Why Do Coffee Shops Charge More for Oat Milk?

Why Do Coffee Shops Charge More for Oat Milk?

👋 Hi, I'm Nicholas Roberts. I create and perform music and write this daily blog about creativity, culture, and my life.

I live in Los Angeles with my wife and golden retriever.

Email me: hello@nicholasroberts.io

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If you’re a vegetarian or vegan, or even just enjoy oat milk in your coffee, you’ve probably run into this familiar dilemma — getting charged extra for oat milk or “alternative milk.”

I spend a lot of time in coffee shops.

Because I work from home, the best way for me to get out of the house without renting a co-working space or a studio is to head to a coffee shop.

My go-to drink is an oat-milk latte. And whenever I order it, it’s usually about $0.50 more expensive than a regular latte. What gives?

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Read more: My favorite coffee shops in LA.

Simply put, oat milk is more expensive than dairy milk because oat milk factories aren’t large enough to take advantage of similar economies of scale, they can’t keep up with the surge in demand, and the government subsidizes the production of dairy milk, making it cheaper to produce and purchase.

Let’s dig into it.

Oat milk is better for than the environment than dairy in almost every way.

  • It uses less land to grow oats than to raise cows.
  • It uses less water to process them and turn them into milk than to keep cows hydrated.

Oat milk is one of the most sustainable milks to produce, using less water to process and grow than alternatives — cow’s milk uses 13x more water to produce than oat milk.

But despite all of the macro advantages, oat milk still suffers from one core problem: economies of scale.

Because the factories that produce oat milk are minnows in comparison to the whale-sized factories that process dairy milk, oat milk has a long way to go to catch up to the efficiencies of producing millions of gallons of dairy milk at a time.

Not to mention, dairy farms get lots of help from the government to stay in production. Dairy is big business.

The government actively incentivizes farmers to produce cow’s milk instead of other crops or goods.

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These subsidies are part of a larger program to send milk to public schools, food banks, and other non-profit organizations.

Per calorie, dairy milk provides a lot more nutrition than alternative milks. It makes sense that it could be scaled up and distributed widely.

If oat milk was the same price as dairy milk to the consumer in the places they order it the most, like coffee shops and restaurants, demand will increase.

That’s already happening.

If the demand increases enough, it can become cheaper and cheaper to produce large quantities, driving the price down for everyone.

This raises the question: Could we reach a point where oat milk becomes just as affordable - if not more so - than dairy milk? That's a future I'm looking forward to.

Today, I’m giving a shoutout to Kindness and Mischief Coffee, a shop in Eagle Rock.

They have a sign that proudly declares, “No extra charge for alternative milks. Since day one.” It's refreshing to see businesses like these leading the way and challenging the status quo.

Change may be slow, but every choice we make can help push it forward.