Because the ingredients cost maybe less than a cent more and they change nearly a dollar for it.
Can you show your work on milk alternatives costing Starbucks less than a cent more?
No. They cannot. They cannot charge for tap water. They cannot charge for using the bathroom. They can’t lock you in the Cafe and charge you to leave. They can’t advertise for one price and sell another. They can’t charge half price for milk that’s gone rotten etc. There are lots of things they can’t do. This is another.
Quite the specious analogy, but I fail to see how kidnapping is equivalent to charging a different price for a different product.
Open a grocery app. Search for oat milk, dairy milk, almond milk, soy milk. Alternative milks don’t really cost more than dairy anymore.
Does Starbucks shop at grocery stores? They likely buy non-consumer packaged milk, think 5 gallon plastic sacks, and cases of consumer packaged milk alternatives. Not to mention extra man-hours and extra refrigerated space.
Visit a Starbucks. They pull a gallon plastic milk jug from a drinks fridge under the bar when making drinks.
While there might be slight discrepancies between grocery prices and wholesale prices, the sheer size of Starbucks means they’d save on all varieties of milk (not just dairy) and I seriously doubt they pay 50 cents more per cup for alternative milks.
the sheer size of Starbucks means they’d save on all varieties of milk (not just dairy) and I seriously doubt they pay 50 cents more per cup for alternative milks.
You literally have no idea though, unless you work in supply chain for Starbucks. You’re guessing. Do they do their purchasing as a single corporation from one dairy farm, I doubt it. Plus you ignore the additional hours and need for refrigerated space. There’s more to consider than just cost per unit. Also if you use less there’s a greater chance of spoilage.
We will never know the exact numbers. However, from reported figures we know that $SBUX, $DNKN, $PNRA, $MCD all have similar margins across gross, ops and P&L (50-70, 10-20, 10-20 respectively).
the goal of all fast food centers is to produce a unit cost as close to $1, preferably lower, as possible and we also know from reported figures that 1 cent is the expected associated labor cost of a starbucks unit.
Knowing that the price of milk on commodities market is 16.42hwt or 1 cent / oz, knowing that SBUX coffee beans are 7cent/oz we can extrapolate that suitable extra costs for alternative milks must be in the single figure cent range.
Further supported by how if you are to go to a post-supply-chain-shipping-and-procurement wholesale vendor then the price of oatly barista edition oatmilk is 10c/oz and we can very safely assume that SBUX gets it much MUCH cheaper so we at least know the ceiling is $0.1
So, while I was exaggerating for effect in my original reply, the actual numbers- even if they are paying the same price as I would walking into a wholesaler (EXTREMELY unlikely):
price of 16oz cow milk latte: $4.25, unit cost $1, milk cost 1c
So in the extreme worst case scenario for starbucks they are making an extra 6% profit per ounce on oatmilk over cow milk, so not at cost-to-price parity.
And that’s the worst case, they are probably making more.
So in one comment you’ve gone from less than a cent to possibly 10 cents. And the price increase isn’t a dollar, it’s 70 cents.
Your calculations don’t seem to include increased refrigerated space required, additional man hours, increased inefficiencies, and possible increased spoilage. The price increase does not strike me as unreasonable given the circumstances.
“So while I was exaggerating for effect in my original post”
exhibit b:
“extreme worst case scenario”
exhibit c:
“almost a dollar”
waaaay ahead of the gotchas and objections my dude.
Additional space isn’t an overhead rolling operating cost, and per unit is probably infestisimal. Additional man hours is a weird objection, do starbucks even track for “reaching for a carton slightly further away”? I imagine the time savings for moving a carton 4" closer are measured in the thousandths of seconds
oat milk has a longer shelf life (6 months) than cow milk (5 days) and when opened too (10 days vs 2)
The price doesn’t have to strike you as reasonable or not because we are discussing whether we think starbucks are making a profit on oat milk or not. To me it’s obvious they are making more of a margin on oat over dairy, whether or not that is good/bad, reasonable/unreasonable, fair/unfair is an entirely different conversation
Additional space isn’t an overhead rolling operating cost, and per unit is probably infestisimal. Additional man hours is a weird objection, do starbucks even track for “reaching for a carton slightly further away”? I imagine the time savings for moving a carton 4" closer are measured in the thousandths of seconds
Either they added a new refrigerator or made room in an existing refrigerator. To make room something needs to be removed, less room for regular milk means more trips to a walk-in to restock. More SKUs means more time on ordering and inventory. If they added a refrigerator then there’s added electricity costs.
oat milk has a longer shelf life (6 months)
I meant once opened, which is more like a week. Which means they likely all need day dots put on them. More man hours (or minutes, or seconds)
The price doesn’t have to strike you as reasonable or not because we are discussing whether we think starbucks are making a profit on oat milk or not.
They’re a business, I assume they make a profit on everything. Oat milk lattes would seem to be a strange loss leader.
again I already addressed those objections in my post before you commented. Shelf space is cheap, refrigeration already exists and is not an added cost, expanded refrigeration is a single point cost that is quickly paid back by sales, I dont think adding day dots is putting starbucks out of business.
they already have separate supply chains for paper cups, crockery, beans, syrups and milks — I know this because I worked on a project that used their paper cup supply chain a few years ago. Plus they already have an oatmilk supplier so they’re not even adding an additional sku.
