04

September

2

The true cost of food

by Harsha Yadav

Source: greenbiz.com

Trucost analyzed three common food products: breakfast cereal, fruit juice and cheese. We examined the stages of production from farm and orchard to the supermarket shelf. The embedded carbon, water, waste and pollution were calculated for generic products in each category. (No brand has been harmed in the generation of these metrics!) Trucost then calculated the “natural capital” cost of each of these. For carbon we used the social cost. For water, a local issue, we correlated the volume of water required to produce the raw materials with local scarcity by gathering data on the location of production and pricing water accordingly.

To view the full analysis, click on the image below. The percentages show each item’s share of the product’s total environmental impact.

Our analysis indicates that, on average, the true cost of a block of cheese should be 18 percent higher than the retail price, breakfast cereal should be 16 percent more expensive and fruit juice 6 percent more. Water is the most significant natural capital dependency for all of the products. Unsurprisingly for breakfast cereal wheat is the biggest draw on water in the supply chain. For fruit juice it is orange production and dairy cows make cheese production a thirsty business. Cheese is the most carbon intensive product and fruit juice the most wasteful.

This analysis illustrates the scale and type of natural capital cost for each of these products, on average. Note, however, that there will be significant variation when it comes to analyzing specific products and brands. To illustrate how some of these differences could arise we analyzed the variation in water use and scarcity across the top 10 production locations of each product to demonstrate the scale of risk and opportunity. The natural capital cost of using water is driven mainly by water availability at the production site, as well as by the type of water consumed and a range of other factors. For example, areas with high rainfall and less competition for resources will have lower water costs than sites with scarce supplies and over-abstraction.

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2 thoughts on “The true cost of food

  1. Karthik

    It was an interesting read…this has given a absolute new perspective to food pricing…I am sure world’s most cultivated and capitilzed crop… Corn….will have a major role in creating an imbalance in food prices!

    Reply
    1. Harsha

      Absolutely Karthik…Corn is already creating a huge debate of Food Vs Fuel and to what should we give a precedence to…

      Reply

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