Why do I pay more for soy?

Happy New Year!

It’s a question I get often – why do I pay more when I have a soy flat white, as opposed to a “normal” flat white?  The answer is very simple – the raw cost of soy far exceeds the raw cost of milk, and as a cafe, we’re passing that directly onto you as the customer.

I’m not prepared to post what we pay for soy or milk, as it’s taken many years of negotiation with our suppliers to get the pricing we’re comfortable with now.  However, to illustrate my point, I will use pricing from Countdown, which is higher than what we pay, but soy vs milk are at a similar proportion.

Compared side by side:

vitasoy

milk

Soy is $4.19 per litre, milk is $2.20 per litre – 47% cheaper than soy.

Using the flat white example, everything else that makes up stays the same – the shot of coffee, the takeaway cup.  Milk/soy makes up the biggest part of a flat white, so it’s understandable that the raw cost of a soy based beverage is much higher than it’s milk equivalent.

Some cafes may not charge extra for soy – all they are doing is spreading the cost of their soy customers to all their other customers.

We offer three size coffees, but only charge $0.90 extra for soy.  It was too difficult to vary the soy surcharge for small, regular and large, so we settled for the average between the three sizes.

 

8 comments

  1. Bill Bennett · January 6, 2015

    Presumably there’s also the aggro of handling a non-standard form of milk. OK, that’s not going to be much, but because less people buy soy coffees, it could mean more stale soy gets tipped away. A small cafe like yours probably doesn’t measure this, it’ll only be cents, but I bet one of the major chains could break down the total cost of soy.

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    • tuihanacafe · January 6, 2015

      We tend to run three different jugs – a large one for standard milk, and smaller ones for trim and soy milk. Based on our purchasing of milk and soy, about 10% of our total customer base opt for soy (at the recent gather event, 7% of all coffees were soy).

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  2. Mark Heseltine · January 6, 2015

    That’s interesting. The supermarkets often subsidise the price of regular milk because milk is what supermarkets call a “known value item” – something that shoppers know the prices of and are therefore more price sensitive to. Supermarkets basically subsidise the cost of KVIs like milk and bread and then load their margins back into other goods that consumers find harder to track. I’m not saying that soy milk doesn’t cost you more just pointing out that the supermarket/milk price comparison is not necessarily a valid one to draw on. I personally prefer cafes that don’t nickel and dime me on choices like soy, I’d rather a cafe just load the cost of soy into its regular pricing (as you say, some do this), charge a bit more and focus on service. I heard that the cost of labour far outweighs the cost of ingredients in a cafe, is that true?

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    • tuihanacafe · January 6, 2015

      RE my comparison, the prices are a lot higher than what we pay, however the multiple is the same – our soy is double the price (per litre) than what we pay for milk.

      With labour costs, I’m going to cover this in a future blog post 🙂

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  3. Mike Marner · January 7, 2015

    I got really into soy coffees over in the states, but since returning home cannot stand it. Also do not find any real value in milk. So if adding the price of milk to the coffee, does that mean this cost is also inherently removed from non-milk coffees like Americano, Espresso etc? Also, does the cost of ice come into it? Often I would opt for an Americano over ice.

    Good explination/post btw. Like this idea of cafe running blog.

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    • tuihanacafe · January 12, 2015

      Hi Mike, Cafes should charge less for American/Espresso (we do). Ice is a cost as we buy it by the bag, however it’s pretty minimal.

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  4. geekgirllivingfit · January 8, 2015

    I don’t mind paying extra for soy, but why don’t cafés have the option of lactose free milk? Anchor has been doing one for over a year now and it’s only about 50c/L more, but I’m yet to find a cafe that has it as an option.

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    • tuihanacafe · January 12, 2015

      It’s a demand thing. If there’s not much demand (which I’m thinking is the case with lactose free milk, happy to be proved wrong however), we’ll end up throwing most of it out, negating any profit that’s made from it.

      Have you tried asking you favourite cafe whether you can bring in your own milk?

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