Fever-Tree and Molson Coors forge US strategic partnership

LONDON - Fever-Tree, a leading producer of premium mixers, has entered into a strategic partnership with Molson Coors (NYSE:TAP), one of the world’s largest beverage companies, to bolster its growth in the United States. This alliance includes Molson Coors acquiring an 8.5% stake in Fever-Tree for £71.0 million, which will be returned to Fever-Tree shareholders through a share buyback program starting in February 2025.

The collaboration, effective February 1, 2025, grants Molson Coors exclusive rights to sell, distribute, and eventually produce Fever-Tree products in the US. Fever-Tree has seen substantial growth in the US since its market entry in 2008, becoming the top brand in the tonic and ginger beer categories. The partnership aims to leverage Molson Coors’ distribution network and sales expertise to further expand Fever-Tree’s market presence.

Tim Warrillow, CEO of Fever-Tree, emphasized the transformative nature of the deal, noting the brand’s success in the US and the vast opportunity that lies ahead. He expressed confidence that Molson Coors’ national network and strategic ambition make them the ideal partner for Fever-Tree’s next growth phase in the US.

Molson Coors CEO Gavin Hattersley echoed this sentiment, highlighting the partnership as a significant step in their journey to become a total-beverage company. The agreement is expected to enhance Molson Coors’ non-alcoholic offerings portfolio and capitalize on the existing demand from distributors and customers for products like Fever-Tree.

The partnership also involves a profit-sharing arrangement and a commitment to significant marketing investment to bolster brand awareness. Additionally, Molson Coors will take over Fever-Tree’s existing US production relationships in anticipation of onshoring US production, which is expected to drive operational efficiencies.

In terms of financial performance, Fever-Tree reported a 4% year-on-year global brand growth at constant currency, with strong momentum in the US market. The company anticipates a strong uplift in Adjusted EBITDA for the full year, aligning with expectations.

The strategic partnership is set to enhance the quality of Fever-Tree’s earnings and reduce the company’s US working capital requirements, thereby improving cash generation. This financial flexibility will support global brand growth and potential further shareholder distributions.

The information for this article is based on a press release statement issued by Fever-Tree.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.