Fever-Tree - Tim Warrillow

The following transcript is AI generated.

Victoria Stevens: Hi, I'm Victoria Stevens, and welcome to Stock Exchanges. In my role as a Fund Manager at Liontrust, I have the privilege of meeting some of Britain’s most inspiring entrepreneurs—individuals who have poured their heart and soul into building and running businesses.

In this series, I want to share that privilege with you, our listeners. Today, I am delighted to welcome Tim Warrillow, Chief Executive and Co-Founder of Fever-Tree Drinks. Since its launch two decades ago, Fever-Tree has grown into one of Britain’s most recognizable brands.

The company was founded in the early 2000s when Tim and his business partner, Charles Rolls, spotted a gap in the market. They saw an opportunity to create high-quality, premium tonic water to complement the increasingly popular high-end gins. Since then, Fever-Tree has become the UK’s number one mixer brand by value, expanding its range to include flavored tonics, gingers, sodas, adult soft drinks, and premium cocktail mixers. To illustrate the brand’s breadth, when I search Fever-Tree on my Ocado app, I now get over 50 results.

Alongside product expansion, international growth has been a key driver of Fever-Tree’s success. The brand is now sold in over 90 markets worldwide, and the U.S. has overtaken the UK as its largest revenue segment.

Tim is the quintessential British entrepreneur, and I’m so excited to hear his story today. Tim, thank you so much for joining me.

Tim Warrillow: Thank you, Victoria. It’s a pleasure to be here, and fantastic to welcome you to the Fever-Tree offices.

Victoria Stevens: Absolutely! We’re here in Fever-Tree’s headquarters in Hammersmith, a beautifully converted old school building. You were just telling me how important it is to preserve the company culture—so this feels like the perfect setting for today’s conversation.

To start, Tim, I always like to go right back to the beginning of a person’s career. Did you always know you had an entrepreneurial mindset? Was starting your own business something you envisioned from a young age?

Tim Warrillow: Whether I realized it or not at the time, looking back, it’s no surprise I became an entrepreneur. I grew up in a very entrepreneurial household. My father and uncle co-founded a business focused on insecticides, selling to markets in the Middle East and mosquito-ravaged parts of Africa.

Dinner table conversations were filled with extraordinary tales—my father being chased out of Yemen by someone wielding a machete or accidentally landing in a country during a military coup. As a young boy, these stories left a lasting impression.

My turning point came at university, where I studied business and marketing. Like many students, I took on catering and waitering jobs during holidays. A friend and I spotted an opportunity—we realized so many of our peers were doing the same jobs, so why not rent them out to local catering companies? That small idea turned into a business, and it even expanded to an office in Edinburgh.

It became the subject of my dissertation, and I’ll never forget my tutor’s comment:
"No one’s ever written a dissertation on a business they’ve actually started. I think there’s only one path for you—you’re going to be an entrepreneur."

That experience set the stage for what came next.

Victoria Stevens: What a brilliant story! It sounds like you had entrepreneurial ambitions from a young age.

Now, let’s fast forward a little. After university, you had already launched a business, but at some point, you met Charles Rolls, which I’ve read was a pivotal moment for Fever-Tree. Can you tell us about that first meeting and how your shared vision came together?

Tim Warrillow: Yes, of course. Meeting Charles Rolls was absolutely pivotal to Fever-Tree’s creation.

After university, I was determined to start a business, but I was persuaded to get a proper job first—so I went into advertising for a couple of years. Even then, I was constantly scribbling business plans at night and on weekends. After two years, I finally left to pursue one of those ideas. But there was a problem—I had no money.

To support myself, I took on consulting work, and during that time, I met someone with a fascinating idea—he had registered the old trademarks of the East India Company. If you remember from history, the East India Company was one of the most powerful trading enterprises in history. After the Indian Mutiny, the British government shut it down, and its trademarks lay dormant for over a century.

The man I met had acquired those trademarks and was exploring ways to use them—for products like tea, coffee, spices, and even gemstone trading. But the area that fascinated me most was drinks. The East India Company actually invented IPA (India Pale Ale), tonic water, and was the first to export gin.

