Should non-dairy cost more at the coffee shop?
Should non-dairy cost more at the coffee shop?
A review of the Federal Milk Marketing Order
2-min read
Dunkin’ was slapped with a class-action lawsuit last month for charging customers more for non-dairy.
Some Nor Cal-ers are upset they have to pay more for alternatives like oat, almond, or soy in their lattes – so they are suing.
Does alt-milk cost more than dairy?
Unequivocally, yes. Ounce for ounce, alternatives like oat and almond cost more than fluid dairy. But to compare the costs of dairy milk to any other alternative, you have to consider the whole supply chain, not just the ingredient cost. To understand the dairy supply chain is to go back to the USDA Federal Milk Marketing Order, which I will briefly explain.
But first, let’s understand the allegation against Dunkin’ and a bit of the coffee shop landscape as it relates to this issue.
Fancy coffee shops charge $5 and up for lattes
When you order a latte at swanky coffee shop chain Blue Bottle, you’ll get an oat milk latte. Blue Bottle made oat milk the default in 2022 as part of their carbon goal – making them different than any other national coffee shop.
And they can do that because they are charging $5.
If you want dairy milk, you have to specify and it’s no extra charge. But if you want almond milk, it’ll cost you $0.75 - $1.25 more.
Being a fancy coffee shop, they use fancy almond milk: made by Goodmylk, it has a much higher concentration of almonds than typical almond milks, with no gums or fillers (it’s honestly really delicious).
Dunkin’ is doing the opposite – charging for dairy substitutes. They are not so fancy, so charge $3.69 for a basic latte. The non-dairy upcharge is between $0.50 and $2.15.
“The core allegation is that Dunkin’ discriminates against individuals with lactose intolerance and milk allergies, both of which are recognized disabilities, while simultaneously benefiting financially from these surcharges” says VegNews.
Back to dairy supply chain and cost --
Milk 101
Most of the dairy milk in the U.S. falls under the USDA’s Federal Milk Marketing Order (FMMO). The FMMO creates market stability for milk supply and prices. It’s a super efficient program that pools milk and uniformly sets prices depending on grade. The result is affordable and stable prices for consumers and farmers.
The FMMO came out of the Great Depression. The primary source of nutrition for infants and children was – and still is – milk. Supply was threatened during the Depression, so a program was put in place to ensure access. It was a matter of public health.
The program is still in existence today, and controversial because some say it benefits dairy farmers at the expense of taxpayers through subsidies. It’s also currently under reform.
The point is, dairy milk is relatively stable and cheap throughout the nation, therefore businesses like coffee shops can confidently factor in costs when determining prices. Not so for alternatives whose supply and cost are subject only to market forces such as crop volume and global demand.
All my best,
Jennifer
___NEWS______
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