The company expects higher glass costs to have a significant impact this year, resulting in price increases for consumers.
Fever-Tree, a premium manufacturer of tonics, intends to increase prices as it continues to deal with a rise in expenses.
The company, which had previously warned of a significant strain on its profit margins, made the announcement while reporting a decline in earnings for its most recent fiscal year.
One of the main deterrents has been a rise in the price of glass bottles, but the company hoped that a rise in US mixer production in the coming months would partially offset this.
The bottle issues are a result of higher energy and commodity costs that have increased production and packaging expenses.
It is believed that Fever-Tree’s range, which is priced at the premium end of the market, has already been increased in price due to market pressures, thereby contributing to the cost of living crisis.
The company, which opened its first bar in 2021, reported a full-year profit before taxes of £31 million for 2022, down from £55.6 million in 2021.
At £344.3m, revenue was 11% higher than the previous year’s level. The stock price increased by more than 6%, while dividends increased by 2%.
Chris Daly, chief executive officer of the Chartered Institute of Marketing, commented on the company’s performance: “Difficulties in the supply chain have given competitors an advantage in offering lower-priced alternatives, so Fever-Tree has struggled to retain consumers seeking budget-friendly options.
“In order to regain its vitality, Fever-Tree must realign its marketing strategy to respond to the unpredictability of the market while remaining true to its identity.
To regain its competitive edge, the brand must now remain vigilant in its monitoring of shifting consumer trends and broaden its appeal to a broader demographic.
