The premium tonic water category has been on a consistent rise ever since the arrival of Fever-Tree in the early noughties. Over the subsequent 20 years the brand has seen a huge revenue boost, with sales increasing from £16m in 2012 to £364m in 2023. However, for the first time we’re seeing signs of frailty for tonic. In fiscal year 2024, Fever-Tree reported a 3% growth in total group revenue to £368.5m and, while this sounds healthy, the company credited the growth with non-tonic products. This suggests the opportunities for new mixers are greater than for traditional tonics.

New Zealand’s East Imperial, which was a top 10 bestselling tonic brand in Drinks International’s 2024 Brands Report, went out of business in July this year. It has subsequently received new investment, but after 13 years of trading the brand went into liquidation, proving the fallibility of even established tonics.

In 2021 Korean soju giant Hite Jinro launched its own tonic water as part of a strategy to tap into the Highball trend and push soju and tonic. It worked – Jinro Tonic Water is now the biggest in Korea, a market which, according to a report by The Asia Business Daily, almost doubled in value between 2021 and 2023. However, in 2022 Fever-Tree joined the party in Korea and, together with the rising popularity of RTDs, the company saw its first stagnation for tonic.

Market reorganisation

The same report featured a statement from Hite Jinro, saying: “As the culture of enjoying low-alcohol drinks like SoTonic (soju & tonic) stabilises as a mainstream drinking culture, products that can be used as mixers, including tonic water, are expected to reorganise the market with originality. We plan to continuously develop new products that pair well with various liquors and establish a more familiar brand through collaboration and promotions across different industries.”

Essentially, the company is going to continue to launch new products, the latest being a tomato-flavoured tonic this summer. The likes of Fever-Tree did the same thing – once its tonic water showed signs of sales fatigue it launched flavoured varieties before moving into other mixer categories such as ginger ale, cola and sodas.

One of the most successful flavours over the past decade has been Mediterranean-inspired. Fever-Tree launched its Mediterranean tonic in 2012 and nine of the 10 mixer brands in the bestselling list of Drinks International’s Brands Report has its own Mediterranean-style tonic in its range. Double Dutch, which launched in 2015, just introduced Riviera tonic to its range, while Three Cents Fig Leaf Soda continues to shine in Europe’s on-trade.

It’s true that established markets may be showing signs of tonic fatigue, hence the need for brands to diversify into soda and mixers. However, what we’re now starting to see is a natural filtration of brands – the survival of the fittest – much like what has happened in the premium gin sector.

That being said, in those less traditional tonic markets such as Korea, and particularly warmer countries which lend themselves to the G&T and Spritz, there’s plenty of headspace for both traditional and flavoured tonic water going forward.