As I researched the drinks industry, I kept hearing Charles Rolls’ name. Charles had done something remarkable—he had revived Plymouth Gin, an overlooked, forgotten brand that had been sitting at the bottom of a big spirits company’s portfolio. He bought it, revitalized it, and quickly sold it to another major spirits company.

People in the industry kept saying, "You should contact Charles. He’s looking for his next venture, and you two would get along."

So, I picked up the phone, introduced myself, and we met for a cup of coffee.

We started talking about gin, but Charles immediately ruled it out. He had just poured years into reviving Plymouth Gin, and he didn’t want to compete in the same market.

Instead, our conversation naturally shifted to tonic water. It turned out that we had both been researching the same gap in the market—the fact that while gin was going through a renaissance, tonic hadn’t evolved at all.

Victoria Stevens: That makes perfect sense. The premiumization trend was well underway in spirits, but tonic hadn’t kept up—hence your now-famous slogan!

Tim Warrillow: Exactly. At the time, we could see premiumization happening across spirits, especially in gin. But it wasn’t just gin—premiumization was gaining traction in other spirit categories worldwide.

Big spirit companies were investing heavily in marketing—telling consumers about provenance, ingredients, and craftsmanship. At the same time, cocktail culture was booming. Bartenders were becoming ‘mixologists,’ high-end cocktail bars were opening, and spirits were enjoying an unprecedented resurgence.

Despite all this, tonic water was still controlled by one or two big global brands—and they had done nothing to innovate. They focused on cost-cutting and mass production rather than quality.

It was extraordinary to us that consumers were spending serious money on premium spirits—only to drown them in cheap, artificial mixers. That was the gap we saw.

Victoria Stevens: And that was the core insight behind launching Fever-Tree?

Tim Warrillow: Yes, that realization was the foundation for everything. We saw an untapped opportunity to create a truly premium mixer that matched the quality and craftsmanship of premium spirits.

Victoria Stevens: Absolutely fascinating. Now, let’s talk about the early days of Fever-Tree. It’s hard not to be struck by the incredible lengths you went to in order to find the very best ingredients.

Your website describes it as "an 18-month adventure from the archives of the British Library to facing the wrong end of a Kalashnikov in the Democratic Republic of Congo." That sounds like something out of a film! Could you share more about those early adventures?

Tim Warrillow: Yes! The adventure wasn’t planned, but it certainly turned into one.

When we started, we were determined not to compromise on quality. That meant doing things differently from the big soft drinks companies. Normally, large beverage brands develop products by calling up flavour houses, who provide pre-made formulas. The company then chooses the cheapest option that meets their budget.

We took the opposite approach. Instead of working with a flavour house, we went back into the history books to research where the world’s best ingredients came from. Then, we travelled to those places ourselves to source them directly. That’s what led to some of the more extreme adventures—including my trip to the Democratic Republic of Congo in search of the best quinine.

Both Charles and I had read a book called The Miraculous Fever Tree, which traced the history of quinine. It mentioned that the last remaining plantation of the highest-quality quinine was in one of the most remote and lawless regions of the world—the eastern part of the Democratic Republic of Congo. So, I set off to find it.

To give you an idea of how remote it was, I flew from London to Nairobi, then to Kigali, Rwanda. From there, I had to convince a local taxi driver to drive me eight hours across Rwanda just to reach the DRC border. Then, the real challenge began.

In the three-mile journey from the border to the plantation, I was stopped three times. The first roadblock involved men throwing a plank of wood covered in six-inch nails in front of the taxi. The second was just a piece of string, but the men holding it were heavily armed—so we stopped anyway. The third stop was the most intimidating, as I came face-to-face with a young man holding a rocket launcher over his shoulder.

At that point, I did wonder whether this was really the best business decision!

But it was worth it. When I finally arrived at the quinine plantation, I found a remarkable operation—one that had been running for generations. We’ve sourced our quinine from them ever since, and they’ve become fantastic partners in the business.

Victoria Stevens: That’s incredible. And, of course, this quinine is the source of your brand name—Fever-Tree!

Tim Warrillow: Exactly!

The fever tree is the tree from which quinine is extracted. Historically, quinine was considered one of the greatest medicinal discoveries because it prevented and cured malaria. That’s why British troops in India were given a daily dose of quinine as their medicine.

