During the summer of 2023, Germany was treated to a daring and eye-opening experiment by the bargain supermarket chain Penny. For a week, consumers at all of its 2,150 outlets were challenged with a radical question: what if the cost of daily groceries not only accounted for production expenses, but also the environmental and health harm associated with their production? This campaign, called the “True Cost” movement, challenged individuals to reconsider the unspoken consequences of the food that they consume so carelessly.
The idea was basic but disturbing. Nine products chosen such as cheeses, sausages, yogurt, and a plant-based schnitzel had their prices re-priced to reflect their impact on the environment. These changes were not arbitrary but carefully computed by researchers at the University of Greifswald and the Nuremberg Institute of Technology. They took into account greenhouse gas emissions, soil erosion, the use of pesticides, water pollution, and health effects. By displaying these numbers at the till, Penny made an uncomfortable comparison between what consumers usually pay and the cost actually incurred by nature and society.
The campaign provoked both admiration and criticism soon after. Environmental welcomed the move to expose concealed costs, while consumer groups and agricultural associations suspected its motives, labelling it as a publicity stunt. However, no matter what opinion there was, the campaign managed to initiate a countrywide discussion of food’s true value, farmers’ pressures, and the role of corporations and governments in modelling sustainable consumption. The following is a closer examination of the highlight features of this audacious experiment, how it was received, and what lessons can be learned for the future.
1. Knowing the Actual Cost of Food
At the core of the campaign was a straightforward concept: the cost we pay at the supermarket is seldom the true cost of production. Scientists pointed out that harm to soil, water, air, and health is subtly subsidised by society in the form of taxes, medical expenses, and government clean-up operations. By adding these externalities to the price of food, Penny aimed to unveil the concealed burden consumers do not often become aware of.
- Maasdam cheese normally costs €2.49.
- After adding environmental expenses, its price nearly doubled to €4.84.
Breakdown of environmental costs:
- €0.85 for methane emissions
- €0.76 for soil damage
- €0.63 for pesticide use
- €0.10 for water pollution
- Sausages and other animal products showed similar cost increases.
A vegan schnitzel only increased by €0.14, showing its much smaller environmental footprint.
This glaring contrast illustrated an important point: animal foods tend to have much higher environmental costs than plant foods. Scientists such as Amelie Michalke of the University of Greifswald wrote that although the concealed costs of meat and dairy are high, those of plant foods are still low. For consumers, this contrast identified a possible route toward more sustainable diets without the same ecological or financial burden.
2. Consumer Reaction and Behavioural Shifts
The spontaneous response of consumers was telling. Sales of the impacted foods fell by 50% to 70% as prices almost doubled. Sausages and cheeses were worst affected, while the vegan schnitzel, with its modest rise, actually experienced increased demand. This radical shift confirmed that consumers are highly responsive to price signals, particularly when the products in question are discretionary treats.
A survey revealed more complex motivations behind continued purchases of premium-priced goods.
Main drivers for buyers:
- Loyalty
- Convention
- Interest in sustainability
Some buyers were influenced by Penny’s pledge to use extra funds for:
- Global warming protection
- Family farm support
- 84% of higher-paying consumers admitted the donation factor influenced their decision.
- The results suggest that linking purchases with a social cause helps reduce resistance to higher prices.
However, the campaign also revealed boundaries. A YouGov survey indicated that just 16% of consumers were willing to pay the increased prices on a regular basis, and older consumers proved particularly resistant. The experiment was successful in raising awareness, however, and it also illustrated that lasting adoption of “true pricing” might depend on more than voluntary consumer action political structural measures could be called upon to support change.
3. Criticism and Accusations of Greenwashing
Not all was supportive of Penny’s effort, however. Consumer advocacy group Foodwatch called it a “pure PR stunt” because, although nine products had been repriced, numerous other environmentally damaging products were still on sale cheaply. Likewise, the German Farmers’ Association criticized Penny for “greenwashing,” arguing that the temporary nature and limited scope of the campaign taint it.
The attacks highlighted a tension between marketing and real sustainability efforts.
- Discount supermarkets, like Penny, primarily profit from low prices.
- Critics viewed Penny’s sustainability pilot as inconsistent with its business model.
