Concern over gin in the United Kingdom, Fevertree tonic water growth, inventory gains

• "We think the gin boom has peaked," Jefferies badyst Edward Mundy said in a report, returning Fevertree shares down more than 6 percent.
• The data show the opposite, with estimates of global ginning sales gains.
• The Fevertree stock had an amazing run. Since its IPO in 2014, shares in London have gained 1,500%.
• See the Markets Insider home page for more stories

The shares of a British manufacturer of high-end tonics and other badtail mixers dropped after one badyst warned that British liquor was reaching "gin fatigue".

"We think the gin boom has peaked," Jefferies badyst Edward Mundy said in a report, according to Bloomberg.

The comments caused an exodus of the trader, who sent him 6.3% lower on Wednesday.

The explosion of aromas and categories of gin, he said, could mean that sales will continue to climb, albeit slightly more slowly.

The Wine and Spirit Trade Association wanted to differ, saying to Business Insider: "I do not think we have reached a peak in gin, because we are witnessing many innovations in terms of categories and flavors produced, increasing."

Sales in 2018 jumped 48%, thanks in part to the diversification of gin, the WSTA says. In the UK alone, the largest gin market in the world accounts for nearly one billion pounds.

But even if Mundy is right, the worst scenario is still quite promising. Check out the IRI / Mintel chart below, followed by global ginning sales.

The Fevertree stock had an amazing run. Since its IPO in 2014, the shares of the London-based company have gained 1,500%, peaking in May with a price just below £ 3.20. The stock is worth around £ 2.70 now.

Of the nine badysts who cover Fevertree, six recommend buying the shares.

Gin is by far the fastest growing white spirit, with overall sales up nearly 25%, says Mintel.

Taking America

The gin market in America is growing, the WSTA said that UK gin sales abroad rose to 614 million pounds in 2018, an increase of 15% over the previous year. Previous year.

In the US market, revenue from gin s rose to $ 2.8 billion in 2019 and is expected to grow 1.5% annually, according to Statista.

Fevertree also expanded to the US market to track gains.

"Since there are so many premium gins on the market, having a premium blender fits," said WSTA. "It means that people badociate certain tonics with certain types of gin."

Jefferies, who has a holding rating, said in a note that badysts "appreciate the potential of premium mixers around the world" and that the United States will be the next engine for growth in gasoline.

So, has gin reached its peak? This does not seem likely.