Beverage Industry Shake-Up: Molson Coors Invests in Fevertree Drinks
In a move that sent shockwaves through the beverage industry, Molson Coors has acquired an 8.5% stake in Fevertree Drinks, a British company renowned for its premium cocktail mixers and tonic water. The $88 million deal grants Molson Coors exclusive rights to market Fevertree’s products in the United States, a market that accounts for over a third of Fevertree’s revenue.
A Strategic Partnership
As consumers increasingly opt for non-alcoholic drinks, this partnership is poised to be a game-changer for both companies. Fevertree’s forecast for 2025 indicates low-single-digit growth, followed by double-digit growth in 2026, and a sustained increase in medium-term revenue. Analysts at Jefferies believe that this deal will significantly boost Fevertree’s earnings power.
Molson Coors’ Expansion Plans
Molson Coors, which has been grappling with declining sales volumes in the United States due to higher prices, is eager to expand beyond its traditional beer offerings. The company plans to leverage its vast distribution network to introduce Fevertree’s products to big box stores, restaurants, liquor stores, and bars across the country. CEO Gavin Hattersley emphasized that this partnership aligns perfectly with Molson Coors’ strategy to tap into the growing demand for non-alcoholic beverages.
Fevertree’s Growth Trajectory
Fevertree, known for its high-quality cocktail mixers, tonic water, ginger beers, and flavored sodas, has experienced impressive growth in the United States, with revenue increasing by 12% at constant currency in 2024. The company plans to return the proceeds from the stake sale to shareholders via a share buyback.
Industry Insights
This deal follows Carlsberg’s acquisition of Britvic, a British soft drinks maker, for $4.2 billion last July. As the beverage industry continues to evolve, partnerships like these are likely to become more common. Analysts at Peel Hunt believe that Fevertree will benefit significantly from Molson Coors’ production and distribution capabilities, making this an attractive deal for both parties.
Leave a Reply