What's going on?

Fevertree, the British maker of premium drink mixers and former stock market darling, issued a decidedly flat trading update on Monday � causing its shares to lose a quarter of their fizz.

What does this mean?

Fevertree � named after the all-natural ingredient in its flagship tonic waters � warned on slowing sales for the second time in three months: the company now thinks revenue grew 10% last year, significantly watered down from 40% in 2018. Making matters worse, Fevertree expects to swallow a 5% drop in 2019 profit. Investors were left with a�nasty taste in their mouths � and the broken bough sent the drinks firm�s once-lofty share price crashing a record 27%.


Fevertree�s home market was one source of blame, with UK consumers splashing out less than expected over the holiday season. But feverish attempts to increase brand awareness overseas saw heavy spending and price promotions help turn total profit slimline. In the US, sales grew 33% last year � but in the absence of a UK-style gin boom boosting demand for Fevertree�s tonics, these continued to make up a bitterly small slice of overall revenue.

Why should I care?

The bigger picture: Retail on the rocks.

The mixer magnate�s British malaise � which Fevertree expects to continue during the first half of 2020 � mirrors the experience of other consumer companies. Superdry, John Lewis, Marks & Spencer, and Morrisons have all warned of slowing sales this month, and it�s no coincidence that data out last week showed retail sales in the UK suffering their longest spell of no growth on record.


For markets: In the mixer.

Fevertree�s shares have now fallen more than 60% from their all-time high, but there may be a silver lining. Prior to Monday, the company�s stock price sat at Apple-like levels relative to its earnings. Now that this disparity has evaporated faster than your friend when it�s their round at the bar, Fevertree may be an attractive takeover target for one of its big beverage rivals…