Melbourne café owner explains soy latte pricing differences

Dan Dick, the owner of four coffee venues in Melbourne, recently addressed the pricing differences between soy lattes and flat whites on TikTok. He explained that the cost of soy milk is nearly double that of dairy milk, contributing to the higher price of soy lattes. Additionally, the complexity of managing multiple milk options complicates the workflow, particularly during busy takeaway service, which can slow down operations significantly. This has led to discussions among customers about the potential for a single price for all milk alternatives, as many have specific preferences due to dietary restrictions. Despite rising prices last year, coffee sales have remained stable, with average prices for basic drinks settling between $4.00 and $5.50. Comparatively, Australian coffee prices are low on an international scale, with a recent survey indicating that the average price for a small takeaway flat white is A$4.78, while in Singapore, it is A$8.42. The profitability of Australian cafés has improved since a drop in 2020, but net profits are still below the national average. The cost structure of takeaway coffee reveals that milk and coffee beans account for about 24% of the total cost, while cups, lids, and equipment maintenance contribute an additional 10%. This breakdown highlights that while the margins may seem attractive, they do not reflect the full financial picture for café owners. As the coffee industry navigates these challenges, discussions about pricing strategies and customer preferences continue, indicating a potential shift in how alternative milk options are priced in the future.