How tonic water brands can reverse sales drop

While adult soft drinks have seen flat growth over the past year, tonic water’s performance over the same period has suffered. Sales are down 12.7% to £136m, with volumes down 15.1%.

Kantar category analyst Sam King says this is the result of three major trends: the return of on-trade socialising, the “bursting of the gin bubble” and the growth of premium own-brand tonic water.

On the latter count, own-label tonics are up 55.9% in value, though with only £11.5m in sales this is from a small base.

For mixer manufacturers it means diversifying away from tonic water in the coming year will be “a key consideration”, King adds. So what can brands do to reinvigorate interest in tonic water?

One proposal comes from Buzzed, a pioneer in energy tonic water, which its founder Louise Lloyd calls “a refreshing new take on the traditional tonic by delivering an alternative mixer or energy booster”.

Among the selling points are its claims to use “natural” caffeine and sweetening, the former from plant sources and the latter from blossom honey.

Buzzed also hopes to meet shoppers’ concerns around sustainability. Its ingredients are produced in the UK and the product is fully recyclable.

Sustainability is also on the mind of Lixir Drinks, a mixer brand that received B Corp status in November. It had been certified as carbon neutral by B Lab in 2021 and works with the Just a Drop water charity.

As with many other adult soft drinks brands, health is key. Lixir promises less sugar, fewer calories and “nothing artificial” in its recipes. And in terms of taste, the big sell is reduced use of quinine, which makes the tonics less bitter than their peers.

Investors are interested in the approach. Lixir secured £1.1m funding in June, off the back of 160% growth for the previous year, the brand having signed a distribution deal with Molson Coors in April 2021.