But quinine is incredibly bitter. To make it more palatable, soldiers began mixing it with sugar, water, and local botanicals—creating what we now know as tonic water. And because British soldiers always carried a ration of gin, they started adding gin to their quinine tonic, giving birth to the gin & tonic we know today!

Victoria Stevens: It sounds like sourcing the quinine was just the beginning. What about your other ingredients?

Tim Warrillow: That’s right. We applied the same approach to every ingredient.

Our lemonade uses extraordinary lemons from the foothills of Mount Etna in Sicily. Our ginger comes from a mix of sources, including Nigeria, India, and the Ivory Coast. Our grapefruit for our Paloma mix is sourced from Mexico, where they grow the most fragrant pink grapefruits in the world.

We made it our mission to find the best ingredients on the planet, and that’s something we still do today.

Victoria Stevens: So, once you had perfected the recipe and sourced the best ingredients, how did you go about gaining commercial traction?

At the time, the tonic market was completely dominated by one major incumbent. How did you challenge that dominance and break through?

Tim Warrillow: It was definitely not easy. We had our product—we were incredibly proud of it—but now we had to sell it.

From day one, our strategy was to do everything differently from the big soft drinks companies. Typically, a large soft drinks brand will develop a new product, launch a big marketing campaign, and then convince major retailers to stock it.

We took a completely different approach. Instead of going straight to supermarkets, we targeted the high-end hospitality sector first—luxury hotels, bars, and restaurants.

We knew that bartenders and sommeliers were the key influencers in the world of premium spirits. If we could win them over, they would become our greatest advocates.

So, Charles and I went door-to-door. We spent months visiting bars, restaurants, and hotels—meeting bartenders, getting them to taste the product, and showing them the difference real ingredients made. It was a long and slow process, but it worked.

One of our big early wins was landing a spot at El Bulli, the world-famous Spanish restaurant run by Ferran Adrià.

Victoria Stevens: Yes! I read that Ferran Adrià—the best chef in the world at the time—actually made a granita out of Fever-Tree tonic. That must have been a huge moment.

Tim Warrillow: It really was. It was also a stroke of luck.

Ferran had been given a bottle of Fever-Tree by a British artist who knew he loved gin & tonic. A few weeks later, we got a call from the sommelier at El Bulli, saying that Ferran wanted to meet us.

Of course, we jumped on a plane immediately!

When we arrived, Ferran told us that he had not only made Fever-Tree tonic the official aperitif at El Bulli, but he had also used it as one of the dishes on his famous tasting menu.

That moment gave us an enormous credibility boost, particularly within the chef and bartender community.

Victoria Stevens: It sounds like your approach was almost grassroots marketing—building a reputation organically rather than through big advertising spend.

Tim Warrillow: Exactly.

Rather than spending millions on traditional advertising, we focused on creating an aspirational brand through high-end partnerships.

We were the first to create gin & tonic menus for bars and restaurants, listing Fever-Tree as the recommended mixer. We partnered with top cocktail bars and mixologists to create new drinks and educate consumers. We collaborated with premium spirits brands to showcase how Fever-Tree elevates their products.

This approach created a halo effect. Consumers saw Fever-Tree in the best bars and restaurants, which made them want to buy it at home. By the time we entered supermarkets, we already had brand awareness and demand.

Victoria Stevens: How did you fund those early years?

I know that, at some point, you brought in venture capital investment—but what was the funding journey like?

Tim Warrillow: We went through almost every type of funding possible.

At the start, Charles put in some money from his Plymouth Gin sale. I, on the other hand, had nothing but student loans to offer! We raised some angel investment from private backers. After about 18 months, once we had some momentum, we took in venture capital.

We made it very clear to the VC investors that we wanted them to be hands-off. For the first five years, they kept their word. But then, as often happens, they wanted an exit. Some of them had polo ponies to stable, divorces to settle, school fees to pay… and they decided they wanted to sell their stake.

That put us in a tricky position, because we did not want to sell the business at that stage.

Victoria Stevens: That must have been a stressful time. How did you navigate it?

Tim Warrillow: We ultimately decided to go public.

In 2014, we floated Fever-Tree on the London Stock Exchange.

For us, an IPO was a way to take control of our future. It allowed us to give our VC investors a return while still keeping control of the company. It gave us access to capital to fund international expansion. It also gave us credibility as a premium brand.

