The global tonic water market is expected to reach USD 2.46 billion by 2025, thereby growing at a CAGR of 6.3% from 2017 to 2025. Millennials form a significant consumer group for alcoholic beverages. This will, in turn, result in increasing demand for tonic water as a mixing ingredient for the drinks in the coming years.
The noticeable shift towards modernized lifestyles is introducing the concept of formal and informal events. This trend is expected to boost up the demand for all other associated products, drinks being one of them. The increasing demand for drinks is thereby likely to contribute to the growth of the global tonic water market.
Tonic mixes are available in two forms - regular and diet. Diet tonic water is gaining increasing traction among the health and diet consumers owing due to its less calorie and carbohydrate content. Diet tonic mixes include artificial sweeteners approved by the FDA. Hence, it has higher visibility and preferences among consumers.
Canada Dry and Schweppes diet tonic water are usually available in the U.S. The diet mix offered by both the brands have zero calories and 12-ounce serving. These tonic mixes include calorie-free ingredient saccharin to sweeten the water which is mainly non-nutritive and has no carbohydrate content. Thus, it is witnessing an increasing preference among consumers.
The U.S. FDA has regulated the production of tonic water and has limited the quinine content in the retail brands to about 83 parts per million. As of the original formulations, the 12-ounce serving did not contain sufficient quinine to provide any medicinal benefits. Regular and diet tonic water contain sodium.
As per The United States Department of Agriculture (USDA), the amount of sodium in a single serving of regular water has an average of 2% of a suggested portion for the healthy adults (44 milligrams). Diet tonic water by Schweppes contains about 95 milligrams of sodium per serving, which is equivalent to 4% of the suggested daily maximum. Whereas, diet tonic water manufactured by Canada Dry has 80 milligrams of sodium each serving, which is equal to 3% of the daily value.
Tonic water is used as a mixing product for various alcoholic drinks such as gin, vodka, and others. Increasing consumption of gin is also one of the primary drivers for the global market. Countries having a high consumption of gin include Spain, U.S., UK, Belgium, and the Netherlands to name a few.
Spain, Belgium, the UK and Netherlands together were estimated to have a volume consumption of 3 liters per person in 2017. Gin is considered to be a popular drink in the UK with a consumer preference of about 30%, followed by vodka having 23% in 2018. The increasing inclination towards gin and vodka is expected to drive the demand for global tonic water market.
For the Indian alcohol market, vodka sales are expected to boost up in the next five years from 2019 thereby having a growth of about 11% - 12%. This growth is attributed to the introduction of flavored vodka that is likely to attract the younger population. The use of tonic water as a mixer for vodka is expected to fuel the growth of the global market.
Key players operating in the global tonic water market include Fever Tree, Dr Pepper Snapple Group, SodaStream International Ltd., Whole Foods, White Rock, Fentimans, East Imperial, Lamb & Watt, Luscombe, Q Tonic LLC to name a few.
Companies are actively engaging in various initiatives such as product launches, innovation in terms of sales strategies and consistent product modification, to widen their customer base and enhance their geographical reach. Companies are targeting various festive seasons to launch their new and premium variants to attract consumers. Premium brand Fever Tree has been cashing on this trend to increase its sales. Manufacturers are also introducing flavored mixes to offer new tastes apart from the traditional, plain and bitter tasting ones.
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Hexa Research has segmented the global tonic water market report based on product, distribution channel and region:-
Segmentation by Product
Segmentation by Distribution Channel
• Supermarket and Hypermarket
• Convenience Store
• Online Retailers
Segmentation by Region
• North America
• Asia Pacific
• Central and South America
• Middle East and Africa
Key Payers Analyzed:
• Fever Tree
• Dr Pepper Snapple Group
• SodaStream International ltd.
• Whole Foods
• White Rock
• East Imperial
• Lamb & Watt
• Q Tonic LLC