Why Oat Milk Lattes Are Still So Expensive

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It might sound nonsensical that the juice of a grain costs more than the milk of a huge creature—but it’s pricier to grow crops and blend and bottle them than it is to raise and milk a cow. “Milk is pretty close to what comes out of the cow,” explains Carolyn Dmitri, a food systems economist at New York University. Almonds and oats and soybeans “need more processing to become milk, so that means higher production costs.”

That doesn’t explain why dairy is so cheap, though. Cow’s milk is still almost three times more popular than plant-based options, but its fan base continues to decline year over year, as the customer preferences at chains like Blue Bottle and Stumptown suggest. Plummeting demand has created a surplus of milk (and cheese) in the US, which drives prices down even further. And dairy is just unnaturally cheap to begin with, because taxpayer dollars have been propping up the industry in various ways for more than 70 years.

Coffee shops have to figure out how to deal with these price discrepancies. For a 12oz latte from Maman, a bakery and cafe chain with locations in the northeast US and Canada, you’ll pay an extra 75c if you want oat, almond, coconut, or soy milk—and an additional $1.25 for Tache pistachio milk. “There has to be a surcharge as they are more expensive products,” says beverage director Caitlin Burke. The least expensive alternative milks cost the store “just about double the price” per ounce of milk. Those costs drift further apart when you look at more “boutique” milks, like pistachio, which is four times more expensive to buy wholesale than dairy milk and twice as much as options like oat and almond. 

Is flat pricing actually cheaper?

Stumptown and Blue Bottle both declined to explain how they calculate their flat price for all milks, but Burke suspects appropriate profit margins are built in. At Stumptown, all 8 oz lattes now cost $5. Back in 2018, before surcharges were eliminated, a spokesperson recalled the same drink costing $4 with a 75c surcharge on non-dairy milks. 

That means you’re paying a dollar extra now for a cow’s milk latte, and 15c more for oat milk. Depending on what you’re ordering, this flat pricing structure isn’t necessarily saving you money on your drink. Of course, inflation over the past five years should be factored in, but it’s easy to imagine how bigger profit margins (on dairy, for example) might be making up for smaller ones (on oat). 

It’s harder for one-off coffee shops, which operate at much smaller scales, to pull off flat pricing. At The Mud Club in Woodstock, New York, 70% of customers still order whole milk, says owner Gray Ballinger. He says the store isn’t “making a killing” off the $1.50 up-charges in place for all plant-based milk drinks, but wouldn’t be able to stock so many options otherwise. “If we purchased more [of each milk] at a time we would get a decreased price,” he says. Big chains that have eliminated extra fees “can afford to do so, while smaller companies are forced to constrain their ordering to reflect demand.” 



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