Is a ‘green tax’ on cow milk alternatives justified?
Soy, almond, oat drinks cost less than what you’re being charged in cafés
After being vegetarian for about 15 years, I recently adopted a vegan diet. A heavy coffee drinker, giving up milk in my latte was hard enough, but I didn’t realize that it would also be so damn expensive.
Local cafés in my neighbourhood (the Plateau, in Montreal) charge a premium of $0.25 to $1.15 for milk alternatives such as soy, almond and oat. Even Starbucks is charging an extra $0.92.
In most cases, this is way above the extra cost they incur for using non-dairy milks, as the following calculation shows:
In order to make a fair comparison between the price of cow’s milk and its alternatives, I used the website of a Montreal wholesale seller, Mon Laitier, which specializes in selling products in high demand by third-wave cafés.
The cost of one 946 millilitre carton of milk alternatives of the popular brand Pacific Foods is between $3.83 for soy milk and $4.33 for oat, almond and coconut milk.
Since the size of a small latte is eight ounces (236 ml), of which about two thirds is milk, each 946 ml carton can be used for exactly six cups. This means that the cost of milk in a nondairy latte is between $0.64 and $0.72 per cup.
Now, let’s compare that to traditional cow’s milk, which is cheaper, but not by a lot.
Mon Laitier also sells highquality whole milk under the brand name Henrietta, which is very popular in the Montreal coffee scene.
The cost of a two-litre carton of Henrietta milk is $5.25, which can be used to prepare approximately 12 small drinks. This translates to $0.44 per cup for the cost of cow’s milk.
To conclude, the extra cost for using milk alternatives varies between 20 cents for soy milk and 28 cents for oat, coconut and almond.
So, why do coffee shops charge a premium of $1.15 instead of $0.25 for a soy latte?
The simple answer is that buying sustainable, environmentally friendly products is a hot trend, and businesses found an opportunity to make an extra buck on the back of customers.
Indeed, the demand for milk alternatives is exploding. In short interviews I did with eight baristas in my neighbourhood, they estimated that between 33 and 55 per cent of customers now avoid having cow’s milk in their coffee.
Oatly, based in Sweden, the largest producer of oat-based drinks, doubled its revenue and increased the number of litres it produced by 81 per cent in 2020 alone. It also completed an IPO and is worth more than $10 billion (U.S.) on the Nasdaq stock exchange.
Maya Ata, the owner of the Standard, a trendy café with four locations in Montreal, estimates that the demand for milk alternatives has doubled over the past two years.
But when I asked how she can justify a $1.15 extra charge for milk substitutes, she wrote that the “cost her supplier charges is higher,” that “they kept coffee drinks prices constant for a long time” and “that their extra charge should be compared to Starbucks.”
So is the non-dairy milk craze simply a fad, or are alternative milk products environmentally better than drinking cow’s milk?
The research is quite clear when it comes to this question. A study published in 2018 in the prestigious journal Science concludes that the environmental impact of producing dairy milk is much worse than that of vegan milk when it comes to emissions, land use and water use.
Specifically, a glass of dairy milk results in almost three times the greenhouse gas emissions of any non-dairy milk, and oat milk uses seven times less water than cow’s milk.
In addition, some people choose to avoid dairy products not only due to sustainability considerations, but due to cow milk sensitivities. In fact, it is estimated that lactose intolerance rates are as high as 70 per cent of the global population.
The case of milk alternatives is, of course, just one example. It seems like there is a “green tax” — an unjustified extra cost — on many sustainable, healthy and organic products. This is somewhat similar to the socalled “pink tax,” or “genderbased price discrimination,” where products for women and girls were priced higher than the equivalent products for men and boys.
Customers should resent the introduction of a green tax by businesses. Politicians and consumer advocacy groups should help them in their fight.
With so much effort directed to the fight against climate change, it’s not the time to punish consumers who do not want to consume animal products and are adopting a more sustainable lifestyle. Overcharging for soy lattes is opportunistic and unacceptable.