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.

And even in stores, the cost difference between a six-pack of a regular alcoholic drink and the nonalcoholic version of one is minimal: A domestic premium beer six-pack currently retails for about $8.60, while its nonalcoholic equivalent sells for $8.43, according to the Nielsen IQ data.

“Most of the time the price point is relatively similar,” said Kaleigh Theriault, associate director of beverage alcohol thought leadership at NIQ. “And the reason is because a lot are manufactured in the same facilities that alcoholic products are — but then there’s a secondary production process to remove the alcohol, and that’s not necessarily a reduction to produce the cost, which gives a similar price point for consumer.”

Alcohol giants are now fully aware of the opportunity and seeking to capitalize. Last month, White Claw introduced a 0% alcohol seltzer. What distinguishes it from a regular seltzer, according to David Barnett, chief commercial officer with White Claw brewer Mark Anthony Group, is the unique, premium flavor profile that regular White Claw hard seltzer drinkers have come to expect. And since the new product is going to be found in the regular alcohol section, it is going to be priced accordingly, he said.

“Because we are purely focused on marketing this toward the beverage alcohol occasion, and because it will be shelved and placed in beer sections in stores … it will be comparatively and competitively priced,” Barnett said.

Growing consumer base

Further driving up the price is simple demand growth. Nielsen IQ data show sales of nonalcoholic beers, wine and spirits sold in stores and supermarkets — called the “off-premises” market in the industry — climbed 31% over the past year. Within the segment, nonalcoholic spirits are experiencing explosive growth at 94%. For the first time, annual sales have surpassed $500 million, Nielsen said.

Data from the Bureau of Labor Statistics, the same agency that reports on inflation, do not directly capture the cost of ingredients commonly used in mocktails. But under the broader category of “nonalcoholic beverages and beverage materials,” costs have surged more than 20% since 2020, compared with the cost of alcoholic drinks, which have climbed less than 15%.

Lilley, of Three Spirit, said that a more health-conscious consumer is driving the trend — no matter their age.

“The well-being boom is like the eye of Sauron — it’s overlooking everything,” he said. “It’s hard to escape; it’s fashion, it’s powerful … it’s more fashionable to care about tomorrow and to feel good tomorrow than right now.”

Gen Z is leading the way — but they are not alone in easing up on booze. The share of adults ages 18 to 34 who say they drink dropped from 72% in 2001-03 to 62% in 2021-23, Gallup polling results show.

The same data show a decline in binge-drinking among 35-54 year-olds over the past two decades.

‘Damp’ January

Hav & Mar’s Barrett said the share of guests who are doing a completely dry January is actually down this year.

Instead, she said, many seem to be participating in what others have dubbed “damp” January, which involves cutting back but stopping short of cutting off.

That is borne out by additional Morning Consult polling, which found an 18 percentage-point drop in those who said they will not drink alcohol at all this January.

Corban Kell, general manager at Billy Sunday in Chicago, said one of his favorite recent trends is people coming in and having a drink — and then having a nonalcoholic drink after. That also helps dictate the flavor profile of the mocktail.

“Not everyone who drinks N/A has never had a drink — but now it’s a significant portion of N/A drinkers who used to drink,” he said, using shorthand to describe nonalcoholic beverages. As a result, if they can successfully mimic the taste of a regular cocktail, “that’s our biggest success.”