The initiative raised a central question:
- Can a cheap meat-focused discount chain truly commit to sustainability?
- Or is it just capitalizing on rising eco-awareness?
Penny’s spokespeople responded to these accusations by emphasizing that sustainability is no longer a choice for retailing. Company spokesman Andreas Krämer claimed that even discounters have to set an opinion on climate matters and that Penny was adding to the debate instead of faking omniscience. Greenpeace and Friends of the Earth Germany repeated hesitant endorsement, recognizing the experiment’s significance but demanding that it has to set off more extensive, long-term steps.
4. Government’s Role in True Pricing
The argument readily spread beyond Penny to government’s role. Environmental activists called on policymakers to make policy changes, for instance, exempting plant-based foods from value-added tax (VAT) and raising VAT on meat and dairy products. These actions, they asserted, would nudge people toward sustainable options without depending on corporate trials.
- Cem Özdemir, German Food and Agriculture Minister, has long advocated for price reforms that reflect environmental costs.
- In 2023, Chancellor Olaf Scholz rejected proposals to reduce VAT on fruit, vegetables, and legumes.
- His decision was based on budgetary concerns.
- This highlighted the political challenges of implementing systemic change, despite clear environmental arguments.
The Penny campaign gave policymakers a live case study. Watching how consumers reacted to actual pricing, governments learned a lot about consumer behavior, opinion, and the potential for backlashes. As noted by environmental economist Tobias Gaugler, if consumers push back against higher prices, governments might have to look elsewhere for ways to address mispricing in the retail sector.
5. International Comparisons and Broader Trends
The experiment also mirrored wider changes in consumption. Meat and dairy consumption has been falling consistently in Germany for years, and initiatives such as Penny’s could make the trend accelerate. By revealing the unsavory hidden prices of animal foods, the campaign made the case for more plant-based diets as a foundation of climate and health policy even stronger.
- Similar ideas have been tested in other places, but in less radical ways.
- Albert Heijn supermarket (Netherlands) once let customers voluntarily pay a “true price” surcharge on coffee.
- Only 13% of customers opted in, showing the limits of voluntary systems.
- Penny’s mandatory pricing model forced all customers to face higher costs.
- The German approach offered a more impactful learning experience about true pricing.
Regional variation in Germany also showed intriguing dynamics. Sales declines were sharpest in the new federal states at well over 70%, while western and southern areas saw declines around 50%. These discrepancies imply that cultural, economic, or regional identities contribute to how individuals react to sustainability campaigns a reminder that policy solutions need to take local circumstances into account.
6. Lessons for the Future of Food Pricing
While it has been subject to criticism, Penny’s campaign had a lasting impact. It demonstrated that when faced with real costs, consumers change their behavior substantially, typically going to more sustainable alternatives. It also established that openness and a direct connection to social benefit like helping Alpine family farms can overcome consumer resistance to paying more.
- The experiment also exposed setbacks.
- Support for political action on true pricing declined during the election.
- Rising bills made even environmentally conscious consumers more cautious.
This shows the delicate balance policymakers face:
- Avoid alienating the citizens whose support is essential
- Encourage sustainability
In the end, the campaign initiated a conversation that needed to happen. It reminded governments and companies alike that food pricing is not merely a matter of market competition but one of long-term environmental stewardship. Penny’s week-long experiment may not have changed shopping for good, but it established a precedent on which others whether retail, regulators, or activists can continue to build.
Final Thoughts
Penny’s “True Cost” campaign was not just a supermarket stunt; it was an alarm. By doubling the price of some foods, the experiment encouraged individuals to notice the invisible expenses embedded in each bite the greenhouse gases, the contaminated water, the lost soil, and the public health threats. Faulty as it was, it got the job done: generating attention and generating debate way beyond the till.
The effects of this initiative will likely ripple through future retail tactics, policy-making, and consumer demand throughout Europe. It emphasizes the necessity for a food system in which sustainability is embedded in every price point so that society no longer pays the price for hidden harm. As talks of climate, health, and equity rage on, Penny’s radical experiment is an integral step towards reimagining the economics of food one that challenges us all to pay closer notice to the real price of what we consume.
