PLANT-BASED
MILK
ALTERNATIVES
IN COFFEE
SHOPS
Hsu Lai Wadee
BUS 1103 : Microeconomics
Date: 2nd Feb 2026
Plant-Based Milk Alternatives in Coffee Shops – Critical Analysis and
Marginal Decision-Making
Introduction
Running a coffee shop today means keeping up with what customers want. Recently, I’ve noticed
more people asking for plant-based milk like almond milk and oat milk. As the owner, I can’t
just add things to the menu without thinking about the costs and benefits. That’s where marginal
analysis and diminishing marginal utility come in. These concepts help me figure out if offering
plant-based milk is worth it, and they also remind me that customer excitement doesn’t stay the
same forever.
1. Using Marginal Analysis in the Coffee Shop
Marginal analysis is basically looking at the “extra”, the extra cost versus the extra benefit of a
decision (Shapiro et al., 2023). In this case, I’d ask: if I add almond milk, how much extra money
will I make, and how much extra will it cost me?
The extra benefits could be:
More customers who want plant-based options.
Happier(satisfied) regulars who feel like I’m listening to them.
The chance to charge a little more for specialty drinks.
The extra costs would be:
Almond and oat milk are more expensive than regular dairy.
They spoil faster, so I risk wasting money if demand isn’t steady.
My staff needs training to handle new ingredients.
So, if the extra revenue is higher than the extra costs, then it’s a smart move. For example, if oat
milk brings in $300 more per week but costs $200 to stock and train staff, I’m still ahead by
$100. Marginal analysis helps me avoid guessing and instead make decisions based on clear
trade-offs.
2. Diminishing Marginal Utility and Why It Matters
Diminishing marginal utility means that the more of something people consume, the less
satisfaction they get from each extra unit (Shapiro et al., 2023). Think of it like this: the first oat
milk latte a customer tries might feel amazing, but by the tenth one, it’s just normal.
For my coffee shop, this matters because I shouldn’t assume demand will keep growing forever.
At first, plant-based milk might be exciting, but over time, the “wow factor” fades. If I stock too
many options such as, almond, oat, soy, coconut, I’ll spend more money than the satisfaction I’m
creating.
Instead, I should start small, maybe with almond and oat milk, since they’re popular. Then I can
watch how customers respond. If demand stays strong, I can add more. If not, I avoid wasting
money. Diminishing marginal utility reminds me that more isn’t always better, and variety should
be balanced with cost.
3. Real-Life Reflection on Marginal Analysis
I’ve actually faced a similar situation in my own life. When I was deciding whether to buy a new
laptop, I had to think about marginal analysis. The benefits were faster performance, saving time
on assignments, and less stress. The costs were the high price and the risk of debt.
By comparing the two, I realized that if the time saved each week was worth more than the
money spent, then the purchase was justified. In the end, I bought the laptop because the benefits
outweighed the costs. This is the same logic I’d use in the coffee shop: don’t just look at the
total, look at the “extra” benefit versus the “extra” cost.
Conclusion
The coffee shop scenario shows how economic concepts apply to real life. Marginal analysis
helps me decide rationally by comparing extra benefits and costs. Diminishing marginal utility
reminds me that customer excitement decreases over time, so I should expand carefully. And my
personal laptop decision proves how marginal analysis works outside of business too. By
thinking this way, I can make smarter choices that balance customer needs with financial reality.
References
Shapiro, D., MacDonald, D., Greenlaw, S. A., Dodge, E., Gamez, C., Jauregui, A., Keenan, D.,
Moledina, A., Richardson, C., & Sonenshine, R. (2023). Principles of microeconomics (3rd ed.).
OpenStax. [Link]