Victoria Stevens: A decade later, do you still think floating the business was the right decision?

Tim Warrillow: I think you can only judge it based on the circumstances at the time—and back then, it was definitely the right move. Being a public company has raised our profile and allowed us to grow significantly.

That said, the stock market has become increasingly short-termist, which can be frustrating. When we first listed, we had long-term investors who understood our vision. Nowadays, there’s more pressure for quick results, which isn’t always ideal for a business like ours that is focused on long-term value creation.

Victoria Stevens: Let’s talk about your international expansion. You’ve built an incredible market position in the UK—going from 5% market share to around 45% in just over a decade. But now, future growth is about replicating that success overseas, in markets like the US, Europe, Australia, and Asia. Can you tell us about the first steps you took to expand internationally?

Tim Warrillow: Yes, and what’s unusual about our story is that we started expanding internationally very early on. Most start-ups focus on their home market first, but we realised that we weren’t just the first people in the UK to think about premium mixers—we were the first in the world.

So, our strategy was to establish ourselves in key spirit markets before anyone else did. We launched in Spain within our first 18 months, partly thanks to the El Bulli connection. We entered the US in 2007, and I actually moved my family out there in 2008 to drive the business forward. Charles relocated to Spain to oversee growth in that region. The goal was to position ourselves as the global pioneers of premium mixers before competitors caught on.

Victoria Stevens: Let’s focus on the US, because that’s now your biggest revenue segment. The US is notoriously difficult for UK consumer brands to crack—so how did you approach it?

Tim Warrillow: We knew the US would be key from day one. It’s the largest spirits market in the world, and premiumization was just beginning to take hold in gin, tequila, and whiskey, so we saw huge potential.

The US market, however, is incredibly complex. The alcohol industry operates under a three-tier distribution system, which means spirit brands and mixers are sold through different channels. Retail is also highly fragmented, with independent stores making up a significant part of the market. On top of that, logistics can be challenging given the sheer scale of the country.

Rather than rushing in, we took our time to build the right approach. We started by targeting premium bars and restaurants, just as we had in the UK. We launched regional strategies, expanding state by state rather than trying to go national overnight. In 2018, we set up our own US business to take control of distribution and sales. That strategy has paid off, and today, we’re the number one tonic and ginger beer brand in the US and the clear leader in the premium mixer category.

Victoria Stevens: One of the biggest developments in Fever-Tree’s history was the Molson Coors partnership. For our listeners, earlier this year, Fever-Tree announced a strategic partnership with Molson Coors, one of the largest brewers in North America. Molson Coors took an 8.5% equity stake in Fever-Tree and signed an exclusive deal to sell, distribute, and produce Fever-Tree in the US.

Tim, this is a huge move. What does this partnership mean for Fever-Tree’s future?

Tim Warrillow: It’s a pivotal moment for us—particularly in the US.

We’ve grown the US business incredibly well over the last six years, with an annual compound growth rate of 24%. But to take Fever-Tree to the next level, we needed a partner with scale.

Molson Coors gives us several major advantages. First, their distribution reach is unmatched. They have incredible access to the US retail market, including smaller convenience stores, which will allow us to significantly expand our footprint. Second, they open up opportunities beyond mixers, particularly in the adult soft drinks and ready-to-drink cocktail space, which are both growing categories. Lastly, their local production capabilities will improve efficiency and margins, allowing us to scale up while maintaining our high-quality standards.

This partnership allows us to turbocharge our growth while keeping our brand integrity intact.

Victoria Stevens: I have to say, I’ve been frustrated by some of the commentary in the market around this deal. Some analysts are only focusing on the short-term impact on margins because Fever-Tree and Molson Coors will be co-investing in brand building over the next two years.

But as a long-term shareholder, I see this as a hugely exciting moment. Does it frustrate you that some investors are so short-termist?

Tim Warrillow: Honestly? Yes, it amazes me.

For years, investors have been asking, "When are you going to invest more in the US?" Now we’ve announced a fantastic long-term growth plan, and some are asking, "But what about this year’s margins?"

The reality is that we are making a strategic investment in the US, which will drive significant long-term value. We’ve secured a world-class partner in Molson Coors, who is equally invested in our success. In the near future, we’ll see the benefits of greater distribution, local production, and new product categories.

