What if the price tag on your food told the full story, not just how much it costs at the checkout, but what it costs your health, the environment and society at large?
This is the force behind the True Cost and True Price of Food Baskets project, a bold, multi-year initiative led by the Global Alliance for Improved Nutrition (GAIN), in collaboration with partners. Nutrition Connect spoke with Flaminia Ortenzi, a Research Associate on GAIN's Knowledge Leadership team, to learn how this project uncovers the hidden costs of our diets—and how this could translate into better investments in food systems worldwide.
Q: What is the True Cost and True Price of Food Baskets initiative, and why is it important?
The True Cost and True Price of Food Baskets is an innovative, multi-partner initiative led by GAIN, the Netherlands Food Partnership, the Access to Nutrition Initiative, and the True Price Foundation. Its goal is to understand the economic burden of food-related externalities—the hidden costs that our diets impose on health, the environment, and socio-economic systems. It's a three-year project currently in its first phase, which consists of a comprehensive literature review of existing methodologies for True Cost Accounting and True Pricing.
This initial mapping of the literature will inform the project's core modelling component by enabling us to develop a holistic methodology for quantifying and monetising the externalities of food baskets.
We aim to assign a monetary value to these externalities so we can:
- Compare current food baskets—meaning what people are eating today, so average diets that are observed in countries for different population groups, for example, women of reproductive age, children, or the general adult population.
- With recommended food baskets—meaning what they should be eating according to local food-based dietary guidelines. So, how would the externalities and associated costs change and, hopefully, decrease if we were to make healthier and more sustainable dietary choices?
Q: Why is it important to include externalities in food basket pricing?
Externalities represent the hidden costs and benefits of a product that aren't reflected in its market price. In the case of food, externalities could include healthcare costs, such as expenses for treating diabetes linked to poor diets; environmental degradation costs, including those of carbon emissions and biodiversity loss from intensive farming; and social costs, like labour exploitation and gender disparities.
Food choices not only affect our health but also impact the broader society. By making these hidden costs visible, we aim to support better public and private investment decisions, guide policy toward promoting healthier and more sustainable diets, and enable value chain actors and consumers to make more informed decisions.
Q: Which geographies does the project cover? Are you focusing on any low- and middle-income countries?
We're starting with a proof of concept in the Netherlands, where high-quality, reliable data is readily available, as it will allow us to develop the methodology and test it before replicating it in more data-scarce environments.
Next, we plan to pilot the model in at least two low- and middle-income countries—likely one in Africa and one in Asia—to ensure our approach is globally applicable, especially in geographic areas where the economic burden of malnutrition is highest.
Q: What have you learned from the literature review so far?
We just completed data extraction for the literature review focused on health externalities. One common finding across all included records is that the health externalities of current diets are very high globally, both for high-income and low- and middle-income countries. Although the primary cost drivers in the Global North differ from those in the Global South, observed dietary patterns consistently result in trillions of dollars lost due to ill health.
In high-income countries (HICs), the costs mostly come from obesity and non-communicable diseases (NCDs), like cardiovascular disease, cancer, and diabetes, linked to excess calories, sugar, salt, and saturated fats. In low- and middle-income countries (LMICs), while the burden of obesity and NCDs is rising, high levels of undernutrition persist, especially among vulnerable groups such as infants and young children and women of reproductive age, with significant costs stemming from protein-energy malnutrition and micronutrient deficiencies.
Yet, there's a need for more evidence from LMICs because most of the studies we reviewed focused on HICs. Only a few analyses were conducted in LMIC settings.
Additionally, existing literature primarily focuses on the medical costs and productivity losses associated with non-communicable diseases (NCDs). We should place more emphasis not only on NCDs but also on undernutrition (including micronutrient deficiencies), which still affects a significant proportion of the global population. We need to think beyond the usual obesity, cardiovascular disease, and diabetes that are most commonly talked about because nutrient deficiencies and inadequacies also drive enormous healthcare costs and economic losses.
Another interesting finding from the review is that most assessments focus on a handful of "mainstream" dietary components or food groups.
Food groups most studied in the literature are:
- Alcoholic beverages (which have very high health costs)
- Processed and red meat
- Sugar-sweetened beverages
In contrast, evidence is lacking for other food groups, and there's no clear methodology for estimating their external costs on health. For example, what is the cost of ultra-processed foods consumption? What is the cost of oil and fat consumption? While there's a strong research focus on diet-related negative health outcomes, there's much less evidence on the positive externalities of consuming beneficial food groups, such as fruits, vegetables, and legumes—something we aim to include in our own assessment.
Another element currently lacking, which concerns the balance between quality and quantity, is assessing the costs of intangible impacts. The vast majority of records focus on productivity losses and healthcare costs. Still, little attention is given to the cost of pain and suffering due to malnutrition and the burden caretakers of persons suffering from malnutrition bear.
Q: How do you plan to calculate these externalities? Is there a specific methodology?
Our approach will be informed by the results of the comprehensive literature review we're conducting. We plan to build upon existing methods and fill identified gaps. Among others, we're reviewing readily available methodologies from international organizations, foundations, and institutions, such as:
- WHO's approach to assessing the Global Burden of Disease
- FAO's True Cost Accounting framework
- The True Price Foundation's models for environmental and social externality accounting
We want to develop a replicable framework that policymakers and researchers can use in other countries.
