Types

Aperitif Bitters
An alcoholic aperitif obtained from the infusion of bitter herbs, aromatic plants and fruit in alcohol and water. Campari and Dubonnet are  types of aperitif bitters.

Digestif Bitters
A digestif is an alcoholic beverage that is drunk just after a meal as an aid to digestion, hence the name, which is borrowed from French. If a digestif is a bitters, it will contain bitter or carminative herbs that some believe will aid digestion. In contrast to aperitifs, digestifs usually contain more alcohol. They are usually bitter and sweet, sometimes syrupy, typically produced by macerating herbs, roots, flowers, bark, citrus peels in alcohol, either neutral spirits or wine, mixing the filtrate with sugar syrup, and allowing the mixture to age in casks or in bottle. Dozens of varieties are commercially produced, the most commonly available of which are Italian Amaro.

A typical Amaro is flavoured with gentian, angelica, and cinchona, as well as lemon balm, Lemon verbena, juniper, anise, fennel, zedoary, ginger, mint, thyme, sage, bay laurel, citrus peels, liquorice, cinnamon, menthol, cardamom, saffron, rue , wormwood, elder , and centaurea minor. Many commercial bottlers trace their recipe or production to the 19th century. Recipes often originated in monasteries or pharmacies. Amari are typically drunk neat, with a citrus wedge, on ice, or with tonic water. Similar liqueurs have traditionally been produced throughout Europe.

Cocktail Bitters
Cocktail bitters commonly have an alcoholic strength of up to 45% ABV but are normally consumed only in small amounts when added as a flavouring agent. Common ingredients in bitters include angostura bark, cascarilla, cassia, gentian, orange peel, and quinine. The flavour of both Angostura bitters and Peychaud's Bitters derives primarily from gentian, a bitter herb. Bitters are prepared by infusion or distillation, using aromatic herbs, bark, roots, and/or fruit for their flavour and medicinal properties.

Medicinal bitters
This is alcohol that's been heavily flavoured with herbs, peels, bark, spices, and bitter-tasting roots.  Many brands were developed in the 1800s as elixirs that were supposed to cure indigestion, jaundice, and a variety of other ailments.  Due to these "medicinal" properties, bitters allowed drinkers to avoid both taxes and social stigma.  Today, they're used to flavour cocktails, coffee, and various dishes.  Don't add more than a dash or two as bitters can easily overpower other flavours.