Flying off the scale: Fever-Tree’s Tim Warrillow talks malaria, crane strikes and private equity
We're seeing a renaissance; it’s incredibly exciting. People are better educated and the market is growing and growing – and quite right too, it’s a great English invention.” Tim Warrillow is talking about the gin and tonic – something the co-founder of maverick drinks company Fever-Tree knows a fair bit about.
The gin and tonic story goes (and Warrillow is quick to tell it) that the drink was introduced by the army of the East India Company in India. Quinine, that crucial tonic water ingredient, is a potent antimalarial. This was discovered in the 1700s. By the 1900s, officers had taken to adding a mixture of water, sugar, lime and, depending on how apocryphal you’re feeling, gin to make doses more palatable.
A NEW STANDARD
Of course, tonic water today doesn’t have anywhere near the amount of quinine needed for medicinal purposes. In fact, until recently it was more likely to be rammed with artificial sweeteners. Premium gin was growing in popularity, but mixers were pretty much limited to Schweppes or supermarket own brand. Enter Fever-Tree, founded in 2005. “People had no choice but to drown their gin – both Charles and I wanted to put an end to that.”
Charles Rolls is Warrillow’s fellow co-founder. The former is a veteran of the industry – he’d previously turned around Plymouth Gin – and he and Warrillow met over a coffee in 2003, having been put in touch by friends. It was during that first meeting that they decided to go into business together. And 12 years later, in November 2014, they floated that business on London’s Aim, valued at at £154.4m. Now, Fever-Tree has 11 products to its name, operates in 53 countries, with 70 per cent of its products sold overseas.
Warrillow had run a small business while at university and, despite spending most of his twenties in marketing, the experience had rather “whet his [entrepreneurial] appetite”. Today, the pair get a stream of would-be entrepreneurs coming to them for advice. Many are reputable individuals, but there’s something missing. “They’ve got very excited about an idea, but they’ve done no research. But then, I wish that more people did go for it. Generally speaking, we’re still quite conservative.”
He remembers going out for venture capital early on: “here in the UK, the response was ‘you think you can take on Schweppes?’. In the US, it was, ‘hang on, Schweppes is the only major player?’ It’s the difference between seeing an opportunity, rather than a problem.”
FAR FLUNG CORNERS
The Fever-Tree quest has taken the pair all over the world – and you can taste it in their drinks. In the early days, they set off to the Democratic Republic of the Congo to source quinine (which comes from the Fever-Tree). “We were the only drinks company to have visited the plantation,” says Warrillow. Most of its customers are pharmaceutical companies, and the plantation is, aside from the local brewery, the only business in the war-torn area.
Fever-Tree’s ginger ale includes three different types of ginger – again, from far-flung corners of the earth that the founders have visited. Stick it next to a competitor, and you understand why Warrillow labels that “brown Sprite”. As a point of information, ginger ale is different to ginger beer – because the latter is brewed. In the US – “the most mature spirits market by a long shot” – its popularity is sky-high: “it’s as big as tonic, and that’s driven by the Moscow Mule, which they love”. Warrillow moved out to the US with his family to get the launch of Fever-Tree right: “it took an awful lot of time and effort, but we’re really starting to see some results”.
NEW LEASE OF LIFE
Since going public, and a decade in, Warrillow and Rolls are concentrating on deepening their position at the premium end across the countries is operates in. With new markets approaching the firm, and with several new products being “looked hard at”, there’s plenty to be getting on with. UK growth has been particularly impressive, at a rate of 60 per cent.
Unlike for many firms going to market, the process wasn’t too much of a shock to the system for Fever-Tree. With two private equity stakeholders, Warrillow and Rolls were used to formalised reporting requirements already. “Private equity is always very involved, very hands on,” explains Warrillow. Before the flotation, LDC had a 53.1 per cent stake and Somerset cider drinks company Brothers, who have been bottlers for Fever-Tree, owned 4.1 per cent. While this has never been a big problem for the pair, post going public, there “is a sense that you’ve got some freedom back. But of course you’ve got duties to your new shareholders. They’re less involved, but there are many more of them”. While the private equity owners, who have since sold down their stakes, were more focused on the short term of getting the company to market, Warrillow and Rolls, understandably, have “a longer-term focus”.
You’d be forgiven for thinking that, for two strangers who set up shop together, it’s going pretty well for Warrillow and Rolls – “touch wood, we haven’t had anything go catastrophically wrong to date”. In the early days, it took far longer than expected to get an initial product – 18 “painful” months, in fact.
But the care the pair has put into each product pays off – and any mini-catastrophe tale has that same air of assiduity to it. Earlier this year, a Stevedores crane strike on the west coast of America halted imports. “Fortunately, we got rumours of it ahead of time. We had to work hard to get a stock of produce in, re-route some to other places, and put contingency plans in place in case that didn’t work.”
For Warrillow, there’s no question that dealing with the lows – and the highs – of running a business are best done with another. “The best thing I ever did was find an extremely good partner. It isn’t just beneficial to your business, it makes the whole experience far more enjoyable”.
TIM WARRILLOW CV
Company name: Fever-Tree
Number of staff: 25
Studied: Business management & marketing at Newcastle University
Drinking: Gin & tonic and Dark & Stormy
Eating: Anything Asian and spicy
Currently reading: Raffles, by Victoria Glendinning
Favourite Business Book: The East India Company, by Antony Wild (a reminder of Britain’s entrepreneurial roots)
Talents: Disappointingly few
Heroes: Serge Blanco
First ambition: To beat my dad at table tennis
Motto: “If three-quarters of your gin & tonic is tonic, make sure you use the best!”
Least likely to say: I would like to have a Schweppes with that
Awards: Fever-Tree has won The Queen’s Award for Enterprise, Fast Track 100 Best Brand, and is a Growing Business Awards winner, Grocer Gold Award winner and EY Entrepreneur of the Year finalist