Fever-Tree, the British producer of tonic water and other non-alcoholic mixers, has taken a hit from pandemic-related supply issues and is now posting a less-than-favorable outlook on profits going into the second half of 2022.
Based in the United Kingdom, the brand shared its reduced profit forecast on Friday. Earlier this year, the company predicted annual profits of £63 million to £66 million ($75.40 million to $78.99 million). Fever-Tree has since adjusted its forecast by almost half to £37.5 million to £45 million ($44.33 million to $53.19 million). The company’s shares dropped by 30 percent following the July 15 announcement of the lowered profits forecast.
Glass shortages, as well as related price increases for the packaging, heavily influenced the profit forecast, according to Reuters. The news site reports that Fever-Tree enjoys abundant interest from American consumers; in fact, the brand of mixers is now more popular in the United States than in the United Kingdom. While that popularity means increased sales in the U.S., cross-Atlantic shipping costs have further complicated the company’s bottom line.
The mixer brand’s stock has gradually slid downward since the start of the year, hitting a nearly 69 percent decrease year-to-date. Stock was valued at $37.30 at the start of the year. By mid-July, it clocked in at $11.58.
Fever-Tree’s economic downturn of the past year certainly isn’t an isolated case in the beverage alcohol space — other brands, including independent craft brewers, have felt the burn from supply chain disruptions.