Yahoo Finance Aussie cafe owner’s frank admission about $1.50 'milk' gripe: 'People don't get it'
Dan Dick said there's a cost that many customers don't factor in when ordering their coffee.
The cost of living has forced Aussies to reconsider even the smallest of purchases, with some decried for spending money on a barista-made coffee. Coffee has gotten more expensive - between $4.00 and $5.50 for a cup of joe - but alternative milk drinkers are slugged again with an extra charge.
Oat, soy or almond can cost up to $1.50 more, which has been justified by the cost of those kinds of milk to the venues. But, Dan Dick, who runs four Melbourne cafes, told Yahoo Finance there's a hidden cost for alternative milk — which makes up 30 per cent of all orders — that many customers don't notice.
"Everything we do with takeaway coffee is geared towards maximising your efficiencies," the director of Born and Raised Coffee said.
Several of his cafes are centred very close to major office buildings and Dick knows that people visiting him are usually on a time crunch.
They're not the type of customers sitting for an hour, slowly enjoying their morning latte. It's go, go, go and in his words, the cafes are a "well-oiled machine".
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But that machine is impacted by people asking for different types of milk.
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"If you get six people come in and they all order full cream, then you put one big jug on, you steam the whole thing, and they pour really easy," he told Yahoo Finance.
"But if six people come in, one gets full, one gets skinny, one gets lactose-free, one gets almond, one gets oak, one gets soy, then you're doing the same action six times instead."
He has no problems at all with people asking for alternative milk and understands the dietary and personal tastes of every customer.
"[But] it certainly comes at a price... if we were just to blanket charge the same as everything, it would be a loss later," Dick explained.
Alternative milk surcharge suggestion
Dick proposed an interesting suggestion to customers who choose alternative milk.
Six different types of milk are provided at his cafes. He could choose to "ease the burden" for customers and provide one milk without a surcharge.
But the question remains, which would he choose?. Would an oat drinker take soy simply because it's cheaper? Or would people stick to their favourites?
He admitted that many Aussies select an alternative milk because of their dietary or allergy requirements, rather than specifically on taste, so many wouldn't be willing to jump ship purely on price.
However, it sparked a discussion among the minority of customers who are in that boat.
"I drink oat milk usually. I would switch to soy if it had no surcharge, but I wouldn't switch to almond, because almond is pretty watery," said one person.
"I would drink a no surcharge oat as a soy drinker," added another.
"If I’m buying a coffee out I’m getting a milky boy regardless of the additional fee as I can’t make that at home. I do like the idea of having one milk alternative the same as normal milk price," wrote a third.
What goes into the cost of a coffee?
There are plenty of elements that cafes take into consideration when choosing how much to charge people for coffee.
It's not just the obvious elements like the coffee beans and milk, but also the cup, the lid, the espresso machine, the staff, the rent on the business, utilities like gas and electricity, and other aspects related to running a business and keeping the lights on.
Dick said it's a delicate balance trying to find the right price for Aussies while also keeping his cafes afloat.
"You need to be empathetic to your customers," he said. "If you don't understand your customers, then you can't possibly expect to sell to them. We've got to be aware of the constraints placed on our market from all angles."
Cafes run on very tight margins and, with the cost-of-living crisis, there a fears that a pullback in customer spending could cause many to shut down.
A recent report from CreditorWatch indicated one in every 11 hospitality businesses are expected to close their doors forever in the next 12 months.
Adam Thomson has been running Dovetail on Overend in Brisbane for more than a decade and he told Yahoo Finance that's an optimistic number.
"I think it's going to be worse than that, because being here, experiencing it myself, it's just really disheartening, because you're working harder than ever, and you don't make enough to pay the bills, and inevitably, small business owners just say, 'I just can't do it anymore'," he said.
"I work six days a week ... We pay ourselves less than the award wage to be here because, at the end of the day, it's just been a matter of matter of survival."
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