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Image: Archi Banal
Image: Archi Banal

KaiMay 29, 2023

Why are cafes still charging extra for coffees made with non-dairy milk?

Image: Archi Banal
Image: Archi Banal

There are myriad reasons why an increasing number of us are opting for dairy alternatives in our coffee orders – and that comes with a hefty fee.

It’s such standard practice that most of us, in our daily caffeine-hungry haze, probably take it for granted. If you’re lactose intolerant, trying to avoid dairy for environmental reasons, vegan or just prefer the taste of, say, coconut milk, it’s likely you’re accustomed to paying a rather hefty additional fee for your coffee order. In fact, coffee lovers across the country who forgo dairy are likely to be handing over an additional 50c to a dollar to make the swap from cow’s milk to soy, almond, oat or coconut milk. So how fair are these additional charges?

There is, of course, a very simple financial reason behind why cafes so often charge more for alternative milks: non-dairy milks tend to be at least slightly more expensive than cow’s milk. But whether that warrants the steepness of the charges you’ll find listed on the menu at your local cafe is debatable. 

While not a completely accurate reflection, as cafes are likely to buy in bulk, if you take prices of milk from the supermarket, a one litre bottle of Anchor blue top milk costs $3.09, whereas one litre of Boring Oat milk costs $5 – a $1.81 difference between the two. A litre of milk makes around six flat whites, which means that an additional 30c charge per coffee would likely be enough to cover the increased cost – significantly less than the 50c (often a full dollar) standard, not to mention that when you order a coffee with alternative milk, you’re paying on top of a price that presumably has the cost of dairy milk worked into it. 

It’s admittedly a rare find, but not every cafe in the country charges this extra fee for alternative milks. Since opening in November last year, Brother Cafe in Hawke’s Bay has charged customers exactly the same no matter which milk they order from their varied lineup. Whether you go for almond, macadamia, oat, soy, coconut or cow’s milk, you won’t pay a cent more.

Brother Cafe owner Halle Evans explains that she incorporated the charges into her business planning from the beginning. “Alternative milk is far more expensive, don’t get me wrong,” Evans says. “But because I planned it this way from the start, I was able to sink that loss and cover it by mixing those costs into other products instead.” 

Her reasoning is twofold: partially it came from a discomfort around charging those with allergies or intolerances more than those without, as well as a desire to make sustainable choices more accessible to her customers.

“I’m not intolerant to dairy, so it’s not something that really resonated with me in that sense,” she says. “I just thought, I don’t think it’s really fair to charge people if they do have an intolerance, it just didn’t sit right with me to do that.” 

Beyond that sense of solidarity with lactose-intolerant flat white lovers, Evans likes the idea that by removing the barrier of cost, she might tempt those who ordinarily choose cow’s milk to consider other options that might be more sustainable.

Evans estimates around 40% of Brother customers opt for alternative milks. “The number of alternative milk coffee sales we do, I could make a lot of money if I charged more,” she says. “It’s a constant debate between my accountant, my husband and me, but I’m just standing really, really firm that it’s not something I’m ever going to charge for, and I’ll never change.”

Halle and Bryn Evans at their cafe Brother (Images: Supplied)

Lactose intolerance affects more of us than you might think. Primary lactase deficiency, which is the main cause of lactose intolerance, is thought to affect around 8% of New Zealanders, and with substantially higher rates among people of colour, including Māori, Pasifika and southeast Asian peoples – arguments have been made overseas that alternative milk surcharges are inequitable because of this ethnic disparity when it comes to lactose intolerance. 

While alternative oat milks might often cost more to buy in pure monetary terms, there’s a more philosophical question around whether the social and environmental “cost” of dairy compared to alternative milks could or should be considered within that equation of how much customers are charged for their coffees.

Overseas studies have found that the carbon footprint of cow’s milk is around three times that of plant-based milks. But that’s not to say plant-based milks are without their own pitfalls. While evidence has shown plant-based milks produce lower greenhouse gas emissions than cow’s milk,​​ the environmental footprints vary wildly between these cow’s milk alternatives. For example, the growing demand for soy, which is mainly used for animal feed rather than milk, is driving deforestation in the Amazon. And then there’s almond milk, which uses more water than soy or oat milk, with a single glass requiring 74 litres of water.

Morgan Maw, who founded Boring Oat Milk, says there’s space to think more holistically about the price we pay for alternative milk in our coffees. “When it comes to food, the true cost, and those hidden costs which include greenhouse gas emissions, food waste, cost to human health and animal welfare, that stuff is never taken into account in terms of what’s represented in the retail price that you see on the shelf,” she says. “I would love it to, but in a capitalist world that’s just not how it’s done.”

Local research commissioned by Boring Oat Milk and The Agricultural and Marketing Research and Development Trust and released earlier this year found that oat farming releases just 7% of the greenhouse gases emitted by dairy farming per litre of milk, and that land use for farming oats is more efficient, with oats using 70% less land than dairy to produce a litre.

Founder of Boring Oat Milk Morgan Maw (Image: Supplied)

Bottles of Boring’s oat milk sit at the higher end of the price pecking order among both dairy and alternative milks, something Maw puts down largely to economies of scale. “In terms of the actual cost of the product itself, and the cost of it to cafes, a lot of it is down to the fact that dairy has been around for decades and has so much more technology and just the pure scale that’s in it,” she says.

And while other oat milks might sometimes cost less than a dollar more than dairy options, and therefore be more accessible, Maw explains that there’s a fine line between making the product cheaper and forgoing on other values, pointing to Boring’s use of more expensive New Zealand oats rather than oats imported from Australia, the company’s use of pricier PET packaging over cheaper but less sustainable Tetrapack, along with the relatively small size of the operation. 

Beyond simply relying on cafe owners removing fees, it’s at a structural level that Maw believes real change needs to occur in order to see prices eventually come down.

“In an ideal world, before it even gets to the cafe, all foods would have a system where it does take into account that true cost to human health, animal health and environment,” Maw says. She thinks of it in terms of excise taxes on alcohol, or the way sugar taxes have been introduced overseas.

“It will be interesting to see in the next 10 years, as plant-based milks become more developed and mature, what that does in terms of the price,” she adds. “So much change comes from consumers themselves – the more they buy of a certain product like plant-based milk, the more you’re able to make, and then you get those economies of scale, and efficiencies that allow it to come down in price.”

Some cafes that currently charge more for alternative milks are beginning to reflect on whether change is due. Tom Worthington is the owner-operator of two cafes in central Christchurch. At both spots, Tom’s and Estelle, customers can switch their coffee order from the standard dairy milk to either oat or soy for an extra 80c. Those 80 cents have been weighing on Worthington’s mind lately though – especially since he reckons around half his customers order their coffee with alternative milks.

“It is hard out here,” Worthington says of the hospitality industry, “and I will always be OK with someone’s decision to be charging extra for something that does cost more.” But looking forward, Worthington can imagine our coffee culture shifting to a place where a more holistic and complex equation for milk costs is normalised and where being charged extra for alternative milk might become a thing of the past. 

“Perhaps us cafe owners are a bit stuck in the habit of charging extra,” he says. “It could be time to have a good think about why we are.” 

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