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Fevertree’s stock bubbles up as Molson Coors takes a stake

Fevertree Drinks saw its shares fizz upwards by nearly 24% after the revelation that North American beer behemoth Molson Coors has secured an 8.5% stake in the British premium mixer brand.

The $88 million (£69 million) deal not only marks a strategic equity play but also hands Molson Coors the exclusive rights to distribute and market Fevertree’s portfolio across the United States.

A tonic for Fevertree’s American expansion ambitions, this partnership has been lauded as a “game changer” by analysts at Jefferies. While 2025 is set to be a transitional year, with the company guiding for low single-digit revenue growth — implying a 3% cut to consensus expectations (£395m) and PHe (£400m) — expectations of double-digit gains by 2026 suggest that Fevertree is primed to effervesce in the U.S. market, fuelled by Molson Coors’ extensive distribution muscle.

The rise of premium mixers

It’s a heady moment for Fevertree, whose revenue mix already sees over a third sourced from the US. The American cocktail culture, now shifting towards premiumisation and craft-led beverages, presents fertile ground for the British brand’s tonics, ginger beers and flavoured sodas. The rise of no and low alcohol drinks has also proved fortuitous, as discerning drinkers increasingly seek quality over quantity — a shift indicated by last year’s $4.2 billion (£3.3 billion) acquisition of Britvic by Danish brewer Carlsberg.

The rationale for Molson Coors is evident. With beer sales stagnating and inflationary pressures squeezing volume, the brewer has been broadening its non-alcoholic portfolio, having recently acquired a controlling stake in ZOA Energy. “It fits squarely into the non-alcoholic space,” confirmed Molson Coors CEO Gavin Hattersley, who envisions Fevertree permeating its vast network of liquor stores, supermarkets, restaurants, and bars across the U.S.

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A toast to the shareholders

Fevertree intends to return proceeds from the stake sale — amounting to £71m — to shareholders via a buyback, a move likely to be welcomed by investors buoyed by yesterday’s (30/01/2025) meteoric share price surge.

Peel Hunt analysts, though cautiously optimistic, acknowledge the deal’s transformative potential. “It looks like an interesting deal for Fevertree as it gets to leverage the Molson Coors platform both on production and distribution,” they noted in a report. The firm has placed its rating Under Review (previously reduced) with a last reported stock price of 658p.

FY revenue came in at £368m, 1.2% below revised expectations of £373m, and adjusted EBITDA is expected to be in line with consensus at £51m.

Regional performance

While the US remains Fevertree’s biggest growth market, generating £128m in revenue with 9% constant currency growth, the UK struggled with a 4% decline, and European sales fell 7.8%.

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