Fever-Tree’s US expansion plans will not be affected by US tariffs as the impact will eventually be mitigated by the on-shoring of production inside the country, the business has said.
Fever-Tree sold an 8.5% stake to Molson Coors in January as part of a strategic partnership to allow the brewer to produce, distribute, and sell its drinks across the US.
Tim Warrillow, co-founder and CEO, called it a “transformational step” at the time that would “take the Fever-Tree brand to the next level across the US”.
In a trading update ahead of its AGM on Thursday, Fever-Tree said the recent introduction of a 10% tariff on imports into the US will be shared equally between Fever-Tree and Molson Coors.
“Importantly, tariffs do not present a structural headwind for the business as, over time, they will be materially mitigated by a combination of on-shored US production and the profit guarantee mechanism.”
Fever-Tree is looking to the US to reignite its growth after sales in the UK fell 4% last year, reflecting a subdued spirits backdrop.
The business said “good progress” had been made since the partnership was announced and it is now working through the “key months of transition” into Molson Coors’ distribution network. “It is proceeding as expected so far.”
The business reiterated its guidance for the year of “low-single-digit” revenue growth at constant currency and around 12% adjusted EBITDA.
Fever-Tree’s North America CEO, Charles Gibb, will now step down following the successful transition of its US unit into Molson Coors.
He will be succeeded by US chief commercial officer Judd Hausner, who has been with the US business since it was established in 2018.
He previously worked extensively across the US beer network “and therefore has the ideal blend of experience to manage the partnership locally”, Fever-Tree said.
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