WE’RE THE £4BILLION tonic tycoons
‘People thought we were barking mad’
WHILE we’ve been basking in the searing summer weather, perhaps sipping a refreshing gin and tonic, two men have been quietly raising glasses of their own to one of the most spectacular stock market successes Britain has ever seen. When Tim War rill ow and Charles Rolls started their posh mixer drinks company Fever-Tree back in 2005, they were just two ordinary middle-class enthusiasts with a business dream.
Back then they had no inkling that the company they founded would one day be worth more than £ 4billion, or that it would make them personal fortunes of nearly £800 million between them.
But enthusiasm in the City last week bubbled over as shares in Fever-Tree – named after the cinchona tree whose bark produces the quinine used in the drinks – hit a record high of £36.50.
In the short period of nearly four years since it floated, at a mere £1.34 a share, this quintessentially British business has outperformed even the explosive growth of tech giants like Apple, Facebook and Amazon by a country mile. No other major share on the UK market has even come close. So just how did
A small investor who bought £1,000 of Fever-Tree shares when it floated in 2014 would now have a holding worth around £26,865 including dividends compared to £2,330 if they’d invested in Facebook shares; £5,956 in Amazon and £1,868 in Apple.
these two unlikely tycoons stumble on such an extraordinary recipe for riches? The answer is an inspired hunch on the part of Charles Rolls, who spotted a way to cash in on the ‘ginaissance’ – the move away from ol d- s t yl e ‘ mothers’ r ui n’ and towards artisan gins, infused with botanical essences.
If drinkers were prepared to pay extra for trendy gin, he reasoned, why wouldn’t they do the same for the tonic they slosh into it?
And, with that devastatingly simple insight, discussed over a coffee in Chelsea at his first meeting with marketing expert Tim, a multi-billion pound empire was born – though not without the occasional brush with AK47- toting militias along the way.
Warrillow, 43, has a share-holding worth around £226 million – and that’s after he cashed in £29 million worth last year.
Despite his vast wealth, he looks and behaves like the hundreds of
‘No other share has performed so well’
nis courts near Chichester, which they bought in 2002 for less than £700,000. A flying enthusiast, Charles has a couple of planes but otherwise, signs of conspicuous consumption are hard to spot.
When Rolls and War rill ow met, Charles had made a minor name for himself in the gin industry but Tim was a 28-year-old novice. No one would have tipped either man to create the biggest sensation since Schhh….you know who.
Rolls had successfully revamped the ailing Plymouth Gin brand and sold it to the then owners of Absolut Vodka for £25 million, but that was a mere taster for the far greater riches to be found with his next venture.
Warrillow says: ‘ I contacted Charles rather out the blue to discuss an idea for a new gin. But over our first coffee the conversation moved from gin to tonic. It really was a fortuitous meeting of minds.’
Rolls says people thought they were ‘ barking mad’ to set up a mixer-drinks business. ‘You’re going up against Schweppes?’ they’d smirk. ‘That’s a worldwide brand’. But he and Warrillow were not put off – and Fever-Tree recently overtook Schweppes as Britain’s bestselling retail brand of mixers by value. ‘It’s a lot harder than it looks,’
Fever-Tree sold 308 million bottles and 76 million cans last year in 72 countries. In the first six months of this year, global revenues rose 45 per cent to £104.2 million, UK revenues rose 73 per cent to £58 million and profits rose 41 per cent to £55.5 million.
says Warrillow. ‘Charles and I spent a painstaking 18 months researching and developing the product before we were ready to launch. It took ages to track down the more remote ingredients but also an inordinate time to achieve the exact flavour we wanted. This was made par ti cularly difficult as we were using natural ingredients and no artificial preservatives, so we pasteurised the products in order to preserve them. ‘My failed attempt at home pasteurisation made my wife laugh her head off when she arrived home
one day to catch me standing over the stove dressed up in a woolly hat and swimming goggles.
‘I’ve carried out hundreds of taste tests, but fortunately I haven’t been put off G&T yet.’
Finding the ingredients took the pair on an odyssey of discovery, including a hair- raising trip for Warrillow to the eastern region of the Democratic Republic of Congo. ‘It was a very memorable trip for
many reasons, but particularly for the repeated armed roadblocks that I encountered, where they used AK47s and even a rocket launcher to get your undivided attention,’ Warrillow says. At one point near the Rwandan border, a gun was held to his head and he was allowed to carry on only after his taxi driver passed a handful of notes to the gunman through the car window.
Rolls stuck to more agreeable terrain, venturing to the Drome region of France where the lemon thyme oils for their Mediterranean tonic are distilled over pots of water heated by straw fires.
Exotic and far flung ingredients are very much part of the FeverTree mystique: they don’t put orange oils from any old Jaffas in their Indian tonic. Oh no – they use t he f i nest bit t er orange oi l s, extracted by farmers on the Yucatan Peninsula in Mexico.
Inevitably, some City gurus say Fever-Tree cannot carry on growing at such pace and that the shares are heading for a fall.
‘The price of Fever-Tree shares is too hot and too high,’ says Justin Urquhart-Stewart of Seven Investment Management.
‘I can’t think of any other share on the whole of the stock market that has performed as well, but history tells us that kind of rise is likely to be followed by a fall.’
Maybe it won’t last much longer, but f or t he t i me being, Tim and Charles still have plenty to toast as they enjoy their own evening sundowners.