Against a backdrop of rising high-end mixer market competition, a cost-of-living crisis and inflationary pressures, Fevertree Drinks’ (FEVR:AIM) shares have fallen almost 50% over five years.

So the premium carbonated mixers supplier needs to stir up renewed confidence in its global growth and margin expansion prospects when it delivers annual results on 26 March. News of a strong start to 2024 would be just the tonic for investors.

Back in January, Fevertree disappointed the market with a year-to-December 2023 sales miss due to weaker than expected performances across the US, Europe and Rest of the World regions and with growth slowing in the second half.

The tonic, ginger beer and Sicilian lemonade seller guided to adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) for 2023 of circa £30 million, at the bottom end of the £30 million to £36 million guidance range, and lowered its 2024 growth guidance. But the brand continues to make good progress, notably in the US, and the increasing diversification of its drinks portfolio means Fevertree is well placed to gain market share should sentiment improve.

Management will need to reiterate its confidence in delivering a ‘significant improvement’ in gross margin this year, underpinned by new glass contracts with fully hedged energy pricing, lower Trans-Atlantic freight rates, ongoing cost-saving initiatives and price increases. Chair Domenic De Lorenzo clearly has a thirst for the Fevertree growth story, having recently (25 January) purchased £438,000 worth of stock. 

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