In the first half of 2023, sales increased by 9%, indicating a slowdown compared to the earlier days when sales used to double every two years.
 
In the United States, there was a remarkable 32% sales growth when adjusted for inflation. However, profit margins faced pressure, resulting in a 92% drop in pre-tax profit compared to the previous year's first half.
 
Between 2015 and 2018, Fevertree's stock market valuation soared fivefold due to the gin's popularity. However, since the peak in the summer of 2018, disappointment has set in.
 
Initially, Fevertree's low-capitalization model, relying on third-party production, seemed promising. But during an inflationary period, subcontractor costs increased, leading to an uncontrollable decline in margins.
 
The saturated UK market offered no further growth prospects, necessitating expansion into Europe and the United States. Currently, each of these regions contributes roughly a third of total sales.
 
Management is emphasizing the need for patience. Achieving past record profitability levels while expanding internationally is challenging, given rising costs and ongoing investment in working capital, affecting cash generation.
 
Last year, some members of the management team bought shares when valuations were low (less than three times sales and twenty times EBITDA), which turned out to be a well-timed move. Four years prior, Fevertree's valuations were significantly higher (eighteen times sales and over sixty times EBITDA).