Dear Diary Coffeehouse is a vegan coffee shop that opened at the beginning of the Corona pandemic. As a new business, we did not qualify for any relief programs, so surviving the pandemic forced us to find ways to cut costs and increase margins real fast! Additionally, serving a plant-based menu introduced a separate set of challenges.
The lessons we’ve learned have been invaluable. We’re just at the start of our journey, and we invite you to follow along if you are thinking of opening a coffee shop, if you want to transition your business to going vegan, or if you’re just curious.
I personally don’t like it when articles string the reader along, so I’ll just summarize the main takeaway for you now.
Plant milk is really hard on coffee shop margins. Grocery store plant milk is more affordable than barista grade plant milk, but it doesn’t steam well.
A solution is to buy grocery store plant milk, add soy lecithin, and shake vigorously! Jump to full instruction
There are other solutions, but I’m sharing this one because it’s the easiest.
The cost of plant milks
Plant milk is hard. It’s probably the most difficult aspect of operating a vegan coffee shop. The commercial stuff is extremely expensive, the house made stuff doesn’t foam nicely, and absorbing the cost of plant milk for your customers is a good deed that’s too nuanced to make a good story.
The solution is to make milk in-house. Keep reading for the whys and hows.
Why most coffee shops up-charge
Cow milk in 12 oz latte costs about $0.20, whereas plant milk costs $0.60.
Most coffee shops tack on a $0.50 – $0.75 fee to offset the cost of plant-based milk. This may seem like an unfair burden to vegans and people with dairy allergies, but coffee shops really depend on those drink margins because their margins in other categories (like food) can be really low.
Why is cow milk so cheap? Today, anyone can grab a gallon of cow milk from the grocery store for $3.38. This price has risen extremely slowly compared to other commodities because the diary industry has received rounds of government subsidies since World War II (history.com). In addition to this, distributors are required to buy back milk that is going old, so coffee shops don’t risk losing revenue to expired product. Finally, there are dairy farms everywhere, and gallons and gallons of milk are always in transit. Shipping costs are relatively low because the cost is spread out.
Why is plant milk so pricey? By contrast, a gallon of barista grade plant milk is between $9.00 and $10.00! Most commercial plant milk manufacturers are on the West coast, so the cost of shipping palettes and palettes of heavy little 32 oz tetra packs across the country is pretty high. Coffee shops depend on distributors to purchase and warehouse palette minimums. Wasteful tetra packs have become a necessary component of plant milk production because there is no better safeguard against product expiration at the moment. Thousands of gallons of plant milk wait in warehouses for months before becoming lattes.
We totally understand why coffee shops up-charge plant based milks, but we also know the exorbitant cost of plant milk is avoidable.
Absorbing the vegan tax and the importance of choice
Vegan consumers have come to expect the vegan tax: they are prepared to spend more on commodities because avoiding animal suffering is really important to them.
Conscientious consumers are happy to pay more for products that come from ethical sources. However, choice is key. No one wants to feel like they are being controlled, even if it is for a higher cause.
Dear Diary Coffeehouse only serves plant based milk, so we effectively took away choice. Most of our customers discover us because we’re nearby, not because we’re vegan. For this reason, we felt the need to keep prices on par with other neighborhood coffee shops, even though our costs are substantially higher.
Absorbing the cost of plant milk for customers is a complicated form of do-goodery. This paradox became apparent to me one day when I was feeling sad that Dear Diary Coffeehouse didn’t have enough profit to donate to good causes. But then I realized we actually donate a ton of money in the form of up-front costs: plant milk, but also eco-friendly takeout containers.
I’m still unsure of how to talk about this. It’s much easier to tell a simple profit donation story, and I hope to do that one day! It would be all sorts of wonderful to both prevent the suffering of cows AND donate to charities!
Tetra packs are not vegan friendly
The other reason vegan coffee shops are better off making plant milk in-house is tetra packs. We are vegan because we don’t want to cause suffering. Ironically, barista grade plant milk only comes in 32 oz tetra packs. They aren’t recyclable in most cities, and they add to shipping volume, weight, and cost. Their only redeeming quality is the increased the shelf-life of plant milk. Nonetheless, the knowledge of how many tetra packs we throw into the landfill is a real bummer.
I emailed every barista milk manufacturer I could google to find an alternative solution. As of January 2021, there isn’t one.
