Why Is Plant-Based Milk More Expensive Than Dairy?

You’ve committed to switching from dairy to plant-based milk, but noticed that they could cost double, or even in some cases 4 times more!? We know this could be off-putting, especially at the start of your journey transitioning away from dairy, however, there are many benefits to switching away and the cost shouldn’t deter you. We’ve tried to explain why plant-based milk typically costs more than dairy, how to cut costs and why it’s still a good choice.

Plant-based milk’s have been widely reported as costing around double that of cow milk. In the UK, in June 2021, the average price paid per litre of dairy milk was 88p, with 1.13 litres of Tesco British Whole Milk selling for just 80p. However, dairy-free milk can be found cheaper than regular cow milk, with Grower’s Harvest Unsweetened Soya Drink selling for just £0.55 per litre at Tesco!

The story is similar in the US, July 2021 figures from the USDA show the average cost for conventional whole milk at $3.69 per gallon (around $1 per litre). This compares to around $1.60 for a litre of oat, almond and soy plant-based milk. A quick look at Target’s website, shows Oatly selling for around $2.60 per litre!

Why is plant-based milk so expensive?

A 2021 report by Mintec discusses several reasons as to why this is the case. Part of the reason is down to production costs. In the US, cattle are mostly kept indoors, increasing energy costs when compared to the UK, European and New Zealand markets. This helps to explain why US dairy costs are priced at a premium. However, to answer this question, we must look at the elephant in the room … subsidies. The US subsidy program is the biggest culprit for bailing out the industry and reducing the costs of production. Despite dairy consumption falling 40% since 1975 per person in the US, the Agricultural Act of 2014 resulted in $43 billion being given to the dairy industry in 2016 and $36.3 billion in 2017. Consequently, 42% of US dairy producer revenue came from government support alone.

However, drinking plant-based doesn’t always have to be expensive. Soy milk is generally the cheapest of the alternatives, with supermarket branded products priced at under $1 / £1 per litre.

Taking a look at Tesco’s online prices, below we have compiled a list of the top 5 cheapest alternative milk! (and how they compare to dairy milk prices)

Make your own

To cut down on costs even further, why not consider making your own plant-based milk. We estimate that by creating it yourself can reduce the cost down to around £1/ litre, easily cheaper than most dairy and non-dairy alternatives. Making your own also cuts out the nasty preservatives, excess sugar and other additions common in shop-bought plant based milk. Homemade milk can also taste better! By using fresh and natural ingredients, you’ll get a much more creamy, nutty and fresh end product.

The future cost of plant-based milk

As demand grows for plant-based alternatives, companies will invest in boosting manufacturing, driving down production costs. Oatly is currently building one of the world’s largest manufacturing plants in the UK, due to start production in 2023 for the British market. There are plans for a facility in Texas to open in the same year. This increased capacity will drive down costs through economies of scale.

There are increasing calls globally for governments to shift subsidies away from livestock farming. 15 celebrities including Ricky Gervias, Joaquin Phoenix and Billie Eilish signed a letter calling for animal farming to be added to the COP26 political agenda. If governments began pulling subsidies from the animal agriculture industry, this would be a step towards price parity between plant-based and animal-based milk. In fact, as plant-based milk have less of an impact on the environment, particularly on the climate, redirecting subsidies towards plant-based milk and away from dairy milk would help in the fight against climate change.

How can you keep costs down?

Despite the overall cost of plant milk being high, there are ways to keep the cost down and it will even help you try new products in the process.

• Buy in bulk when the product is discounted. This method requires choosing long-life packaging over the chilled product so you can store it easily. If you’re buying the milk in ambient packaging then they can keep for up to 12 months so it’s worth storing them whilst they’re cheaper.
• Look out for deals on online sites as well as in person at supermarkets – they’re not always the same price.
• Try out new cheaper milk coming onto the market, even though you probably have a favourite brand there are always new products coming out so why not try something a little cheaper as you never know – it could be as good and maybe slightly better.