Low calorie mixers just the tonic for Fever-Tree

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Strong demand for low calorie tonic has helped premium mixer maker Fever-Tree toast a surge in annual sales and profits.

The drinks firm said it would extend its low calorie mixers across all its major flavours over 2018 after seeing sales of its increasingly popular light tonic more than double, now accounting for 31% of off-trade sales.

This helped pre-tax profits jump 65% higher to £56.4 million in 2017 on sales up 66% to £170.2 million.

Tim Warrillow, co-founder and chief executive of Fever-Tree, said: “It has been a year of significant progress for Fever-Tree.

“We have continued to see strong growth across all our regions, with the UK once again delivering an exceptional performance culminating in Fever-Tree ending the year as the leading mixer brand at UK retail.”

The group added it had seen an “encouraging” start to 2018.

Annual results showed sales across the UK leaped 96% higher, thanks in part to an impressive Christmas performance, although it said all regions globally showed “impressive” growth and it plans to focus on expanding in the US after launching an operation there in December.

Sales in the US – its second largest single market – rose 36% on a constant currency basis, while Continental Europe revenues rose 37%.

As well as boosting its low calorie ranges, Fever-Tree also recently expanded its dark spirits mixing range, with the launch of Smoky Ginger Ale and Spiced Orange Ginger Ale, ahead of what it believes will be a revival in demand for dark tipples.

It said it believes that “in much the same way we approached the gin category over 10 years ago, an exciting opportunity exists to work alongside these brands to reinvigorate the dark spirits category”.

Shares fell 4% despite the annual profit cheer.

Analyst Phil Carroll, at Shore Capital, said: “The key for us going forward is the opportunity in the US, which has significant potential given its maturity profile in terms of premiumisation compared to the UK but is also quite a complex market to compete in.”

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