The demand for Fever-Tree products remains high in the United Kingdom.
Fever-Tree recently warned that its growth rate might slow down due to bad weather in the United Kingdom.
Wet weather starting earlier this summer had a negative affected Fever-Tree’s trade arrangements negatively.
Nevertheless, Fever-Tree reported an increase in its revenue from £117.3m to £104.2m in 2019. Fever-Tree’s revenue went up 13% in 2019.
The company achieved growth across all of its four regions.
Fever-Tree strengthened trade relations with the United States which led to further growth in revenue.
The company’s global reputation improved amid increasing popularity of Fever-Tree products in Australia and Canada.
Increasing demand for upmarket gin creates further opportunities for Fever-Tree to grow.
Originating in India, gin and tonic continues to be one of the most popular cocktails in the world.
The recent growth of Stranger & Sons, an Indian upmarket gin brand, creates further growth opportunities for Fever-Tree.
Tonic has the advantage of being a complimentary good. As demand for gin increases, so does the demand for tonic.
Increase in Demand
A recent increase in global demand for gin opens up opportunities for those who wish to invest in alcoholic beverages.
Due to the increasing popularity of gin, the list of popular brands is getting longer.
The United Kingdom is one of the primary suppliers of gin. It is home to popular brands such as Bombay Sapphire, Sikkim, Jodhpur, Opihr and Gin Wala.
While gin originated in India, it has taken time for home grown brands to become popular in the global market due to the competitive nature of the sector.
Stranger & Sons
A new company is set to change the global role of home-grown gin in India.
Stranger & Sons bottles started to appear in bars in and outside of India.
Local availability of botanical plants as well as spices creates an advantage for Stranger & Sons.
Stranger & Sons reduces transport costs and saves time by using locally grown ingredients.
Furthermore, the company created employment opportunities in the region by hiring local employees.
Global demand for Stranger & Sons’ products has been increasing.
Stranger & Sons’ takes pride in the uniqueness of its upmarket gin as it includes local spices special to India.
According to Drinks Market Analysis, premium bottles produced by Stranger & Sons have an annual growth rate of 20%.
Production is likely to grow due to increasing global demand.
However, the company faces multiple challenges.
According to a research conducted by the Asian Development Bank, 21.9% of India’s population lives below the poverty line.
The risk of selling an upmarket product in a country with such a high poverty rate is high.
Stranger & Sons can overcome this challenge by diversifying its income to reduce dependency on local customers.
A way to accomplish this is to become a prominent figure in the global market.
The Economist predicts a 5% annual decline in the overall gin sales in India.
Stranger & Sons charges approximately $40 for a bottle of its classic gin.
Furthermore, some regions in India have high taxes on alcohol.
Four states in India are completely dry, limiting the demand for gin in India.
The company has potential for growth despite challenges posed by external factors in India.
Global market for gin is competitive. India is the 55th global seller of gin in the world.
If Stranger & Sons wants to improve its presence in the market, it will need to increase its global supply of gin.
Nevertheless, it is relieving to know that new sources of upmarket gin are appearing in the global market.
Post- Brexit Supply
Wine and Spirits Trade Association warns consumers that a no deal Brexit might cause a gin shortage in the United Kingdom.
Distillers in the United Kingdom rely on shipments from the European Union.
In a time of Brexit uncertainty, it might be advantageous to search for alternative options.
Growing production of upmarket gin in India can be the answer to a possible lack of supply amid Brexit.