Fever-Tree, the supplier of premium carbonated mixers, and Molson Coors, one of the world’s largest beverage companies, have entered into a long-term strategic partnership for the exclusive sales, distribution and production of the Fever-Tree brand in the US.
Underpinning the partnership, Molson Coors will acquire an 8.5% shareholding in Fevertree Drinks plc for cash consideration of £71m, resulting in Molson Coors becoming Fever-Tree’s second largest shareholder. Fever-Tree intends to return the proceeds of the sale to shareholders via a share buyback programme of £71m.
Starting February 1, Molson Coors will assume exclusive commercialization rights to Fever-Tree’s lineup of tonics, ginger beers, cocktail mixers and more in the US and will be responsible for co-manufactured production, marketing, sales and distribution of the brand in the US.
As part of this transition, Molson Coors will assume Fever-Tree’s existing US production relationships prior to managing the onshoring of US production. To enable the transition Molson Coors will acquire Fever-Tree’s local US operating entity, Fevertree USA Inc, for $23.9m in cash.
Fever-Tree was established in the UK in 2004 and first entered the US market in 2008.
Tim Warrillow, co-founder and CEO of Fever-Tree, said: “Today’s announcement marks a transformational step for the Fever-Tree brand in the US. Thanks to the superb work of our US team, we have seen Fever-Tree become the number one brand in both the tonic and ginger beer categories, a remarkable achievement which has redefined the US mixer category amongst consumers and customers alike.
“But what is so exciting is that as the Fever-Tree brand has grown in the US, so has the opportunity ahead of us, reflecting the increasing number of categories and occasions that our products are relevant to.
“With a national network providing significant scale and muscle, alongside its proven track record, supply chain expertise and clearly stated strategic desire to drive the future of their business beyond beer, Molson Coors are the ideal long-term partner to take the Fever-Tree brand to the next level across the US. This partnership will be fuelled by a step change in marketing investment to take advantage of the highly compelling opportunity ahead.”
Gavin Hattersley, Chief Executive Officer of Molson Coors Beverage Company, said: “Our strategic partnership with Fever-Tree in the U.S. is a meaningful step in Molson Coors’ journey to becoming a total-beverage company with a winning portfolio of drinks for a wide variety of consumer occasions. We’ve made progress here, and today we are building on that progress in a significant way with Fever-Tree as the latest and largest non-alc brand to join our portfolio.
“The U.S. is our biggest global market by revenue, and the same is true for Fever-Tree, so we believe this partnership provides ample opportunity for our teams to build on the strong success Fever-Tree has achieved to date. Our distributors and customers have been asking for a brand just like Fever-Tree from us, and by leveraging the scale, strong relationships and expertise of our team at Molson Coors. I’m confident in the road ahead for Fever-Tree as part of Molson Coors’ growing set of non-alc offerings in the U.S.”