Why is Alcohol-Free Expensive?
Why is alcohol-free so expensive? It’s a question we often get asked and one we’re very keen to answer! You’ve worked hard to earn your money and you deserve to understand what you’re spending it on.
At CROSSIP, we’re committed to being as open and transparent as possible, which is why, when you ask a question, we’ll give you our honest answer.
Why are non-alcoholic drinks more expensive than alcoholic drinks?
1. Alcohol is a “cheap” way to extract flavour
The exclusion of alcohol makes it a much more challenging process to maximise the aroma and taste of alcohol-free drinks. This is because ethanol is a solvent and subsequently a cheap and easy way to capture aroma compounds and impart complex sensory experiences. Carl has painstakingly developed a product that emulates the sensations of those spirits whilst avoiding alcohol altogether.
We make all of our drinks by patiently macerating and steeping premium and natural botanical ingredients that are bursting with flavour. Each ingredient has been carefully and sustainably sourced to maximise the overall sensory experience, as well as imparting various health benefits.
And, like anything of quality, these ingredients come at a cost! As a rough guide, we require around 3x the weight of raw ingredients to achieve our flavours versus a typical gin, for example.
2. The exclusion of ethanol increases costs on multiple levels
The perception is that ethanol is more expensive than water. However, glycerine and pharmaceutical-grade purified water (CROSSIP's base) are more expensive than equivalent amounts of ethanol (excluding duty) and tap water.
Furthermore, whilst ethanol is a natural steriliser, our non-alcoholic CROSSIP products require refined production procedures to meet food hygiene standards and achieve SALSA Accreditation status, which alcoholic distilleries do not need to invest in.
What’s more, using raw, fresh ingredients presents another challenge from a shelf life point of view. Timing is absolutely critical when producing CROSSIP, as once a sack of hibiscus or lapsang tea is opened, the clock immediately starts ticking. If the natural ingredients have not been pressure cooked, strained, macerated, filtered, blended and bottled within a strict time frame, we are forced to pour that batch down the drain. Not to mention, at each stage we must conduct rigorous testing of the product and process in order to meet the aforementioned standards.
For us to beat the clock, we have had to build bespoke infrastructure to allow us to meet these deadlines. Both the costs of installation and costs of running the entire process from start to finish, are significant.
3. Price and quality are positively correlated
At CROSSIP, we believe in quality. Everything we do, from sourcing fresh and sustainable ingredients to using the best eco-friendly materials for packaging, is meticulously planned and executed.
In the same way that buying a high end bottle of vodka as opposed to a supermarket’s own brand has a wildly different price point, CROSSIP cannot be compared to cheap alcoholic and non-alcoholic spirits as we believe our quality is far higher.
CROSSIP (and the majority of non-alcoholic spirits) need to be compared against the prices of alcoholic spirits targeting the same market: those that prioritise quality over quantity.
4. CROSSIP is actually cheaper than comparable alcoholic spirits, even after the exclusion of alcohol duty
Alcohol duty is calculated at £28.74 per litre of 96% ABV (applied ex VAT), which equates to £5.98 for a 50cl Bottle (CROSSIP's Size) of 40% Strength Alcoholic Spirit (typical gin/vodka).
| Volume | ABV | Alcohol Duty (Applied ex VAT) |
|---|---|---|
| 1 Litre | 96% | £28.74 |
| 50cl (CROSSIP Bottle Size) | 40% (Typical Gin/Vodka) | £5.98 |
A good comparable alcoholic example is a popular premium gin brand owned by Pernod-Ricard, that still retains the values of a small producer and happens to have the same standard bottle size as CROSSIP. Their bottle retails for around £30 and as you can see from the table below, the cost after VAT and Alcohol Duty has been removed, is inline with CROSSIP's cost. In other words, for a comparable premium alcoholic brand, the cost from the alcohol duty is negated.
| Product | RRP (50cl Bottle) | Cost ex VAT | Alcohol Duty | Cost ex VAT & Duty |
|---|---|---|---|---|
| Premium Brand Gin (40% ABV) | £30.00 | £25.00 | £5.98 | £19.02 |
| CROSSIP | £22.00 | £18.33 | £0.00 | £18.33 |
As a rough rule of thumb, for a 70cl Bottle of Alcoholic Spirit (typical size), if the cost of the bottle is higher than £35 RRP, CROSSIP works out as being cheaper for the same volume, even after alcohol duty has been removed.
