Why are non-alcoholic spirits so expensive?

Anyone who has paid £26.50 for a bottle of Seedlip will have asked themselves why, when the duty on alcohol can represent as much as 40% of a drink’s cost, is the price so steep?  The obvious answer would seem to be that the producers are building in brand value by setting a high price for their product, a price that replicates (and often exceeds) what a spirit would cost.  But there is more to it than that.

Ethanol, the chemical constituent of alcohol, is an excellent base for extracting and carrying flavours.  Water, the base of non-alcoholic drinks, is not.  Makers of non-alcoholic spirits may have to use as much as ten times the quantity of herbs and other botanicals to achieve the same results.  They may have to employ the more expensive cone method of distillation to preserve the delicate flavour, and they often distil each herb, spice or other botanical separately to achieve a purity of flavour.  Oils are soluble in alcohol; they are not in water.  If the producer wants to include, say, citrus flavours in the mix, the process of adding the oils into the drink is much more complicated.  Some manufacturers use alcohol in the manufacturing process to infuse the flavours and then have to include the extra step of removing the alcohol; this, too, builds in additional costs.

Certain producers use expensive flavourings too.  While essentially the dominant flavour in any alcoholic drink is the alcohol – made from relatively cheap ingredients (sugar, grapes, hops, grain) – non-alcoholic spirits rely on blending a range of flavours from botanicals, woods, herbs and spices. These may not come cheap.  Everleaf, for example, uses vanilla and saffron in their drinks, two of the world’s most expensive spices.  And while the infrastructure for brewing and distilling has been understood for centuries, some of the processes for squeezing, macerating and infusing the ingredients for these drinks has to be developed from scratch, with new equipment to match.  Ben Branson, the CEO of Seedlip defended his prices in an interview in The Grocer explaining that it takes six weeks to make a bottle of Seedlip and that they distil every single-origin ingredient separately: ‘I can tell you that it costs more to make a bottle of Seedlip or Aecorn than most alcoholic products on the market’.

Another thing to consider is that alcohol is a preservative; there is no issue of anything going off in alcohol.  That’s why you can buy wine in Vietnam with a snake dropped in it. Water is not self-sanitising (the snake would rot), and so the manufacture of non-alcoholic distilled drinks involves a lot more refrigeration, which again builds in higher costs.

Then there are the promotion costs: the world of non-alcoholic spirits is expanding exponentially; it is reckoned there are already over a hundred non-alcoholic spirits in the US, all desperate to build a market share and gain their piece of the growing but young market. Building brand awareness doesn’t come cheap and educating punters to consider a non-alcoholic drink when they go out to a bar or restaurant takes a lot of careful work. It’s going against centuries of drinking culture.  One way to add appeal is to put production costs into beautiful bottles and labels:  Fluére’s elegant fluted pale blue glass, Clean G’s hexagonal green bottle. More expense, compared to the classic straight-up-with-slim-neck of your average whiskey, gin, vodka or rum bottle.

And finally, yes, there is the bit no business likes to admit: high prices, comparable to the cost of a spirit, make it clear that this is a drink to be taken seriously. They confer brand dignitas and say that the producers have put in thought, time and work to create a proper drink.  It’s perhaps no coincidence that Ben Branson, who established the original high price with Seedlip, was previously a luxury brand creator.

For now, the high prices seem here to stay, at least in the niche brands which sell from their own websites or in specialist shops.  Most prices are in the £18 – £27 range.  But Gordons 0% has bucked the trend by selling at £12-14 and Lidl has produced a distilled non-alcoholic drink called Cerocero that retails at £9.99. Many distilled non-alcoholic drinks promote offers with significant reduced costs: Clean G is currently offering its non-spirits at £16, reduced from its normal £19. It will be interesting to see if the high prices sustain themselves over time.

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