Milking profits

Nondairy alternatives are becoming an essential for coffeehouses.

For years, Starbucks publicly said that it wouldn’t add a nut milk or other dairy alternative at its cafes. After all, the coffee giant already offered soy milk for those with dairy allergies. But things changed in February when Starbucks heard and responded to its fans’ call for another option, adding coconut milk to its roster. “Providing an alternative to dairy [milk] and soy is the all-time second most requested idea from mystarbucksideas.com; more than 84,000 people voted for this idea,” says Erin Jane Schaeffer, communications manager at Starbucks. Milking profits

But adding an alternate milk isn’t as easy as slapping it on the menu as a simple substitution. “All milks froth slightly differently,” says Schaeffer, who says Starbucks allowed time to develop and hone recipes and methods for frothing coconut milk before offering it in stores.

Black Tap Coffee put almond milk on its original menu when it first opened in early 2012 in Charleston, S.C. The challenge, says owner Jayme Scott, was finding one that steamed properly. “Some get too nutty when steamed,” he says. So he experimented with several different suppliers as well as a time-consuming, housemade version before settling on a brand he liked. And since opening, he’s seen nondairy milk sales increase about 25 percent, 60 to 70 percent of which is almond milk.

When Dunkin’ Donuts wanted to expand its nondairy options, it couldn’t overlook a stat it had heard from a supplier: “Almond milk has become a more popular nondairy option than soy, based on U.S. sales,” Chris Fuqua, vice president of brand marketing at Dunkin’ Donuts, recounts. So the Canton, Mass.-based operator added it at 75 percent of its stores nationwide last September, coinciding with the brand’s expansion to the West Coast.

Restaurateur Chris Pastena saw similar anecdotal evidence at his Oakland, Calif., concept Chop Bar. “We seem to have more and more requests for almond milk, yet soy seems to be about the same,” says Pastena. He added almond milk partially for competitive reasons—even though it costs more. “I did notice that other coffee shops were offering it,” he says.

Like Pastena, many operators find that the popularity of more-expensive nondairy milk options helps them manage the bottom line. “Almond milk costs more than whole milk, skim milk and cream, so most locations charge guests to add it to their beverage,” says Fuqua, though

Dunkin’ leaves pricing decisions to franchisees. Starbucks, too, charges guests an additional 60 cents to add coconut milk, as it does with soy. And thus far, people are paying.

While safety is a concern, operators seem to be relying on guests with nut allergies to self-monitor. “Guests with tree-nut allergies or sensitivities should be advised not to choose [almond milk],” says Fuqua. That’s part of the reason Starbucks went with coconut milk over other nondairy options: lower risk. “Starbucks is unable to guarantee an allergen-free environment in our retail locations due to the potential for cross contact, so … we did consider the potential for allergens with tree-nut milks,” says Schaeffer. Showing an excess of caution, Starbucks prepares coconut milk in nondairy pitchers separate from the soy and dairy milks, she says. Still, there’s no guarantee. But weighed against customer satisfaction and potential
sales—along with the high-end direction the coffee culture is heading—it’s proving to be a risk worth taking.


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