British premium mixer maker Fever Tree opened a new U.S. headquarters today in Brooklyn, N.Y., taking direct control of all U.S. operations and signifying an increased focus on the North American market.
Fever Tree launched in the U.K. in 2005 and first entered the U.S. market in 2007. However, until now the company has relied on importer Brands of Britain to handle its U.S. operations. The new Fever Tree USA organization will be helmed by the company’s North American CEO, Charles Gibb. The former president and CEO of Belvedere Vodka, Gibb joined Fever Tree in 2017, first as global strategist before taking the executive position in December. The U.S. office consists of a 30-person team and will take control of imports, warehousing, distribution, sales, marketing, and consumer relations, the company announced.
Speaking with BevNET this week, Gibb said Fever Tree is highly focused on expanding its U.S. business due to the surging popularity of premium spirits and mixed drinks, particularly in the bar and restaurant channel, but the company sees high growth potential in retail as well.
“The trends here all point to this as a major opportunity,” Gibb told BevNET. “There is the trend of premiumization: people are drinking less but better. Premium spirits are growing and sub-premium spirits are flat or declining. So, there’s a trend toward premiumization, not only in spirits but also everything in life. People are paying much more attention to what they eat, and they’re prepared to pay a little bit more for it.”
Gibb also pointed to a trend toward mixability, with fewer consumers choosing to drink alcoholic beverages straight, as well as the increased consumer demand for clean label ingredients.
Fever Tree will also consider tailoring innovation, including flavor and pack sizes, to U.S. consumers, Gibb said. He pointed to ginger ale as one particular product offered by the company with potential for major growth and new innovation.
According to a Morgan Stanley analysis of the announcement, the U.S. currently accounts for 18 percent of all Fever Tree sales, but could provide roughly 50 percent of its revenue growth through 2022. The market for premium mixers in the U.S. is only half the size of the U.K., but the market for premium spirits is nine times larger. In a survey of U.S. spirits wholesalers conducted by Morgan Stanley analysts, 67 percent said Fever Tree was the best placed premium mixer over the next 12 months.
Gibb said he anticipates rapid growth over the next year. He noted that Fever Tree plans to invest heavily in marketing over the next year, promoting at events and bar and food shows and working with spirits brands, which he called a “key” aspect of the company’s strategy.
“We can really bring the brand to life in a beautiful way,” he said. “It allows us to do more partnerships with spirits brands which is really exciting because we have the opportunity to work together to create joint programs, create joint activation. And of course through having our own sales team we have more and more people active in the marketplace to go sell the Fever Tree story.”