Mix with the best: UK’s Fever-Tree eyes APAC potential with low-calorie range and South Korea launch
Established in 2005, the FTSE listed-firm pioneered the high-end carbonated mixers for alcoholic spirits, and distributes to more than 100 countries worldwide.
In Asia-Pacific, Fever-Tree is currently present in China, Hong Kong, Macau, Taiwan, Mongolia, Japan, Thailand, Vietnam, Philippines, Malaysia, Indonesia, India, Sri Lanka and Singapore.
In Q3 2021, the firm plans to launch in South Korea, hoping to target the soju-tonic market.
Victoire Desvigne, general manager Asia, told FoodNavigator-Asia: “There’s a lot of learning that still needs to be done in terms of premium products in Asia, but it is an exciting market for new products and we're looking forward to continue our growth here.”
According to Fever-Tree’s FY20 preliminary results (to 31 December 2020), the UK remains its largest revenue maker at £103.3m (US$142m) for FY20, followed by Europe at £65.3m (US$90m), US at £58.5m (US$81m), and rest of the world (ROW) which includes Asia-Pacific and Canada at £25m (US$34m).
The ROW region recorded the biggest growth at 58% from FY19. Europe grew 1%, US at 23%, while UK fell 22%.
From these results, the company sees Asia as a region with long-term potential.
This year, it signed a pan-Asia deal with Accor, the largest hotel group in the region.
Desvigne added the firm was focused on building the core range with its distributors: “As a premium brand, we want to position ourselves and introduce the products at the right time.”
One way was through partnerships with spirits companies, which allows Fever-Tree to tap a broader audience.
“Since COVID-19, many premium spirit brands have realised that they need a premium mixer to promote their product, especially with the increasing home consumption and consumers opening up to new drinks combinations.”
"As consumers are experimenting more with different spirits and expanding their drink repertoire, it is an opportunity for us to broaden our portfolio to pair with spirit categories, in a way that really benefits the consumers.”
In Singapore, Fever-Tree recently launched the lower calorie tonic water range, Refreshingly Light with four SKUs.
These were the light variants of its best-selling tonics, including cucumber, elderflower, Indian and Mediterranean.
First launched in the UK in 2018, the range was developed to meet the growing needs of health-conscious consumers globally, according to Desvigne.
“Consumers are increasingly health conscious, but still seeking quality drinks, and it shouldn’t be at the expense of taste.”
The Refreshingly Light range is made from fruit sugars, specifically fructose.
Fever-Tree claims to pioneer the low calorie, low sugar mixers: “When we first launched our Refreshingly Light range, they weren't really any other brands doing low calorie drinks, there were only full sugar or artificially sweetened drinks available,” she said.
R&D took about 2 years: “This is a lot longer than our usual turnaround time, because we had to do a lot of work looking at different ways that we can reduce the amount of sugar in our drinks without compromising on taste,” Desvigne said.
“When you create something with less sugar, it can be harder to achieve a great sensory profile, especially when mixing with spirits.”
“We accomplished this through the use of fruit sugars, which was very unique at the time. By using fruit sugars, we were able to lower the amount used compared to cane sugar, and yet obtain a good sensory profile compared to artificial sweeteners.”
“We will continue to look and understand what our sweetening options are available in the future, but based on our current work, we're confident that fructose is the right sweetener to be using for that range,” Desvigne added.
Fever-Tree sells mainly to hotels, restaurants, bars and cafes as well as retailers, depending on country.
Its on-trade channel typically accounts for about 45% of the company’s revenue, and despite the widespread on-trade closures, strong off-trade performance resulting in a 3% decrease in overall revenue for FY20.
In Singapore, Fever-Tree has a strong retail presence through supermarkets and e-commerce platforms, making up about 50% of the business there.
This helped offset the drop in on-trade sales during the lockdown last year, with Refreshingly Light sales actually quadrupling during this period.
According to Desvigne, countries like Thailand and Japan which were more reliant on the on-trade saw business suffer.
Australia is Fever-Tree’s largest APAC market where sales have increased 100% year-on-year with major retailer listing such as Woolworths.
To tap onto the premiumisation of tonics, gingers and soda to pair with popular spirits, Fever-Tree has also expanded its formats, introducing 500ml bottles to Coles and Woolworths late 2020.
In other markets, the firm launched a new Premium Soda range in the UK, targeted at the vodka category and Sparkling Pink Grapefruit in the US, targeted at the tequila category.
Fever-Tree also commissioned its first US bottling line, based on the West Coast, which began production in December 2020.