Tonic Water Market to exceed US$ 3.47 billion by 2031

    Published on 14-Jun-2024
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    Report : Tonic Water Market Size and Forecast (2021 - 2031), Global and Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Type (Plain and Flavored), Category (Low/No Sugar and Regular), End User (On-Trade and Off-Trade), and Geography

    The scope of our recent study on the "Tonic Water Market Forecast to 2031 - Global Analysis - by Type, Category, End Use, and Geography" includes the factors fueling the tonic water market growth, revenue estimation, and forecast, market share analysis, and the identification of significant market players and their key developments.

    The tonic water market size is projected to reach US$ 2.01 billion in 2023 to US$ 3.47 billion by 2031; it is estimated to register a CAGR of 7.1% from 2023 to 2031.

    Changing consumer preferences and tastes have been driving the demand for gin across the world. With people exploring and indulging in the diverse flavors of gin, the requirement for complementary mixers to enhance their drinking experience also surges. Tonic water, with its bitter yet refreshing taste, serves as a perfect companion to gin. Thus, a surge in gin's popularity has led to a corresponding rise in the consumption of tonic water. Further, craft gin is gaining significant popularity across the world. As gin enthusiasts become more discerning of the flavor profiles of their spirits, they seek high-quality mixers to elevate their cocktails. Artisanal and small-batch brands have started focusing on catering to the demand for premium tonic water, offering a wide range of botanical-infused and flavored tonic water that complements the nuanced characteristics of craft gin. Moreover, consumers are willing to pay premium prices for superior products that enhance their drinking experience.

    The popularity of gin-based cocktails is on the rise in bars and restaurants, which indicates the spurred demand for tonic water in the hospitality sector. Mixologists and bartenders are continually innovating and experimenting with new gin and tonic combinations with different flavors, driving the need for various tonic water options to accommodate diverse tastes and preferences. As a result, tonic water manufacturers are expanding their product offerings to include different flavors, formulations, and packaging sizes to meet the demand of both retail consumers and the hospitality industry. Thus, owing to popularity of gin and tonic combination, the increasing demand for gin is a direct driving force for the growth of tonic water market.

    With the increasing popularity of cocktails made with vodka, rum, tequila, and other spirits, consumers have an array of mixer options to choose from, including soda water, cola, ginger beer, sparkling water, and various fruit juices. Moreover, consumers may perceive these options as more versatile or appealing in different cocktail recipes. This diversification in mixer choices can divert consumer spending away from tonic water. In addition, the emergence of the health-conscious consumer trend has led to a rise in the popularity of low-calorie and zero-sugar beverage alternatives. While traditional tonic water contains sugar or other sweetening agents, health-conscious consumers may opt for sparkling water or flavored seltzers as lighter mixer options for their cocktails. These substitutes offer similar effervescence without the added sugar or artificial ingredients that are found in tonic water.

    Europe accounted for a remarkable share of the tonic water market in 2023. The UK and Germany are the largest markets for tonic water in Europe. The rising popularity of gin across the country is one of the major factors contributing to the growth of the tonic water market in Germany. Tonic water is largely used as a mixer in bars, restaurants, hotels, and at home to make different types of cocktails. In addition, health-conscious consumers in the country are adopting low-sugar and natural tonic water, aligning with the broader trend of healthier beverage choices. Further, the growing popularity of cocktail culture and mixology has fueled the demand for tonic water in Germany.

    The tonic water market growth in the UK is attributed to the increasing gin consumption, surging demand for premium tonic water, and rising requirements for unique flavors and ingredients in tonic water. In recent years, the popularity of gin, particularly artisans and craft gins, has soared, driving the demand for tonic water as a key mixer. In addition, the key players in the country are involved in strategic initiatives such as product launches, mergers, acquisitions, and collaborations to strengthen their position in the tonic water market. For instance, in July 2023, Double Dutch-a UK-based premium tonic water and mixer brand-announced the launch of its new elderflower tonic water. The launch was aimed to cater to the growing consumer demand for unique flavors and premium products.

    Based on category, the low/no sugar segment is projected to register the fastest CAGR from 2023 to 2031. The preference for low-calorie and no-added-sugar drinks is increasing with rising concerns such as obesity, diabetes, and heart problems. According to the World Health Organization (WHO), 43% (~2.5 billion adults) of people aged 18 and above worldwide were overweight in 2022. With a stagnant lifestyle and lack of physical activities, people are experiencing obesity issues, which hampers their overall health. Therefore, consumers are substituting high-calorie, sugar-dense products with low-sugar or sugar-free alternatives available in the market. Tonic water manufacturers are developing low/no sugar products to meet the rising customer demand for low-calorie drinks. They use low-calorie sweeteners such as saccharine, fruit sugars, and honey in their tonic waters to develop these alternatives. Thus, the flourishing trend of health consciousness and the availability of various low-calorie tonic water products support the growth of market for the low/no sugar category of tonic water.

    Asia Pacific is expected to register the fastest CAGR in the global tonic water market from 2023 to 2031. The demand for tonic water is surging in Asia Pacific due to shifting consumer preferences and evolving drinking culture. The increasing popularity of gin and tonic cocktails among young demographics is a major factor contributing to the market growth. As Western drinking trends continue to influence a market in Asia Pacific, there's a growing appreciation for gin-based beverages, leading to a corresponding surge in demand for tonic water as a key mixer. Further, the surging nightlife and increasing tourism industry has propelled the demand for tonic water in bars, restaurants, and pubs. In addition, the rise of cocktail culture in urban areas across the region has created a demand for tonic water and other high-quality mixers as consumers seek to replicate the craft cocktail experience at home and in bars.

    The report includes the segmentation of the global tonic water market as follows:

    The global tonic water market is segmented based on type, category, and end user. In terms of type, the market is segmented into plain and flavoured. Based on category, the market is segmented into Low/no Sugar and Regular. By End user, the market is segmented into on-trade and off-trade.

    By geography, the market is broadly segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South & Central America. The North America market is further segmented into the US, Canada, and Mexico. The tonic water market in Europe is sub-segmented into Germany, France, the UK, Italy, Spain, and the Rest of Europe. The Asia Pacific tonic water market is further categorized into China, India, Japan, Australia, South Korea, and the Rest of Asia Pacific. The market in the Middle East & Africa is further segmented into South Africa, Saudi Arabia, the UAE, and the Rest of Middle East & Africa. The South & Central America market is further categorized into Brazil, Argentina, and the Rest of South & Central America.

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