Anant Jangwal and Lavanya Anand wanted a better, all-natural, preservative-free tonic water. They came up with PEER.
The rise of quality tonic waters in India has followed the rise of artisanal Indian gins. Not only is India’s tonic water market booming, it’s getting healthier — with the trend of low-alcohol and zero-alcohol beverages also on the rise, many of these tonic waters are being consumed on their own. However, while many use natural quinine, a key ingredient in tonic water, they also have to use a large amount of sugar to mask the bitter flavour of quinine. PEER, which launched in November 2021 and which sees itself as a ‘luxury’ tonic water brand, claims to solve this problem the healthy way.
PEER is the latest venture of Leocorno Enterprises, a company formed by Anant Jangwal in 2016 that offers consumer brands in India, UAE, and the UK. The company initially launched Vape Stop in India — which became the leading platform for electronic nicotine delivery systems with a 15 percent share of the organised retail market in the category. PEER has two founders: Jangwal, a Doon School and University of Toronto alumnus, and Lavanya Anand, a graduate in Economics from LSR, University of Delhi, and a post-graduate in Finance & Economics from the University of Warwick, UK. Both have worked at Technopak Advisors in the past. Jangwal is also the CEO of PEER.
Even though white spirits consumption (including gin) in India is less than 5 percent of the total IMFL & FMFL market, India is still the fifth largest market for gin in the world, and the premium gin market in India is expected to grow at 11.1 percent CAGR between 2020-2025.
In recent times, Indian consumers have been willing to pay a higher premium and wanting to experiment with a wider variety of gins. About 70 percent of the time when a consumer is having gin, it is with tonic water. Since the market for gin is growing, so is the tonic water market. The total mixer market in India is expected to grow at a CAGR of 9 percent between 2022 and 2025, while the premium tonic water segment is expected to grow at a CAGR of 15 percent during the same period.
After observing the growth in the market of beverages, premium mixers, wines and spirits, Lavanya figured gin was the second-fastest-growing spirits segment in 2019 with many craft Indian and international gin brands making their way. Jangwal and Anand saw an opportunity here. And this led to the launch of the premium tonic brand PEER.
“When you walked into a modern retail store in 2018 in an Indian metro city, you primarily found one option — a canned tonic water priced at ~INR 50 containing as much sugar as any soft drink. Today if you walk into the same store, you will likely see a full section of 4+ premium tonic water brands, available across a variety of exotic flavours, low calorie/sugar content, and priced upward of INR 80 for a 200-250ml glass bottle. The category and consumer preferences have rapidly evolved in just the past two years,” says Jangwal.
“We have been tracking the recent growth and acceptance of premium gins and tonic, a trend that particularly picked up in the UK from 2016 onwards,” adds Jangwal, “However, it was only around 2019 that the premium gin and tonic market saw an uptick in India. Indian consumers were willing to pay a higher premium and wanted to experiment with a wider variety of gins. Additionally, consumers are now even caring about the tonic that goes with their gin.”
Apart from realising that the premium mixer and particularly the tonic water market was a nascent but fast-growing category, PEER’s founders also felt the need to offer a contemporary lifestyle-driven brand to consumers with the lowest calories possible, formulate innovative recipes, and introduce tonics that have more fizz than usual to attain more effervescence in taste.
A fair amount of R&D went into creating the very specific kind of tonic water Jangwal and Anand wanted. “We worked intensely on finalising the tonic recipes that would appeal to the Indian palate, and on creating a contemporary brand positioning. Regular tonic water typically contains as much sugar as soft drinks, which is 8-9 gms per 100ml. Such a high dosage of sugar is added to mask the bitterness of quinine. However, PEER wanted to create a tonic that has superior taste but without the extra sugar and calories. This is one reason why it took PEER 1.5 years, 20+ blind tasting focus group sessions, and numerous ingredient combinations to perfect the flavour profiles while containing 50 percent less sugar than other mainstream tonics,” says Jangwal.
PEER didn’t stop at that. It went a step further and even created a zero-sugar and zero-calorie tonic for diet-conscious consumers, the first and only one of its kind in India. It is naturally sweetened with stevia leaf extract. Stevia leaf has been enjoyed for centuries in South America and Japan as a healthy, natural alternative to sugar, and is suitable for diabetic users as it has no effect on blood sugar. It is preferred over artificial sweeteners like aspartame, which can apparently fluctuate insulin levels. PEER was able to harness the sweetness of stevia, and balance it with quinine and complimentary flavours to craft a tonic which is not overpowering to one’s drink, and with extra fizz.
In addition to having the lowest sugar and calories, PEER’s R&D team wanted to craft tonic flavours without the use of artificial preservatives, colours, and sweeteners, which is often not the case with other commercial tonics. The team was finally able to create an innovative formula that balances the bitterness of quinine with top-quality ingredients and flavours, without adding anything artificial. “To get the right taste without adding excessive sugar or artificial ingredients, preservatives and sweeteners was tricky, but the key to getting the product right,” says Jangwal.
