Starbucks has recently announced that starting November 7, 2024, the chain will eliminate the surcharge for non-dairy milk substitutes in its drinks. This change comes as the surcharge, which ranges from 70 to 80 cents depending on the market, is being dropped to better serve customer preferences.
Competitors like Second Cup in Canada continue to charge extra for non-dairy milk, while many Tim Hortons locations do not. Consumer preferences support the growing trend of eliminating the non-dairy milk surcharge and align with similar strategies other coffee chains employ globally.
The plant-based milk market exhibits notable growth, driven by lactose intolerance and vegan dietary choices. The global market size was estimated at USD 19.42 billion in 2023, expected to grow at a CAGR of 7.6% from 2024 to 2030. According to Future Market Insights, the market is projected to hit USD 47.9 billion by 2034, reflecting a CAGR of 9.1%.
A Statista Consumer Insights survey reveals a promising future for plant-based milk. The Asia region emerged as a leader, contributing an estimated $13.4 billion to the market in 2023. China alone contributed $9.5 billion, underscoring its dominance in the region. The United States ranks significantly lower, generating $4.5 billion in the same year.
"Core to the Starbucks Experience is the ability to customize your beverage to make it yours," said Starbucks CEO and chairman Brian Niccol.
“I made a commitment that we’d get back to Starbucks, focusing on what has always set Starbucks apart – a welcoming coffeehouse where people gather and we serve the finest coffee handcrafted by our skilled baristas,” continued Niccol. “This is just one of many changes we’ll make to ensure a visit to Starbucks is worth it every time.”
Consumer preferences for plant-based milks vary by region. Soy milk remains the most popular in China, thanks to its traditional roots. In the U.S., almond milk is the leading alternative, followed by a growing preference for oat milk. Silk and Blue Diamond’s Almond Breeze are top brands, with substantial consumer loyalty—over 80% of consumers who try these brands report intentions to continue purchasing them.
Despite these strong figures, plant-based milk still represents a smaller market share than traditional dairy products. For instance, refrigerated dairy milk in the U.S. accounted for $14.1 billion in sales for 2023, while plant-based milk alternatives tallied only $2.5 billion. Consumer enthusiasm for plant-based milk, driven by factors such as animal welfare, environmental concerns, and dietary preferences, suggests promising growth potential.
The strategic removal of Starbucks's non-dairy milk surcharge could potentially reinvigorate sales by catering to evolving consumer demands and reducing barriers to customization. This aligns with broader market trends favoring plant-based alternatives, enhancing the competitive landscape for coffee chains globally.
