RISE OF PREMIUM INDIAN TONIC BRANDS

As per our estimates, 75% of the times when someone is consuming a gin, it is with tonic water. The reverse also holds true. 75% of the times when someone is consuming tonic water, it is with gin. Hence the acceptance and consumption of both these products go hand-in-hand. As the world witnesses an increased demand for premium gins starting around the year 2016, the demand for premium tonic water has also increased.

 ‘People across the world had started caring about the gin that goes with their tonic, but now people are also caring about the tonic that goes with their gin! There is demand for tonics that are not overly sweet, and which when added enhance their drink rather than overpowering it.’


Tonic water sold in plastic/PET bottles and cans are now somewhat seen as less in trend as compared to tonic water sold in glass bottles. Glass bottles are better in retaining the carbonation required for a fizzy drink, while also being less environmentally damaging than plastic bottles. Consumers are also getting health conscious and when given a choice will prefer to consumer products without the use of artificial colours, sweeteners or preservatives, albeit at higher price.

Big Tonic Vs New Tonic

The major consumption of tonic water still is concentrated in the mass segment, and the leader in that segment is Schweppes Tonic Water, a brand owned by FMCG giant Coca Cola. Schweppes was launched in India in the year 1999 and has since then penetrated almost all retail and HORECA points. Whether we look at tonic water availability during functions and wedding, hotels, modern trade, general trade etc., it is all dominated by Schweppes tonic water. The Schweppes/Coca Cola team has done an outstanding job in product placement, making it the number one selling tonic water brand in the market.

Premium tonic water brands in the west include Fever Tree, Double Dutch and East Imperial. Premium tonic water brands in India have also emerged, which include Svami (launched in 2018), Bengal Bay (launched in 2020), Sepoy (launched in 2018), Jade Forest (launched in 2018) and now our very own PEER (launched in 2021).

Based on our experience, launching a tonic water brand is more challenging than launching a gin brand, because the trending gin brands are craft in nature and can be made in small batches. People are willing to try new gin brands they come across even if they have not heard about it before. Furthermore, because of advertising restrictions in the alcohol industry, the marketing expenditure a start-up has to undertake is limited and is a level playing field with other big alcohol companies launching their own craft gin brands. As a new tonic water brand, one has to compete with Schweppes for market share, which although is a budget segment player, provides stiff competition owing to significantly lower price points and widespread market penetration.

   

Ciao! How’s it going? Thanks for visiting PEER and reading this journal. Feel free to share with anyone you think will want to read. And please do let us know at letschat@peerdrinks.com if you have any comments or suggestions for future journals. Also do tell us which one of PEER’s tonic water flavours you like the most. Is it Bitter Lemon Tonic Water, our Zero cal. variant, Mint Tonic, or Indian Tonic? Which tonic water brand is your favourite and why? We at PEER view our direct competitors as peers and allies. Is this a good way to think? We feel if the category grows, then all brands will do well and vice versa! What are your views?

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