Eventually, we will use this model to estimate:
- The true cost of current food baskets
- The true cost of recommended food baskets
- ...and compare them.
This will help us make the case for investing in healthy and sustainable diets, even if it seems more expensive upfront—because such investments will yield large savings in the long run when considering diet-related externalities.
Q: So, what is the case for the price tags of staple foods on our shelves today?
Currently, the only costs represented in the price tags you see at retail points are those of production, which are calculated based on inputs, for example, fertilisers, pesticides, land and facilities used, crop seeds, animal feed, labour, equipment and machinery, and energy and water.
However, we do not see the impact of food on consumers, the environment, and society being reflected in price tags. For staple foods, such as maize, wheat, or palm oil, often grown on large plantations, we cannot determine whether, for instance, they were produced using forced labour, child labour, or highly hazardous pesticides that have toxic impacts on human health and ecosystem quality.
In short, labour rights, gender rights, Indigenous peoples' rights, human health rights, and planetary health rights are currently not being adequately considered.
This means the gap between the price we see at the supermarket and the true cost is very large. In fact, if we look at the total economic burden in US dollars of just the health externalities of current food systems, we're talking about $ 8 trillion globally, which is enormous. So, if we were to include these costs in the price tags that we see at the supermarket, consumers would be able to tell, for example, that a given food product is "holistically" better than another, based on the corresponding impacts on health, the environment, and society. This would enable them to make more informed choices when visiting retail points based on the actual cost of food rather than just the production cost, which is currently the prevailing view.
Q: Has True Pricing been implemented anywhere so far?
True Cost Accounting is not a very new concept. It's been in use for quite some time. On paper, it's relatively easy to execute, as it just comes down to calculations, collecting data, analysing, and attributing impacts to food systems. But in practice, there have only been a few applications so far.
During the recently concluded True Cost Accounting Global Summit, held on April 15–16, 2025, at the FAO headquarters in Rome, it was evident that while there's a lot of enthusiasm for true pricing and true cost accounting from global leaders, there's a need to move from theory to implementation, by advancing the integration of true costs into actual practice in food system decision-making.
That said, there have been a few attempts at applying true pricing and true cost accounting in real-life settings. In July 2023, the German supermarket chain Penny piloted True Pricing for a week in all its 2,150 branches: the chain charged the "true prices" for nine products, including their social, environmental, and health impacts.
Although 53% of customers reported being more aware of the real costs of food production and consumption, the true pricing experiment was not very successful in shifting their purchasing habits.
This is because people have affordability constraints, and there are also significant cultural acceptability barriers; for instance, if we look at a country where everyone loves processed meat and tell consumers: "Hey, look, processed meat has very high externalities", people will buy it anyway because that's part of their identity and tradition.
Q: What does a healthy plate look like? Is there a universal model?
What a healthy plate looks like varies from country to country and, at sub-national level, from one province to another. From a true cost and true price perspective, a healthy plate is one that minimises negative externalities and associated costs while generating external benefits and economic gains, such as productivity boosts and improved healthcare for everyone. This means ensuring that the plate is nutritionally balanced to maximise health benefits – a healthier population translates into improved productivity. Additionally, it should have limited negative externalities on the environment and promote social equity. Indeed, a healthy plate should contribute to adequate nutrition and disease prevention, the protection of ecosystem services, the preservation of natural resources for future generations, as well as social justice. The latter refers to food that has been produced by value chain actors (such as farmers and food processors) who have access to decent livelihoods, are not subject to discrimination or violence, and have access to adequate occupational health and safety measures.
A healthy plate is also more than what's on it; it depends on the geographic context, what's culturally desirable and acceptable for local populations, what can be produced and made available locally, and what is affordable to different socio-economic groups.
In summary, a socially just plate is one that is healthy, affordable, environmentally sustainable, culturally acceptable, and desirable, contributing to the preservation of natural resources while benefiting both human and social capital.
Q: What kind of impact are you hoping this work will have on different stakeholders?
For consumers:
- The findings could be used to inform front-of-pack labelling and awareness campaigns. Imagine going to the supermarket and seeing a "true price" tag that includes health, environmental, and social impacts—not just production costs. This will help consumers understand the longer-term implications of their purchasing and consumption choices.
For policymakers and governments:
- The data will provide evidence to support better food and nutrition policy, as well as public investments in disease prevention and environmental protection.
- It will show where the biggest cost savings would be if people shifted to healthier and more sustainable diets.
- The findings could also inform public procurement strategies, including school feeding programs, as well as tax and subsidy policies.
For the private sector:
- Businesses can use this information to critically assess their product lines and invest in reformulation and innovation to develop healthier, more sustainable, and equitable products.
- The results could incentivise the adoption of more sustainable production and management practices across the entire food value chain.
For Nutrition Connect & GAIN:
- Stronger evidence base to support advocacy and cross-sector engagement in building more nutrition-sensitive, environmentally sustainable, and just food systems
Q: What does success look like for this project?
Success would be:
- A robust, transparent methodology that can be adapted to different contexts.
- Strong international and country-level partnerships for the implementation of True Cost Accounting and True Pricing.
- Integration of the findings into local policy recommendations, corporate strategies, value chain actors' decision-making, and consumer-facing tools.
- Ultimately contributing to a shift in global food systems toward ensuring that healthy and sustainable diets are the most affordable, accessible, and desirable choices. This potential for positive change should inspire us all to work towards this common goal.
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