"Supermarket Margin Framework for Affordable Healthy Food
Supermarkets hold a wonderful key to making healthy food more popular quickly. They need to adjust their profit margin policy to give healthy products a fair chance.
The gap between the prices of unhealthy and healthy food is a complex problem with deep-seated causes. Recent research by Hanna Verboom for the Healthy Generation sheds light on this issue.
She mainly mentions the raw materials. Nutritious crops such as legumes and vegetables have a lower yield than, for example, sugar beets, which results in higher costs. However, this can only explain part of the price difference, only 20 to 25 percent.
Another significant factor is the cost of making healthy composite foods based on nutritious raw materials. These products still have a smaller sales market, which means they are produced in smaller quantities, which leads to higher costs.
The third and much underestimated reason for the price difference lies in the profit margins of Dutch service supermarkets, which are traditionally based on a percentage of the final price on the shelf. When a healthy product ends up on the shelf for twice as much as an unhealthy alternative, the retailer profits twice as much.
In order to increase the accessibility of healthy food for everyone, supermarkets should seriously consider adjusting their profit margin policy. They should calculate in real cents and not in percentages. The price difference will then be reduced by as much as a third, sales will increase, and the production costs for ‘healthy food’ will also decrease. Equalizing the cent margin would be a tangible way to fulfill their promise to bring healthy food within reach for everyone."
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