For any investor thinking beyond the next 12 months, this deal is transformational.

Victoria Stevens: Given how successful this partnership could be, do you see similar strategic partnerships happening in other markets?

Tim Warrillow: Absolutely.

Since announcing the Molson Coors deal, we’ve had a lot of interest from other major drinks companies. We already have strong partnerships in key markets. In Spain, we work with Estrella Damm, one of the country’s biggest brewers. In Japan, we’ve partnered with Asahi, another drinks giant. Both of these partners, like Molson Coors, are looking beyond beer and into premium beverages.

So, we’ll definitely explore whether a similar model could work in other territories. But for now, our focus is on executing the US partnership and making it a huge success.

Victoria Stevens: Tim, despite all the exciting developments we’ve discussed, the last few years haven’t been without challenges. Like many other businesses, Fever-Tree has had to navigate the COVID pandemic, inflationary pressures, and geopolitical tensions. On top of that, there’s an increasingly mixed consumer demand backdrop around the world.

I imagine that, as the person leading the company, those pressures can take a personal toll. How have you remained resilient through all of this?

Tim Warrillow: It has been an extraordinarily tough five years. But in truth, nothing compares to the early days when we were starting out and everyone was telling us we were mad. That kind of resilience is very different.

When COVID hit, we made the decision not to furlough any staff, despite the fact that a significant part of our business relied on the hotel, bar, and restaurant trade. Many of our competitors took a different approach, but we felt strongly that we needed to continue supporting our customers and partners during that time. It was the right decision because when things reopened, we saw a real acceleration in our market share.

More recently, we faced immense cost pressures with rising input prices. There was a lot of short-term pressure from some investors to simply pass those costs on to consumers by raising prices aggressively. We took a different view. Fever-Tree has spent years building a strong, loyal customer base, and we weren’t willing to risk alienating them. Instead, we managed costs carefully, absorbed some of the impact, and ensured that we continued delivering value to our customers.

The result is that today, we are in a stronger position than ever. Fever-Tree has greater market share, a solid business foundation, and an exciting opportunity ahead. It has been challenging, but looking back, I’m incredibly proud of the way we’ve navigated it.

Victoria Stevens: One of the key aims of this podcast is to give our listeners a real insight into how successful entrepreneurs think about building businesses for the long term. Many of them may be aspiring entrepreneurs themselves.

Do you think the UK does a good job of nurturing entrepreneurship? What could we do better to inspire and support the next generation of founders?

Tim Warrillow: The UK absolutely has the talent and ambition to produce world-class entrepreneurs, but I don’t think we do a particularly good job of celebrating or supporting them.

There’s a tendency in Britain to be a little reserved about success. In some other countries, successful homegrown businesses are championed loudly and proudly. The government has a role to play in this too. It should be doing everything it can to support British business, whether that’s through favourable policies, export promotion, or ensuring British companies have a seat at the table in key global markets.

I spend a lot of time travelling and attending trade events, and it’s clear that other nations are far more proactive in promoting their businesses abroad. The UK could do much more in that respect.

Victoria Stevens: I’ve been asking all my guests this final question. You’ve built an extraordinary career and an iconic brand. But if you could switch places with anyone, in any profession, for just one day, who would it be?

Tim Warrillow: I actually have a very immediate answer to that because I have a very immediate need!

I have a smallholding with some sheep that are about to start lambing and a couple of cows that are about to start calving. I have absolutely no experience in this area, and it’s all coming at me very quickly. If I could swap places with a farmer for a day, I would do it in a heartbeat. I’ve been watching endless YouTube videos at night, but I suspect I need a bit more hands-on experience before things get serious.

Victoria Stevens: So you’ve been watching a bit of Clarkson’s Farm then?

Tim Warrillow: It’s a much smaller version, but yes, I’m quickly realising how much I still have to learn!

Victoria Stevens: Tim, thank you so much for joining me today. It has been an absolute pleasure speaking with you.

For our listeners, please do subscribe via Spotify, Apple, or your usual podcast provider. And as always, please remember that nothing in this podcast should be construed as investment advice or a solicitation to purchase securities in any company or investment product mentioned.

See you next time.