How Investors Made a 20x Return
There have been some great articles floating around recently about Fever Tree, the premium tonic water and mixers brand, that has taken a massive slice of its market.
The key learn from these articles is that great execution will beat a great idea hands down, every time!
So how did Fever Tree do it? How did they become the biggest stock on the AIM Market in such a short space of time?
As background, Fever Tree launched in 2004, when its founder originally wanted to enter the premium gin market, just prior to the gin explosion.
His initial Angel Investor and Co-Founder however had the idea that it would be better to supply the mixer for all the brands within the premium gin market, as opposed to creating another gin in what would be, a crowded market.
The pair then went on a mission to develop the best possible premium tonic water. The rest is history – dominance of the market; private equity investment; a public listing in 2014; 20x growth in the share price since listing; continuous double-digit growth in revenue and profits year on year.
No doubt, the initial idea was terrific. In fact, in today’s world, we would call that a “platform technology”! But it was the company’s execution that has led to its impressive shareholder returns and success.
There was no reinvention of the wheel here. How do you reinvent tonic water?
Instead the company focused on developing the best possible, premium tonic water; constantly expanded its product range; captured the consumer market; and aggressively launched in new overseas territories, including the US.
What Fever Tree has demonstrated, in these times of the current “Technology Revolution” is that execution is always key.
It’s not just the world of AI, Fintech or VR that can result in healthy investor returns. If there is a great plan in place, great founders who execute well, can make a success of most things.