The hottest trend in drinking remains not drinking alcohol at all.
A recent Morning Consult poll shows 21% of drinking-age U.S. adults said they were participating in some form of reduced alcohol consumption for this year's "Dry January" abstention period, up six percentage points from 2023 and the highest level recorded since the group began polling in 2021.
Much has been made about record-low vice activity among younger adults, especially Gen Z — and this includes lower alcohol consumption. Combined with a graying of America phenomenon that is making older generations more health-conscious, the overall alcohol market is “trending towards non-alcohol consumption and moderation changes in drinking habits,” market research group Nielsen IQ reported in December.
Yet a common experience has emerged among this new cohort of teetotalers, industry experts say: sticker shock at the price of their nonalcoholic beverages.
While nondrinkers may have been aiming for some financial savings along with health goals, “it’s definitely not your wallet” that is going to get relief, said Tia Barrett, general manager at Hav & Mar restaurant in New York’s Chelsea neighborhood.
“The biggest feedback and one thing I always have to explain is the cost of a [nonalcoholic] beverage,” Barrett said.
Price breakdown
The price of a given drink, whether purchased at a bar or brought home from a store, comprises much more than just its ingredients. The largest cost element is labor.
In fact, says Barrett, the work involved in creating a nonalcoholic cocktail served at a bar often exceeds that of creating a regular cocktail, since regular spirits represent a much more stable base to build a flavor profile around, she said.
“With alcohol, you can hide and mask the flaws if something’s a little imbalanced," she said, "whereas with [nonalcoholic cocktails], if there’s something sweet, there’s no hiding the sweet. It’s not just diluting or shaking or stirring — it’s going to be sweet. So understanding what goes into it is something I wish people could understand. It’s not easy to create something that’s not a lemonade.”
The pricing structure for a nonalcoholic cocktail that mimics the taste of alcohol (as opposed to simply a juice, soda, or tea) has important differences compared with a regular alcoholic beverage, said Dash Lilley, co-founder of Three Spirit, a nonalcoholic distillery.
For one thing, Lilley said, alcoholic drinks are subject to taxes. A 2021 report from the drinking culture website Punch estimated that 10% of a cocktail’s cost in many U.S. cities goes toward various state and local alcohol duties.
But in general, Lilley said, alcoholic drinks are actually cheap to produce thanks to economies of scale and industrial production resources that don’t yet exist, in most cases, for nonalcoholic spirits.
Large beverage companies, he said, "can drive down the cost and produce as cheap a liquid as possible" if taxes were not a factor.
"With nonalcoholic (cocktails), because there isn't massive infrastructure that can make it, it’s more a niche game; a specialist product to make, and which is often made in smaller batches. It's more manual, hands-on — and that adds to cost," Lilley said.
He also said that, with the growing non-alc trend, bars would be leaving money on the table not to create a premium product for which they can charge more.
“If you’re just letting people order a Diet Coke, or a cranberry juice, or a juice-heavy mocktail that you’re only charging $4 or $5 for, you’re missing out on an opportunity to make a drink that’s crafted,” he said. “If you put more love into your nonalcoholic menu, you can charge more and make more and earn more profit.”
Julia Petiprin, owner of Homemaker's Bar in Cincinnati, said spirit alternatives are oftentimes more expensive than the bar's regular alcoholic spirits.
"Our cost is right on par — and sometimes higher — than a full-proof cocktail," she said.
