Starbucks Soymilk Price Gouging Cover-Up
My wife read my previous Starbucks post, smiled, paused, then asked me to write a smack-down for a B.S. email response she received on why they charge extra for soy milk.
Their justification was that soy milk costs more to Purchase, to Stock, and to Prepare. Don’t believe me? Here’s the email:
Now the only problem with their logic is Stocking and Preparation. Soy Milk is good for around 1,000 years (okay I’m exaggerating but it’s not perishable like cow’s milk). And last time I checked preparation is pretty much exactly the same (cow or soy) for your latte.
So Stocking costs less, not more, and Preparation is a wash. The question is how much more Soy Milk costs for Starbucks mega-corp to buy. For us individuals, the best pricing I could find is around $5.00 per gallon. For comparable milk, $3.50. Let’s say the Stocking costs are around 50 cents less per gallon for Soy. So there’s a net $1 additional cost per gallon, spread over approximately 40 servings per gallon, or 2.5 cents extra. Starbucks charges 40 cents, or almost 94% margin.
So how about some truth from Starbucks – “We charge extra for soy milk because we can. Its an option that healthy, more affluent people prefer.”
Its value-based pricing & has nothing to do with costs. Come clean about what you’re doing – and profit without a guilty corporate conscience. Don’t blame it on Procurement.