Albert Heijn the largest Dutch supermarket chain, has been experimenting with an innovative pricing strategy that reveals the “real price” of products to highlight their environmental impact. This initiative aims to raise awareness with citizens and influence more sustainable consumption behaviours.
In their coffee to go pilot customers who went to purchase a self-service cup of coffee stores saw two prices:
- Standard retail price
- The true price.
The ‘true’ price reflected the cost of CO2 emissions, water use, resource consumption and labour conditions all of which are needed to produce the hot beverages.
For example, a double espresso was EUR 2.25, but with the True Price methodology the same cup cost EUR 2.33, so customers could choose which of the two prices to pay. Where this got exciting is the difference in adding cow milk versus oat. Under this methodology, cow milk costs EUR 0.36 to add to your coffee, whilst adding oat milk would only add EUR 0.11.
For years there has been a price premium for milk alternatives but through True Pricing customers were able to pay a lower price for oat milk than cow milk, courtesy of the smaller environmental footprint generated by oat milk.
Albert Heijn developed the pilot in partnership with the independent organisation True Price to promote sustainable choices by revealing externalised social and ecological costs throughout a product’s supply chain.
All extra revenue generated by the experiment was invested in a Rainforest Alliance reforestation project in East Africa, to help further the positive impact of True Pricing.
So, What did they learn?
In their pilot survey, 44% of customers knew about True Pricing before our experiment. While 36% were willing to pay the True Price and 20% considered switching products, only 15% actually did so at the checkout.
Interestingly, 31% of plant-based milk buyers chose to pay the True Price, highlighting their eco-consciousness. Despite limited changes in sales behavior, the experiment boosted awareness and support for True Pricing. The challenge now is to further engage and motivate customers to act on their intentions, as they clearly support AH’s commitment to sustainable pricing.
A key takeaway from the pilot was the importance of collecting more primary data, as the initial analysis relied heavily on secondary sources.
What’s next?
Albert Heijn and True Price aim to expand the initiative to more locations and products and have published a detailed report on their approach.
This is a fantastic example of a corporate initiative that can really engage and educate people. Bringing awareness to the true price of products, and the impact of everyday day decisions, Albert Heijn is a great example of a citizen brand leading the way by harnessing their influence and driving positive change, so we will be watching how this is rolled out further with interest!
Stay updated on their progress at ah.nl/true-price.