I assume they make a profit on everything
yes, the point of this thread is “should companies by allowed to significantly profit more on allowances made for not being ablebodied” && “is charging more for dairy intolerance the same as charging more for using a wheelchair ramp or a braille menu”
Can you show your work on milk alternatives costing Starbucks less than a cent more?
Quite the specious analogy, but I fail to see how kidnapping is equivalent to charging a different price for a different product.
Open a grocery app. Search for oat milk, dairy milk, almond milk, soy milk. Alternative milks don’t really cost more than dairy anymore.
I don’t agree with the lawsuit, but I also don’t agree with Starbucks’ ridiculous upcharge for non dairy.
Does Starbucks shop at grocery stores? They likely buy non-consumer packaged milk, think 5 gallon plastic sacks, and cases of consumer packaged milk alternatives. Not to mention extra man-hours and extra refrigerated space.
Visit a Starbucks. They pull a gallon plastic milk jug from a drinks fridge under the bar when making drinks.
While there might be slight discrepancies between grocery prices and wholesale prices, the sheer size of Starbucks means they’d save on all varieties of milk (not just dairy) and I seriously doubt they pay 50 cents more per cup for alternative milks.
You literally have no idea though, unless you work in supply chain for Starbucks. You’re guessing. Do they do their purchasing as a single corporation from one dairy farm, I doubt it. Plus you ignore the additional hours and need for refrigerated space. There’s more to consider than just cost per unit. Also if you use less there’s a greater chance of spoilage.
We will never know the exact numbers. However, from reported figures we know that $SBUX, $DNKN, $PNRA, $MCD all have similar margins across gross, ops and P&L (50-70, 10-20, 10-20 respectively).
the goal of all fast food centers is to produce a unit cost as close to $1, preferably lower, as possible and we also know from reported figures that 1 cent is the expected associated labor cost of a starbucks unit.
Knowing that the price of milk on commodities market is 16.42hwt or 1 cent / oz, knowing that SBUX coffee beans are 7cent/oz we can extrapolate that suitable extra costs for alternative milks must be in the single figure cent range.
Further supported by how if you are to go to a post-supply-chain-shipping-and-procurement wholesale vendor then the price of oatly barista edition oatmilk is 10c/oz and we can very safely assume that SBUX gets it much MUCH cheaper so we at least know the ceiling is $0.1
So, while I was exaggerating for effect in my original reply, the actual numbers- even if they are paying the same price as I would walking into a wholesaler (EXTREMELY unlikely):
So in the extreme worst case scenario for starbucks they are making an extra 6% profit per ounce on oatmilk over cow milk, so not at cost-to-price parity.
And that’s the worst case, they are probably making more.
So in one comment you’ve gone from less than a cent to possibly 10 cents. And the price increase isn’t a dollar, it’s 70 cents.
Your calculations don’t seem to include increased refrigerated space required, additional man hours, increased inefficiencies, and possible increased spoilage. The price increase does not strike me as unreasonable given the circumstances.
cf supra—
exhibit a:
exhibit b:
exhibit c:
waaaay ahead of the gotchas and objections my dude.
Additional space isn’t an overhead rolling operating cost, and per unit is probably infestisimal. Additional man hours is a weird objection, do starbucks even track for “reaching for a carton slightly further away”? I imagine the time savings for moving a carton 4" closer are measured in the thousandths of seconds
oat milk has a longer shelf life (6 months) than cow milk (5 days) and when opened too (10 days vs 2)
The price doesn’t have to strike you as reasonable or not because we are discussing whether we think starbucks are making a profit on oat milk or not. To me it’s obvious they are making more of a margin on oat over dairy, whether or not that is good/bad, reasonable/unreasonable, fair/unfair is an entirely different conversation
Either they added a new refrigerator or made room in an existing refrigerator. To make room something needs to be removed, less room for regular milk means more trips to a walk-in to restock. More SKUs means more time on ordering and inventory. If they added a refrigerator then there’s added electricity costs.
I meant once opened, which is more like a week. Which means they likely all need day dots put on them. More man hours (or minutes, or seconds)
They’re a business, I assume they make a profit on everything. Oat milk lattes would seem to be a strange loss leader.
again I already addressed those objections in my post before you commented. Shelf space is cheap, refrigeration already exists and is not an added cost, expanded refrigeration is a single point cost that is quickly paid back by sales, I dont think adding day dots is putting starbucks out of business.
they already have separate supply chains for paper cups, crockery, beans, syrups and milks — I know this because I worked on a project that used their paper cup supply chain a few years ago. Plus they already have an oatmilk supplier so they’re not even adding an additional sku.
yes, the point of this thread is “should companies by allowed to significantly profit more on allowances made for not being ablebodied” && “is charging more for dairy intolerance the same as charging more for using a wheelchair ramp or a braille menu”
Hand waiving something away isn’t addressing it, but fair enough.
it’s not Hand waving - an extra fridge is just cost of doing business.
Everything is a cost of doing business: payroll, electricity, inventory, etc.