The U.S. & Canada tonic water products market was valued at USD 2.6 billion in 2021 and is projected to expand at a CAGR of 6.3% from 2022 to 2029. The increasing demand for tonic water products among consumers has been a major factor driving the market growth. The introduction of new flavors, along with innovative marketing strategies, has further boosted the demand for tonic water products.

The growing popularity of alcoholic beverages among young consumers is driving the demand for tonic water products. The combination of tonic water with alcoholic beverages, such as gin, vodka, and whiskey, has increased the popularity of tonic water products. Furthermore, the convenience of purchasing tonic water products online is also propelling the market growth. Moreover, the introduction of tonic water products with low-calorie, less sugar, and natural flavors has attracted a large number of health-conscious consumers.

The availability of tonic water products in various forms, such as plain, flavored, and sparkling, is also driving the market growth. The increasing demand for flavored tonic water, owing to its sweet taste, is expected to fuel the market growth in the coming years. Moreover, the introduction of organic products is further expected to drive the market growth. For instance, in February 2021, Fever-Tree launched an organic tonic water, which is made with natural ingredients, such as organic agave syrup, organic lemon juice, and organic lemongrass extract.

Furthermore, the increasing trend of premiumization in demand for tonic water products, with an increased impact of clean-label ingredients, has led to the high price of organic tonic water products. The growing number of health-conscious consumers has led manufacturers to focus on introducing products with natural ingredients, which is expected to further propel the growth of the market.

The growing demand for tonic water products among consumers has led to a rise in the number of new product launches. For instance, in January 2021, Schweppes launched a new range of tonic water flavors, such as cucumber, jasmine, and ginger. The launch is expected to expand the company’s market presence in the coming years. Furthermore, the growing prevalence of online stores, such as Amazon and Walmart, is expected to further propel the growth of the market.

The flavored tonic water segment accounted for the largest revenue share in the U.S. & Canada tonic water market in 2020. As consumers become more health conscious, they are increasingly opting for low-calorie and low-sugar flavored tonic water beverages. Moreover, the availability of various flavors like lime, mango, orange, and lemon has made these drinks an attractive option for the consumers. The growing popularity of these drinks has been a major factor driving the segment’s growth.

The organic tonic water segment is anticipated to register the highest growth rate over the forecast period. As consumers become more aware of the health benefits of organic products, the demand for organic tonic water is increasing. Furthermore, the availability of organic tonic water in various flavors and the ability of manufacturers to customize these flavors to meet the requirements of a wide range of consumers is driving the growth of the segment.

The supermarkets and hypermarkets segment accounted for the majority of the market share in 2022, driven by the growing consumer preference for purchasing tonic water products from supermarkets and hypermarkets. The convenience of shopping and the availability of a variety of tonic water products are the major factors propelling the segment growth. Moreover, the presence of in-store promotions and discounts coupled with the easy accessibility of supermarkets and hypermarkets are other factors driving the segment growth.

The online segment is anticipated to register the fastest growth over the forecast period, owing to the rising penetration of the internet and the increasing demand for online shopping. In addition, the availability of a wide range of tonic water products, discounts, and convenience of online shopping are further driving the segment growth. Furthermore, the leading companies are launching their websites and mobile applications to make the shopping experience more convenient for the customers. For instance, in December 2022, Fever-Tree launched its official website for the U.S. market, which offers a wide range of tonic water products.

The regular segment accounted for the largest revenue share of 66.2% in the year 2022. The high demand for regular tonic water is attributed to its low sugar content and carbonation, which provides a refreshing yet subtle flavor. It is also preferred as a mixer with spirits. The increasing demand for ready-to-drink cocktails is driving the regular tonic water market. Moreover, the health benefits associated with regular tonic water are driving its demand in the U.S. and Canada.

The low-calorie segment is anticipated to expand at the highest CAGR of 10.3% over the forecast period. The growing demand for low-calorie tonic water is attributed to its low sugar content and the increasing awareness regarding health and wellness. Furthermore, the rising trend of people opting for low-calorie drinks is also driving the demand for low-calorie tonic water in the U.S. and Canada.

The U.S. & Canada tonic water market is expected to register a CAGR of 4.4% over the forecast period 2021-2027. The U.S. held the largest market share in 2020 and is likely to lead the market during the forecast period. This is mainly due to the high per capita consumption of tonic water and the presence of major tonic water manufacturers in the country. Moreover, rising disposable income, changing lifestyle, and the increasing demand for premium tonic water products are some of the key factors propelling the growth of the market in this region.

