The popularity of abstaining from alcohol during “Dry January” continues to rise, with a recent Morning Consult poll reporting that 21% of drinking-age U.S. adults are participating in reduced alcohol consumption for this year’s abstention period. However, alongside health goals, participants have been met with an unexpected hurdle: the cost of nonalcoholic beverages.
The price of a nonalcoholic drink, whether purchased at a bar or brought home, encompasses more than just ingredients. Labor is the biggest cost element, as creating a nonalcoholic cocktail often requires more effort than crafting a regular cocktail. The absence of alcohol means there is no way to hide any imbalances in flavor, making the creation of nonalcoholic drinks a delicate art. Despite the misconception that nonalcoholic beverages would be cheaper, Tia Barrett, general manager at Hav & Mar restaurant in New York, explains that the cost of a nonalcoholic beverage is not something to be taken lightly.
Nonalcoholic cocktails that mimic the taste of alcohol face different pricing structures compared to regular alcoholic beverages. Alcoholic drinks are subject to taxes, with a significant portion of a cocktail’s cost going toward state and local alcohol duties. Conversely, nonalcoholic drinks are generally more expensive to produce due to a lack of infrastructure and resources for mass production. Dash Lilley, co-founder of Three Spirit, a nonalcoholic distillery, emphasizes that the creation of nonalcoholic drinks is a specialized and hands-on process, which adds to the cost.
Bars that cater to the growing trend of nonalcoholic drinks have the opportunity to charge premium prices for a crafted product. By offering more than just a Diet Coke or a cranberry juice, bars can tap into the demand for unique and high-quality nonalcoholic beverages. Julia Petiprin, owner of Homemaker’s Bar in Cincinnati, notes that the cost of spirit alternatives is often on par with or higher than regular alcoholic spirits.
Surprisingly, the price difference between regular alcoholic drinks and their nonalcoholic counterparts in stores is minimal, further dispelling the assumption that nonalcoholic beverages would be cheaper. This is because both are manufactured in the same facilities, with an additional production process to remove alcohol. As a result, the cost reduction does not significantly impact the final price for consumers.
Nonalcoholic drinks have become an enticing market for alcohol giants, who are seizing the opportunity to capitalize on the growing consumer base. White Claw recently introduced a 0% alcohol seltzer, offering a premium flavor profile in line with their regular hard seltzer. The pricing of this new product reflects its placement in the regular alcohol section of stores, underscoring the competitive nature of the market.
The demand for nonalcoholic beverages continues to rise, with a significant increase in sales of nonalcoholic beers, wine, and spirits in stores. Nonalcoholic spirits, in particular, have experienced explosive growth, surpassing $500 million in annual sales for the first time. The cost of ingredients commonly used in mocktails has surged more than 20% since 2020, driven by a more health-conscious consumer base.
The decline in alcohol consumption is not limited to Gen Z. Adults aged 18 to 34 have reduced their drinking habits, and binge-drinking among 35-54 year-olds has also decreased over the past two decades. However, not everyone is embracing a completely dry January. Many are participating in a more moderate approach, known as “damp” January, where alcohol consumption is reduced but not eliminated entirely.
The cost of nonalcoholic drinks may come as a surprise to those participating in Dry January, but it reflects the effort, labor, and specialized production processes involved. Despite the higher price, the growing consumer demand for nonalcoholic beverages provides an opportunity for bars and beverage companies to offer premium crafted products. So, as you raise your glass to a healthier start, remember that the price you pay for a nonalcoholic drink reflects the passion and care that goes into creating it.
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