Cost and value perception

[martin]

The Guardian posted a story on January 20, 2025, called “The great non-alcoholic rip-off: why a booze-free drink costs as much as a pint”. The story is beer-centric, but briefly digresses into spirits, and touches on the differences in scale, production costs, and tax burdens.

An excerpt:

“It’s not that simple,” says Rob Fink, the founder of non-alcoholic brewery Big Drop.

Non-alcoholic drinks are no cheaper to produce

Brewers say that non-alcoholic drinks are no cheaper to produce despite the duty saving because drinkers are paying for the technological investment and the added time necessary to produce alcohol-free beers and spirits that actually taste good.

Luke Boase, the founder of Lucky Saint, says it costs more to produce his beer than it would a full-strength lager.

“We use amazing ingredients, and it’s a six-week brewing process. Then we have all of the additional costs to then remove the alcohol.”

Ed Gerard, chief commercial officer at Mocktails, a maker of non-alcoholic cocktails, says: “Most non-alcoholic versions have to go through an additional process, either removing the alcohol if it was brewed as alcoholic in the first place, like a beer, or if they’re brewing it as non-alcoholic in the first place, it takes longer.”

In the past, brewers creating a non-alcoholic beer would brew a regular one and then boil off the alcohol. Either that or they would make a beer with a weak yeast to prevent fermentation into alcohol. Neither of these methods were renowned for creating delicious beers.

Now, there are a great array of methods brewers can turn to in order to produce better tasting drinks. Methods include reverse osmosis, in which beer is passed through a semipermeable membrane that filters out the alcohol, and vacuum distillation, in which an artificial vacuum is created to allow the beer to be boiled at a lower temperature to retain more flavour.

“Those old school ones, where you would just brew a beer and then you boil the alcohol off, you have one of those and it tastes like mouldy cabbage,” says Pete Brown, a beer expert and author. “With the new ones, there’s such a snap change in terms of flavour.”

I find it remarkable that we now have non-alcoholic beers and wines that are perfectly drinkable. I would call out Brooklyn Brewery’s and Leitz’s examples, respectively, as exemplary. They’re not “cheap”, but also not particularly expensive.

I remain utterly unconvinced by any of the “non-alcoholic spirits” out there, but the non-alcoholic programs by the likes of Dave Arnold (Existing Conditions, Bar Contra) have proven that faux-spirits are unnecessary to making amazing-tasting adult drinks that are alcohol-free. The cost of those drinks is as high as the alcoholic ones, and I’m sure that value perception remains a chronic issue with them.

[francois]

I was talking with the creator of Almave, the agave non alcoholic spirit Casa Lumbre launched with Lewis Hamilton last year (and sensibly priced quite close to José Cuervo’s Silver Tequila in the UK), and he was saying that the technology and know-how for non alcoholic spirit was still very much in its infancy, which explains why most of the products on the market are unconvincing. It’s going to take years and, yes, that costs money.

But…

A British producer was saying a few months ago that alcohol duties on his 45% gin amounted to £9,96 for a 70cl bottle that retails below £25. Lyre’s non alcoholic gin retails at £24.

I note that in the UK, Martini & Rossi Rosso vermouth costs £12,75 while Vibrante, the non alcoholic version, costs £10,00. Everleaf, one of the best non alcoholic apertivo out there, costs more than double that for 50cl. Obviously, Martini & Rossi have the advantage of huge volume, longstanding know-how and established distribution channels. Still…

Honestly, if your “technological investment”, “added time” and “additional process” wipe out the huge head start the duties give you, maybe you’re in the wrong business. No wonder so many brands of that supposedly booming market disappear.

[GoodSpiritsNews]

Having tasted dozens of non-alcoholic “spirits”, I can honestly say that near none of them are even close to the full octane versions. However, I feel that the prevalent marketing of these with names that include the words whisky, gin, tequila, etc… does more harm than good. Because in the end it’s all about taste and perception. Think about some food recipes that were made during wartime rationing in England that did not actually use the main ingredient that they were trying to replicate. No one makes those anymore, and no one wants them (unless they are interested in historical reenactment of such).

I find that the best N/A products are ones that are unique unto themselves and taste unlike anything else.

[BookofMorten]

It’s ultimately the same thing that happened when vegan foods started hitting the shelves in super markets. Vegan “meats” everywhere!

The problem with this is the same as the “mocktail” argument of why that’s a bad name. You’re trying to re-create something that you are also actively are trying to avoid which in a sense defeats the whole purpose. It’s a poor attempt at capturing the existing market too quickly by convincing drinkers (or meat eaters…) that it’s easy (and fun…) to make the switch.

The best vegan dishes aren’t replications of meat dishes with a direct swap and neither are non-alcoholic drinks. No one has ever had a Gimlet or Martini with a direct swap of Gin for a non-alcoholic “spirit” and thought it was delicious.

The value perception is tied to the original product. By making a “non-alcoholic spirit” we are “removing” an element that the customer believes they’re paying for. In the same way a “meatless lasagna” will be perceived as inferior as we are “removing the meat”.

In comparison, an “urad dall curry” or “raspberry sherbet smash” are perception neutral because they are more standalone.

By labelling products according to their opposite counterparts it’s hard to convince consumers that the process or creation has actually been harder and costed more.
I think beers and wines will be able to achieve neutrality in perception (and price) quite quickly, but spirits are unlikely to get there for a very long time unless a new category is created that isn’t based on the rhetoric of “removing” alcohol from cocktails or spirits.

Maybe reverting to the original “Mixed Drinks” instead of “Cocktails” is a good first step?

[fredyarm]

Vegan food can provide what you need in terms of flavor, protein, and nutrients. I am definitely surprised when the veggie burger is more expensive on the menu than the meat one, but costs are costs.

Mocktails give you something that tastes good and gives you something to have in your hand as you talk and socialize. But I wouldn’t compare the effects of alcohol to the effects of meat in terms of how it modifies mind, mood, and body processes.

We have one regular who comes in and averages 2-3 mocktails per visit (ranges from 1 to 4), but most folks have 1 N/A beer or drink unless they’re with a group ordering rounds. The financial impact of the N/A drinker is much less than that of a booze drinker regardless of the drink cost getting closer, but you definitely need options for the N/A drinker to welcome larger groups and provide inclusive hospitality.