In 2016, the opportunity in the global market for tonic water was US$1.52 bn. Expanding at a CAGR of 6.10% during the period from 2017 to 2025, it is likely to touch US$2.45 bn mark by the end of the period of the forecast. Alcoholic drinks have surfaced as the main application area of tonic water and the scenario is anticipated to remain same over the next few years. Among products, flavored tonic water is witnessing a relatively higher demand than its non-flavored counterpart. Among the geographies, Asia Pacific has been leading the market for tonic water across the world. Expanding at a CAGR of 5.70% between 2017 and 2025, this regional market is anticipated to remain on the top over the next few years, states the market study.
Application in Alcoholic Drinks Far Surpasses Direct Consumption
The global tonic water market can be segmented based on different parameters. Depending upon application, for example, it can be divided into direct consumption and alcoholic drinks. Of them, the segment of alcoholic drinks grosses most of the revenue in the market on account of the increasing alcohol intake worldwide. This, in turn, has resulted from the changing lifestyles leading to increasing social gatherings and parties, and the popularity of social media and internet, and the growing perception that alcoholic drinks relaxes the mind. The tonic water market in alcoholic drink segment is forecasted to clock a higher CAGR of 6.6% between 2017 and 2025 to become worth US$1.87 bn by 2025, while in direct consumption segment is predicted to rise at a 4.7% CAGR in the same period to attain a value of US$578.4 mn by 2025.
Depending upon the sales channel again, the global market for tonic water can be divided into direct sales and retail sales. The retail sales segment is further divided into modern trade, convenience stores, online retailing, and other retailing formats. The direct sales segment is predicted to expand at a higher CAGR of 7.5% CAGR from 2017 to 2025, while the retail sales segment is expected to register a 5.4% CAGR in the forecast period.
Popularity of Gin and Vodka in Europe Propels Market
Geographically, North America, Latin America, Asia Pacific, Europe, and the Middle East and Africa are the key regions studied in the report. At present North America and Europe market dominate the global market for tonic water volume-wise. By 2025, the two regions are expected to collectively account for 67% share in the global market. This is because of the surging popularity of gin and vodka in Europe, with which tonic water is usually added.
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Increasing Disposable Income Reflects Positively on Demand
The increasing disposable income of people, thanks to the rapid industrialization and the strengthening of economic condition in various countries across the world, has reflected dramatically on their lifestyles, resulting in augmented consumption of alcohol such as vodka and gin. “Since tonic water is used to mix into these spirits to make a drink, its demand is also increasing significantly,” states a researcher at TMR. The constant rise in the number of clubs, lounges, and bars, fueling alcohol consumption, is also fueling the sales of tonic water, reflecting greatly on this market.