth in the convenience channel as consumers increasingly supplement or substitute their trips to large grocery stores," Fevertree said.
In the UK, on-trade sales - pubs, bars and restaurants - usually represent 50% of its revenue.
In the US however, Fevertree is "naturally weighted" to off-trade, which is typically about 70% of its revenue in that country.
Fevertree said: "Since the start of lockdown, while on-trade sales have been severely impacted, off-trade sales have grown extremely strongly."
Nielsen data, which Fevertree said covers just under half of its off-trade sales in the US, reported it had a 98% year-on-year jump in the four weeks to April 18 and soared 96% in the four weeks to May 16.
"The group's US pricing and format optimisation has been very well-received by distributors and retailers, with implementation beginning to be seen on-shelf between March and June 2020," Fevertree said.
Elsewhere, trading in northern Europe has been "robust", because like the US it is more weighted towards off-trade. The same could not be said about southern Europe, which was more hurt by lockdown measures.
"While on-trade challenges have also been evident across the rest of the world, we are delivering strong off-trade sales and continued distribution gains, most notably in Australia and Canada," the Fevertree added.
"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 easing of restrictions and the pace at which the on-trade re-opens will vary between regions, but it is becoming increasingly likely that this process will be gradual and cautious, with social distancing measures remaining in place for some time."
Shares in the company were 0.8% higher at 2,096.00 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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