If you want a cow’s milk latte at Stumptown, you’re going to have to ask for it. Once, alternatives like oat milk required the type of explicit request you’d see satirized on a Portlandia episode and came with a hefty surcharge. But as of early this year, oat milk is the default at the coffee chain—which has locations in Oregon, New York, California, and Japan—and all milks are priced equally. Now plant-based options account for roughly 70% of all beverages that contain milk at Stumptown. And of those, oat is the clear favorite, making up 75% of nondairy drinks.
Stumptown isn’t the only brand betting big on alternative milks. Panera Bread and Pret a Manger both ditched vegan milk surcharges in early 2020. That same year San Francisco chain Philz stopped selling 2% dairy milk altogether as oat milk sales surged. And in May last year, Blue Bottle removed upcharges on plant-based options and made oat the default across stores as part of a commitment to go carbon-neutral by 2024—and because more than half of its customers were ordering plant-based milk anyway, a spokesperson says. The knock-on effect was huge: The coffee chain saw a 45% increase in plant-based milk sales and a 58% increase in oat milk orders.
Prices for alternative milks might be coming down at some spots. But chances are, most of your plant-based lattes at one-off shops and small chains still get hit with a surcharge. So can we expect our venti caramel oat milk lattes to cost less anytime soon? Do Stumptown, Blue Bottle, and the other companies adopting flat pricing mark the start of oat milk’s more affordable era? In short…probably not. Here’s why.
Why is oat milk so much more expensive than dairy?
Oat is fast becoming the people’s milk. This probably isn’t so surprising to anyone who’s laughed along with one of Oatly’s self-deprecating ads, which are plastered around US cities. Since the Swedish milk brand with a cult following landed in stores and coffee shops around the States back in 2017, sales surged by 1,200% in the following years. Still, despite the explosive popularity of plant-based milks in the US over the past few years—and decreasing dairy milk sales—they’ve always struggled to compete with cow’s milk in one very important category: price.
No matter where you grocery shop, the cheapest oat milk costs more than the cheapest cow’s milk. The least expensive store-bought whole milk I found while analyzing various offerings at major supermarkets was 2c per ounce, from Walmart. Almond milk was 4c per ounce and oat was 6c per ounce. That doesn’t sound like much of a difference. But assuming an 80% profit margin, which is what coffee shops are probably shooting for, those figures quickly become 36c, 72c, and $1.08 respectively, for a 10 oz latte.
It’s easy to see how upcharges can get out of hand. One Twitter user told me they saw a fellow customer “in a white pleather trench and slippers snag a large, triple-shot oat milk latte… for just over $10.” Another had “major sticker shock” in San Diego when her cinnamon-honey oat milk latte cost $9.50. I get hit with an extra 85c for vegan milks at my local Starbucks in Salt Lake City, and a Dunkin in Ohio slaps 62c on top of a small oat milk latte. The practice is so normal that I don’t even flinch while swiping my card anymore.
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.”
Many cafes offer a standard surcharge for non-dairy alternatives, regardless of the type of milk or the drink size. Across-the-board fees like this are likely calculated similarly to flat pricing: “They may be propping up other products that have less of a profit margin,” suspects Ballinger. In other words, I’m sorry to say that your cheaper almond milk latte could be subsidizing my more expensive oat milk latte.
Will oat milk lattes get cheaper over time?
While it seems genuinely necessary for some smaller coffee shops to up-charge for alt milks, larger chains with massive order volumes are likely, at least in part, capitalizing on the hype around oat milk. Years of surcharges have trained us to think plant-based milks are worth more, and so some stores are going to charge us accordingly—simply because they can.
Even as plant-based options become more popular around the country, it’s unlikely customers are going to cop a break on their lattes. Oat milk is only getting more expensive and harder to get a hold of, says Ballinger. That’s due to increased demand over the years, inflation, rising energy and production costs, and the war in Ukraine, which has choked the supply and driven up the price of various grains.
Burke, Maman’s beverage director, doesn’t see much relief coming soon either: “We try to do our best to offer our guests all the selections they want without having to pay $12 for a latte,” she says. “But in the current economic landscape the cost of products—both alternative and dairy—are constantly creeping up.”
Milk prices at coffee shops remain a bit of an enigma; both somewhat understandable and also completely opaque. One thing is for sure: As long as inflation continues to impact every aspect of life, and dairy remains more affordable than plant-based options, pricey oat milk lattes aren’t going anywhere. Sadly, though, neither is my caffeine habit.