PEER’s current range comprises the regular Indian Tonic, Mint Tonic, Bitter Lemon Tonic, and a Zero calorie & Zero sugar tonic variant. In the first month since its soft launch, the brand sold 6,000 units of its tonic water, and is currently growing at 15 percent month-on-month.
The response from customers in premium retail outlets has been tremendous, according to Jangwal. “Our 0 Cal. Tonic is turning out to be the top selling SKU, followed by Bitter Lemon and Mint Tonic,” he says, “In select modern trade stores we are present in, PEER has already captured a 10-15 percent share of the sales volume in the premium tonic water category, in those stores.”
“Bitter Lemon is one flavour which many people are wanting to drink as is, without mixing any alcohol with it. People find the taste appealing, and like the fact that it is not sweet like conventional lemon-flavoured soft drinks. Many restaurants/bars are listing this variant along with Mint Tonic Water as a non-alcoholic beverage to be had as it is,” he adds.
Anecdotal evidence suggests that the PEER Tonic Water range has received appreciation from top mixologists and F&B critics. Bitter Lemon Tonic & Vodka for example is a known cocktail, and is emerging as a popular cocktail in HORECA venues where PEER is currently being served. Mint Tonic as well as Indian Tonic Water are also reportedly complimenting well with various cocktail/mocktail recipes. “We are placed in The Quorum for example, a members-only club that has curated a special ‘Skinny Cocktails’ menu using PEER 0 Cal Indian Tonic, for members who tend to be diet conscious,” says Jangwal.
The mass tonic water brand in India is Schweppes. It is the leader in the tonic water segment with deep retail penetration. But a gradual shift is being seen in consumer preferences as more and more users prefer low calorie and low sugar tonics that enhance their drinks. There are other premium tonic water brands in the market that have emerged in the last 2-3 years. However, each brand has a different brand story and different flavour profiles.
PEER claims the following USPs:
- PEER has a differentiated brand positioning. While other competitors are positioned as classic brands, PEER is positioned as a contemporary lifestyle brand. This is showcased in the way the product looks and in all its marketing communication.
- PEER is the lowest calorie tonic water brand in India, with one variant having zero calories and zero sugar (sweetened naturally with stevia).
- PEER offers Bitter Lemon Tonic Water, a variant that no other Indian-origin tonic water offers.
- The products contain 15 percent more carbonation on average than the competition, which leads to more fizz and effervescence, possible via a thicker glass bottle.
“In the UK where the tonic water category is more evolved than in India, the premium tonic water segment contributes to a massive 43 percent share by value of the total tonic water market. In India, however, we estimate that the contribution of premium tonic in the total tonic water market is just ~10 percent. This shows the near future growth potential of quality and premium tonic water brands in India. One common characteristic of all premium tonic water brands is that they are all low in calories and sugar. With health consciousness increasing especially among metro consumers, the demand for low- or zero-calorie premium tonics is bound to be robust,” says Jangwal.
For now, PEER plans to launch two new variants per year, and will include known mixers for tequila and whisky. They also have premium beverages in related categories in the pipeline. “The common thread in all these new launches is that they will be innovative and will have low or zero calories,” says Jangwal.
PEER’s tagline is ‘In the spirit of mixing’ and is embossed on their bottles. “It is a mixer that is made to be mixed with good times, with any drink, however you want, with any occasion/activity, with family and friends, with music, with art, with ideas and opinions over drinks” says co-founder Lavanya Anand. All the artisanal tonic waters launched in India in recent times have one thing in common — the bottles are extremely attractive. PEER’s bottle is inspired by the spirit of mixing. “The bottle embossing from thicker lines to thinner lines are to depict that very action or motion of something getting mixed and getting mixed seamlessly. Thus the lines get thinner to a point where you cannot make out the difference. The structure of the label tapers down for the same reason that when you mix two things together you start seeing less of two things and more of one. The label design also has colour gradients that mix with each other,” explains Jangwal.
Another segment that is seeing significant movement and some interesting new launches in India of late is of pre-mixed cocktails. Convenience seems to be the mantra for young adults. RTD pre-mixed G&Ts and cocktails such as hard seltzers are expected to become more popular in the near future in India, looking at trends abroad (incidentally, Beat, a hard seltzer brand, has just launched in India). PEER is watching this segment closely and may enter the category in 2023. According to a study, the Indian mixer category is currently worth INR 3,500 crores, projected to grow to a massive INR 7,000 crores by the year 2030, making it a category to watch.
PEER is primarily an offline brand, sold in modern retail stores, top general trade stores, and HORECA accounts. It follows the conventional brand-to-distributor-to-retailer model. For the online channel, it is a D2C model. It is currently present in Delhi NCR in Modern Bazaar, NEEDS, Le Marche, Nature’s Basket, etc. PEER is also stocked in top stores in Punjab (Ludhiana, Chandigarh, Jalandhar, Amritsar) and Uttarakhand (Dehradun). Since February 2022, PEER is also available in Mumbai and Bengaluru starting with Nature’s Basket outlets. The next markets are expected to be Goa, Kolkata and Chennai.