Why your booze-free drink costs just as much as the alcoholic kind

On a Friday night in Ottawa's Hintonburg neighbourhood, Sophia Marco scans the drink menu at a local bar.

Around her, friends laugh at the cocktails and beer, but she has her eye on the mocktail section, where prices range from $14 to $15 a glass.

Marco stopped drinking alcohol in 2020. She didn't like how she felt, but she still enjoys the evening parties and a well-prepared drink.

Since she's switched to non-alcoholic drinks, what surprises her most is that mocktails “are generally about the same price as cocktails.”

Across Canada, the soft drink market is booming as more people look for fuss-free ways to socialize. But no alcohol doesn't necessarily mean cheaper.

“When I first started ordering cocktails or mocktails, I was shocked at first,” says Lyuba Khalil. “I thought alcohol was the most expensive thing. But now I’m just like, everything’s expensive these days.”

The whole process, no evidence

Producing soft drinks is not necessarily easier or cheaper than producing traditional ones.

Mathieu Gagnon, co-founder of Sober Carpenter, a Montreal brewery specializing in non-alcoholic beer, says the process is much more technical than one might think.

“We actually use the same ingredients that are used in beer,” he says. “We simply stop fermentation before it gets above 0.5 percent.”

This method, called arrested fermentation, cools the beer to near freezing to stop fermentation. The process requires precision to preserve flavor and aroma, Gagnon said. “That’s the most expensive part, not the alcohol,” he says.

Although Sober Carpenter beer is labeled as non-alcoholic, it contains less than 0.5% alcohol – a negligible amount that meets Canadian labeling standards.

Making a good zero or low ABV cocktail or spirit can be even more challenging.

Rudy Aldana, co-founder of Parch, an agave-based mocktail brand, says moving away from alcohol means producers will have to create complex flavors from scratch.

“Alcohol is a very cheap ingredient,” he says. “It helps preserve it. It also adds flavor. So when you remove it, you have to replace it with other ingredients that will add the same level of complexity.”

He says Partch uses botanicals and natural extracts to mimic the taste and texture of traditional cocktails—all of which add to production costs.

“Alcohol can account for 10 to 20 percent of the cost of an alcoholic beverage,” he says. “So when we create something from scratch, it can easily double the impact.”

Scale also plays a role. Gagnon says smaller breweries like his have limited production runs compared to larger brewers.

“When you brew traditional beer, you might need a batch of 250,000 cans,” he says. “We make smaller batches because the demand isn’t there yet, and that increases the cost per unit.”

Perception has a price

Apart from production costs, perception also plays an important role in maintaining prices.

David Soberman, a marketing professor at the Rotman School of Management at the University of Toronto, says one of the reasons soft drinks cost as much as their alcoholic counterparts is psychological.

“If you want something to be perceived as a substitute, you want it to be about the same price,” he says. “It might be perceived as lower quality and not very good if it cost about a third of the price.”

Jordan LeBel, who teaches marketing at Concordia University's John Molson School of Business, says marketing and packaging also play an important role in shaping how consumers perceive value.

“The costs are still quite high,” he says. “You have to pay for ingredients, bottles, shipping and shelf access.”

He adds that as the category grows, brands also have to compete for attention.

“If you want to reach consumers, you need to invest in marketing, advertising, maybe hiring a celebrity spokesperson or something else,” he says. “This explains why you end up with a market price that is equal to, and sometimes slightly lower than, alcoholic options.”

The future is at hand

Both experts say that as the category grows, prices may eventually come down, but not dramatically.

“Typically, as an industry ages, there is increased consolidation—players buying each other out, gaining economies of scale,” says LeBel. “You may see fewer options on shelves because we may discontinue some, trim the portfolio, or drop brands that aren't selling well.”

Soberman says competition may eventually lead to some price reductions, but zero-proof drinks will likely remain premium products with prices to match.

“I'm not sure the goal is to compete with alcoholic versions on price,” he says. “When you do that, it's hard to stay profitable. So probably the best strategy is to compete on taste.”

While the prices may not be ideal, Khalil says choosing a mocktail is about more than just the cost—it's about the experience and community involvement.

“I don’t drink, but I have a lot of friends who like to drink, and I don’t want to be left out,” she says. “Sometimes it's nice to pamper yourself. Sometimes you just want something beautiful and unusual.”