Canada is expected to register the highest CAGR of 5.3% during the forecast period. The surge in demand for tonic water, especially among millennials and young adults, is expected to drive the market in this region. Furthermore, the presence of major tonic water manufacturers, such as Canada Dry, Fever Tree, and Schweppes, is likely to boost the market growth in this region.

In this part of the U.S. & Canada Tonic Water products business plan we will provide a detailed breakdown of all income and expense categories of the business. These forecasts include cash flow projections and capital requirements for the business. Usually, these projections are drafted for a 5-year period.

Revenue Assumptions
The main source of revenues for a U.S. & Canada Tonic Water products business comes from the sale of tonic water products. This includes both direct sales to customers and sales to distributors and retailers. Other sources of revenue can include online sales, promotional activities, and advertising.

Projecting Expenses
In this section, all the regular expenses related to keeping the U.S. & Canada Tonic Water products business running will be described. The list of operating expenses includes administrative expenses, marketing expenses, Raw materials, labor costs, packaging costs, transportation costs, and taxes. Additionally, costs associated with distribution, warehousing, and promotions should be accounted for.

Some of the key companies operating in the U.S. and Canada tonic water market are increasingly focusing on product launches and expansion of the distribution channel to gain prominent visibility among consumers. Some of the initiatives are:

– In October 2022, Schweppes launched a new range of tonic waters- Schweppes Gently Carbonated Tonic Water, with natural flavor.

– In August 2022, Fever-Tree launched the new range of tonic waters – Fever-Tree Indian Tonic Water, with natural flavors.

– In September 2022, Canada Dry launched the new range of tonic waters, Canada Dry Citrus Tonic Water, with natural flavors.

Some of the prominent players in the U.S. and Canada tonic water market include:

– Schweppes
– Fever-Tree
– Canada Dry
– Fentimans
– Q Drinks
– Seagrams
– Polar Beverages
– Jones Soda Co.
– Hint Inc.
– AriZona Beverages

This report forecasts growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the U.S. & Canada Tonic Water product market based on product, distribution channel, type, and region:

1. Product Outlook (Revenue, USD Million, 2017 – 2030)

– Carbonated Tonic Water
– Non-Carbonated Tonic Water

2. Distribution Channel Outlook (Revenue, USD Million, 2017 – 2030)

– Supermarkets & Hypermarkets
– Online
– Others

3. Type Outlook (Revenue, USD Million, 2017 – 2030)

– Natural Tonic Water
– Artificial Tonic Water

4. Regional Outlook (Revenue, USD Million, 2017 – 2030)

– United States
– Canada

[Q]: What are the Major Drivers of the U.S. & Canada Tonic Water Products Market?
[A]: The U.S. & Canada Tonic Water products market is driven by the increasing demand for tonic water from premium bars, pubs, and restaurants, along with the growing popularity of craft cocktails. The market is further driven by the growing health awareness among consumers and the various health benefits associated with tonic water. Additionally, the increasing demand for naturally sweetened and flavored tonic water, and the growing demand for low-calorie and low-sugar tonic water are also driving the market.

[Q]: What are the Leading Companies in the U.S. & Canada Tonic Water Products Market?
[A]: Leading companies in the U.S. & Canada Tonic Water products market include Schweppes, Fever-Tree, Q Mixers, Reed’s, and Jones Soda Co.

[Q]: What are the Key Trends Shaping the U.S. & Canada Tonic Water Products Market?
[A]: Key trends in the U.S. & Canada Tonic Water products market include the increasing popularity of craft cocktails, growing health awareness, and the growing demand for naturally sweetened and flavored tonic water. Additionally, the growing demand for low-calorie and low-sugar tonic water, and the increasing demand from premium bars, pubs, and restaurants, are also influencing the market.

[Q]: What are the Major Challenges Facing the U.S. & Canada Tonic Water Products Market?
[A]: Major challenges faced by the U.S. & Canada Tonic Water products market include the high cost of craft tonic water and the lack of awareness about tonic water among consumers. Additionally, the increasing preference for flavored and non-alcoholic beverages, and the presence of a large number of substitute products are also major challenges faced by the market.

[Q]: What is the Potential of Product Innovation in the U.S. & Canada Tonic Water Products Market?
[A]: Product innovation has the potential to drive growth in the U.S. & Canada Tonic Water products market. Companies are focusing on introducing new flavors and product formulations, such as low-calorie and low-sugar tonic water, to meet the changing consumer preferences. Additionally, the introduction of new packaging sizes, such as cans and PET bottles, is also expected to drive the market in the near future.