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Last week, 82-year-old actor James Cromwell (Uncle Ewan on succession) stuck his hand to a Starbucks counter in NYC. That it’s something Ewan’s grandson Greg would accidentally do on the show is just a coincidence: it was environmentalist Cromwell’s way of protesting the coffee chain’s surcharge for plant-based milk.
While most people probably don’t care what the human star is from Babe: Pig in the city continues, emphasizes Cromwell’s glue-in a reality for vegans and those with dairy allergies: Things often cost a lot more.
The lactose intolerance tax
In January, Starbucks stores in the UK made all dairy alternatives free. But in the US, Starbucks locations typically charge an extra 70 cents for non-dairy products. When we think broadly about the cost of (essentially) mixing oats and water versus the cost of raising a cow to maturity, the pricing may seem odd. And it’s not just Starbucks that charges a premium.
Across the industry, the retail price of non-dairy, plant-based milk is about twice the price of dairy milk, according to Mintec, which analyzes the cost of food raw materials. So what’s keeping those oat milk prices high? A couple of things:
- Plant-based milk has a more expensive blending and bottling process, along with higher packaging and marketing costs.
- There is a higher demand for milk – 61% of US households mainly drink it, compared to the 23% who opt for plant-based milk – so production costs are more spread out and selling prices are lower.
But while these factors may help explain why plant-based milk is expensive, they don’t fully describe why dairy milk is so cheap. That has a lot to do with the massive government subsidies that the US dairy industry receives every year. In 2015, Big Milk received $22.2 billion in direct and indirect grants. A 2018 Canadian study found that 73% of U.S. dairy producers’ revenues came from government support.
- That support is a lifeline for a beverage with a dwindling U.S. fanbase: Milk consumption has fallen about 2.6% per year over the past decade.
- And lower demand for dairy leads to overproduction: The country currently has a record surplus of 1.4 billion pounds (~900,000 cubic meters) of cheese in storage.
Zoom out: While about 36% of Americans are lactose intolerant (a condition that primarily affects people of color), the US is still living in its Got Milk? era. Since the carbon footprint of cow’s milk is about three times that of alternatives like oat milk, environmentalists like Cromwell hope that removing cost burdens will lead to more people giving non-dairy products a chance.MK