This story is part of STYLE's Inside Luxury column Why do non-alcoholic “spirits” cost so much, sometimes even more than their alcoholic counterparts? I travel quite a bit in my job consulting CEOs of luxury and lifestyle brands, at least in the pre-Covid-19 days. My typical schedule would shuttle me continuously back and forth between cities like Los Angeles, New York, Paris, Dubai, Moscow, London, Shanghai, Hong Kong, Seoul and Tokyo; 20 to 30 overseas trips per year were the norm when there was no lockdown. View this post on Instagram A post shared by Cocktail Society (@aboutdrinksandbars) on May 11, 2020 at 11:42am PDT One thing I started to notice all around the globe has been the emergence of non-alcoholic drinks. Whether you are in a glitzy bar in Shanghai or a restaurant in Paris, mocktails seem to be more commonplace. Are mocktails the new cocktails – and can you taste the difference? Even on aeroplanes, the drinks menu started to change. In January 2019, Virgin Atlantic launched the first no and low alcohol cocktail menu on board of a commercial plane service and their non-alcoholic Red Sky at Night became a traveller’s favourite. View this post on Instagram A post shared by The Seedlip Company (@seedlipdrinks) on May 6, 2020 at 9:26am PDT In August 2019, Seedlip, the self-proclaimed world’s first non-alcoholic spirit, was acquired by Diageo, a company that has been historically focused on alcohol. Seedlip’s non-alcoholic beverages are priced around US$30, on par or even more expensive than some of the alcoholic spirits they aim to replace. The acquisition is a sign that times are changing. View this post on Instagram A post shared by Mocktail Life (@mocktail.life) on Apr 29, 2020 at 9:35am PDT And this is what many people wonder: when you order a non-alcoholic spirit in a restaurant, why are they sometimes more expensive than their alcoholic counterparts? Why would a mocktail cost more than a cocktail? Wouldn’t logic suggest the opposite? Most countries have steep alcohol taxes, which should make the booze-free versions significantly cheaper. So why the prices? 4 delicious and easy recipes to make while self-isolating The intuitive feeling that something “free of” should be cheaper than the “contains” version is showing us how complex pricing is. And that – especially when it comes to luxury – the common logic does not work. View this post on Instagram A post shared by L Jai (@_lolajai) on Mar 28, 2019 at 1:02pm PDT Take water as an example. Bling H2O famously became the water to be seen with in some of the most extravagant hotels and nightclubs. The price of a bottle could easily exceed the price of a bottle of wine. And we’re talking about water. Although the brand’s claim to be the “best tasting bottled water in the world”, in its essence, it’s not the taste people are paying US$50 upwards for. It is the story of the brand and the glamour it exudes. The story and its associations create the perceived value, not the product. View this post on Instagram A post shared by Monica C | Liquid Culture (@liqculture) on May 19, 2020 at 8:50am PDT Consequently, to signal the “magic”, makers of high-end non-alcoholic drinks, as well as restaurants and bars, focus on a unique mastery to create drinks that indulge you. They concentrate on experience-creation instead of the omission of alcohol as their main selling point. They talk about alchemy and use rare and exotic ingredients. Bottles are gorgeously designed, and the non-alcoholic drinks served in even more unusual colours than their alcoholic counterparts. Are millennials and Gen Xers shunning alcohol for good? And more often, they don’t imitate an alcoholic drink but provide a completely different angle. They intrigue the imagination by stimulating the taste buds in a more intense way as many alcoholic beverages can do and focus on well-being. And they reassure the fitness and health-obsessed young beautiful clientele that their personal-trainer-led high-intensity gym workout results perfecting their surgery-optimised bodies won’t be ruined by excessive sugars of alcoholic drinks. Not to mention the hangover-free morning. View this post on Instagram A post shared by Mocktail Life (@mocktail.life) on May 3, 2020 at 9:22pm PDT Additionally, many of these new drinks provide a spice-induced energy kick instead of the numbing tiredness so many people feel when they have an alcoholic drink. In its essence, non-alcoholic “spirits” have become the luxury drink. They excite the senses, inspire and create memories. They are the innovative replacement preferred by a younger, more health-oriented generation. And by this, they are desired by older consumers, too. In a recent consumer sentiment study, we wanted to understand which behavioural trends are emerging as a result of the Covid-19 pandemic. One trend was evident, particularly in Asia: health as a new luxury. This indicates that the time for non-alcoholic drinks has just begun. I expect many new brands to emerge, with new ideas, introducing new tastes, exciting consumers far beyond what today’s brands are doing. Consequently, prices will go up as these brands will create extreme value. Luxury is not about the cost and the price. It is always about the ability to create value at first. The price is a reflection of the willingness to pay. In other words, it is a result of how successful brands can create extreme value for consumers. Those non-alcoholic drinks that can’t excite won’t be sold, even at a lower price. But those, that surprise us, may become tomorrow’s luxury drinks at much higher price points than what is imaginable today. Want more stories like this? Sign up here . Follow STYLE on Facebook , Instagram , YouTube and Twitter . Help us understand what you are interested in so that we can improve SCMP and provide a better experience for you. We would like to invite you to take this five-minute survey on how you engage with SCMP and the news.