This might affect non-vegan coffee shops even more than vegan ones, actually. Why would a non-vegan coffee shop sit around and blend batches of house-made milk when most customers are ordering cow milk? The up-charge on plant based milks more than covers their costs. Tetra packs may be the most convenient and cost effective solution for shops that don’t rely on plant-based milk, but they are still literal garbage at the end of the day.
Reducing costs so we can pay people
The main reason Dear Diary Coffeehouse is shifting toward making plant milk in-house is people. We are not going to skimp on barista wages so we can afford barista grade plant milk. It doesn’t make sense emotionally, and it doesn’t make sense from a practical standpoint either.
As I mentioned earlier, many vegan coffee shops—certainly us among them—attract lots of non-vegan customers. People discover us because we’re nearby, and then they come back because they like our interior, our baristas are nice, they found a favorite food on the menu, etc. Some people come because we are vegan, but a greater number of people don’t mind that we’re vegan.
That said, when the pandemic subsides and business picks up, we will need to grow our staff. Austin has A LOT of coffee shops to choose from, and our wages need to be competitive if we are to attract a great team. Plus, we want to pay people well.
We won’t be able to keep up with other coffee shops if our milk continues to cost 3x as much as theirs though! In a way, we are thankful to the pandemic for buying us time to learn how to reduce cost. Right now, everyone is open half days and operating with skeleton crews. We have been given a fuzzy timeline for figuring this out.
What to do about it
At the top of the article I recommended adding soy lecithin to grocery store plant milk as a fast, simple, low effort way to reduce costs. How much to add depends on the plant milk that you are altering.
Why milk foams
Soy lecithin is great because it is a fat-derived emulsifier that you can probably find at your local health food store.
Baristas run into two snags with grocery store plant milk: either it isn’t fatty enough or it isn’t foamy enough.
Let’s talk about fat first. Grocery store milk and homemade milk recipes aren’t concerned with cappuccinos. In fact, usually people want less fat and less calories. If you try adding fat to a plant milk, though, it will either float to the top or destroy your foam or both.
The second part of the equation is protein. When milks foam nicely, hydrophilic protein and hydrophobic fat hold hands with the water molecules and dance around.
Okay, last factor: emulsification. Simply shaking (or blending) a solution of fat, protein, and water might not be enough to get them to form a foamy friendship in your pitcher. This is where an emulsifier helps. To be honest, I know emulsifiers encourage molecular hand-holding, but I don’t know why. I’m simply sharing what I’ve learned so far through internet research and kitchen experiments.
I think in most cases you can get away with simply adding lecithin to your existing plant milk base. Lecithin is a fat-based emulsifier, so it’s a double duty sort of tool. If that doesn’t do the trick, a little protein powder might help you achieve the balance you need.
I recommended soy lecithin simply because it’s the easiest to acquire and most commonly used. Soy is pretty great, actually, but it carries a stigma in some markets. I think it just had the misfortune of being one of the first plant milks to make its way into grocery stores, and the dairy industry fought against it really hard.
How to choose the right ingredient ratios
Let’s start by choosing the right plant milk base. What do your customers order the most? My guess is your answer is either oat or almond. Oat milk seems to be popular in urban areas where word spreads. Almond is popular in suburban areas where Starbucks is most people’s first introduction to coffee. That’s my theory anyway.
Okay, second question: what is the most affordable source of this milk type in town? Are you willing to make your own milk from scratch, or is it easier to doctor up consumer grade plant milk from the grocery store?
Now that you’ve picked your milk, it’s time to experiment! I would start by adding 0.1 gram of soy lecithin for every ounce of plant milk. So, for example, try adding 3.2g of soy lecithin to 32oz of milk, shake it all up, and try foaming it with your steam wand. If your milk is oily, use less next time. If it’s not very foamy, try adding an equal amount of plant protein next time.
I’m sorry that I cannot offer you a specific recipe, but I don’t know what you’re working with. Also, while I’ve had good success with soy lecithin, I haven’t had a chance to experiment with all the food chemicals on my list.
I hope this gets you off to a good start! Don’t be discouraged—you are a small business owner because you are curious, resourceful, and determined. You have everything it takes to achieve success without compromising your principles. Good luck, fellow vegan coffee shop owners!