Shares in premium mixer-maker Feverree Drinks (FEVR:AIM) hit a three-month low of £23.30, down 5%, after data from market research firm Nielsen points to a slowdown in sales in the company’s core UK market.
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Every month Nielsen releases sales figures for the carbonated soft drinks (CSD) market for most European countries and the latest data, which Shares has seen, shows UK sales of Fevertree products for the four weeks to May 19 falling by nearly 6% compared with last year.
There are several factors behind the fall. Last year, sales for the same period grew by a staggering 89% thanks to the unseasonally hot weather and the Royal Wedding celebrations, which would undoubtedly have seen the number of G&Ts consumed rise, so the comparison was always going to be tough.
Also, sales growth has been slowing for a while, which should be no surprise given how fast the company has been growing historically, and the current poor weather not just in the UK but across Europe means that growth is likely to slow further.
Another factor is discounting by Fevertree’s biggest rival, Schweppes, which has finally got its act together and is heavily promoting its ‘heritage’ brand 1783 in UK supermarkets to try and wrest back market share.
As is customary the company is staying tight-lipped about sales until it updates the market next month, when investors can expect to hear not just about the UK market and the exciting launch of pre-mixed G&Ts, which is a fast-growing and high-margin product area, but also the US market which is more than 10 times the size of the UK and has the potential to change the game for Fevertree.
Disclaimer: The writer owns shares in Fevertree