5. Our production process is long and complex
The process we go through to produce CROSSIP is far more involved than any gin or vodka. We produce over 15 different liquids from raw ingredients, which are then hand-blended to produce one CROSSIP flavour/spirit. The majority of alcoholic spirits do not have anywhere near as much of an arduous production process.
Hibiscus being strained to make our alcohol-free spirits
6. Small niche producers do not benefit from the same economies of scale as big global distilleries
As a startup, CROSSIP is very hands-on and Carl (CROSSIP’s Founder) has developed the alcohol-free production process from start to finish, without the benefits of economies of scale. What this means is that our company is not yet big enough to achieve the lowering of costs caused by increased production. Alcohol-free drinks are still relatively new to the market, although they are certainly rapidly growing in popularity - we can’t wait to see what’s to come for the 0% industry!
7. Fixed overheads
Just like alcohol brands, running an alcohol-free business means we have to pay for the day-to-day running costs. This includes expenses such as property taxes, salaries, government licences, and rental costs for The Steep (where we create all of our drinks).
8. CROSSIP is unique
Whilst we’ve mentioned gins and vodkas a fair bit in the above points, we would like to iterate that we are not trying to be a whiskey or gin, unlike other alcohol-free brands. Thus, in contrast to those non-alc brands, we would argue that CROSSIP cannot be directly compared to alcoholic spirits as we're trying to be something entirely different.
Why is CROSSIP more expensive than other non-alcoholic spirits?
1. Less is more
Commonly, our peers recommend serving their non-alcoholic spirits in a 50ml measure, whether that's with a simple mixer or part of a more complex serve. Our spirits have such intense flavours that 25ml is often more than enough to get that sensory experience, hence your bottle lasts far longer.
2. We create our alcohol-free spirits from raw ingredients
Sacks of raw ingredients are delivered to The Steep for every production run, including fresh wormwood, hibiscus flowers and ginseng. Many other non-alcoholic spirits use essences (concentrated flavourings) to speed up and cheapen their production processes. Of course, we could also have created our alcohol-free products entirely from essences to make them less expensive but we’re committed to creating truly authentic tastes.
3. CROSSIP’s alcohol-free spirits are handmade
All of our spirits are (currently) hand-blended by Carl himself. He has been involved in every step from the sourcing of raw ingredients to the finished products; nothing has been outsourced (with the exception of bottling).
4. Carl made his own playbook for the creation of macerated alcohol-free spirits
From the outset, there was no playbook for how to make macerated spirits. Of course, this argument could also be extended to new alcoholic brands, but essentially, we were starting from a point of very little knowledge and had to make a lot of mistakes as we developed, tested and optimised our product recipes and manufacturing processes, which other alcohol-free brands did not have to endure. The comparison could be made to the pharma industry where some drugs may cost 50p to manufacture but charge hundreds of pounds per dosage to cover the R&D process.
5. We give back to social causes
We give a proportion of our revenue to various social causes close to our hearts, including Alcohol Change UK, CALM, PAPYRUS and CentrePoint.
Click here to find out more about our social causes.
So, is alcohol-free expensive?
All things considered, we hope you can agree that alcohol-free is worth every penny. Expensive to some? Quite possibly. But we (and our incredible customers) believe that CROSSIP drinks exude opulence and sophistication, so they taste expensive too!
Plus we're not just talking our own story; “Producing a high-quality, no-alcohol spirit involves a costly and complex process,” says Brandy Rand, Chief Strategy Officer, IWSR Drinks Market Analysis. “Although a consumer barrier exists around the higher prices for no-alcohol spirits, growth is evident within this less mature segment as consumer awareness increases.” - Music to our ears!!
And, if you’re still not convinced, why not give us a try? Go on, we dare you.