The true price of bread

“Although unfairly, sustainability has a rather expensive image. So we prefer not to directly communicate about it. At the same time, it is the driving force behind everything we do. If we want to leave our children a bright future, the current economic model has to be overhauled and we have to move towards a much fairer food system.” In this interview, Huijsbregts explains why True Pricing is crucial to this, and how he and his bakery have approached this unique concept.

“True Pricing, also referred to as True Cost Accounting, is an important tool for calculating the hidden costs of products. In the current model, only the direct costs are calculated: ingredient costs, labor costs and profit margins for the various parties in the chain. Many additional costs are not taken into account here, however. For instance, consider costs associated with:

• water consumption

• energy consumption

• CO2 emissions

• degrading soil

• the impact of growth agents and pesticides on nature, animals and our health 

These so-called hidden costs are currently not paid by the polluters, but by people, animals and the environment. Thanks to the True Pricing model, one is able to measure the impact of these costs and make the polluter bear them. By calculating a fairer price, we can take steps towards organizing our food system without adversely affecting people, animals and the planet, yet still ensure that there is enough food available for everyone.”

“No, in fact we have been actively reducing our environmental impact since 2012. Every year we set ourselves the goal of becoming one step more sustainable. We are now completely CO2-neutral, which is quite an achievement for a bakery. Today our focus is on operating more and more locally. 

We don’t necessarily communicate about this approach to our customers. We used to do so, but we soon noticed that this actually resulted in fewer customers. People are interested in sustainable and organic foods, but they’re not actually willing to pay more for them. Unfortunately, the general image of sustainable food is still quite expensive. This is despite the fact that baking sustainable bread doesn’t have to involve any additional costs. In fact, if you look at the true cost, it is even less expensive than before. Sustainable food’s expensive image will not just disappear overnight, though. Not to mention, the concept of True Pricing is quite difficult to understand for the average customer. That is why in our communication towards customers, we primarily focus on the freshness of our breads. We prepare everything ourselves; we don’t buy anything from suppliers. And we produce everything fresh daily, of course. We have no stocks or freezers in our bakery. Everything is freshly prepared and sold on the same day in our 17 stores. This is the angle we focus on when communicating with the customer, which is exactly what they are looking for. 

I’m all about sustainability. I want my company to be run fairly. I want my children’s children to enjoy a bright future, in which food is widely available for everyone. As a calculation model, the True Pricing model allows us to become an increasingly more sustainable business. Sustainability has become a keystone of our company.” 

“I had read about True Price in the past and immediately realized its appeal; in fact, it’s kind of like an energy label. Although these kinds of labels don’t exist yet for foodstuffs, the True Pricing model allows you to calculate the true environmental impact of a product. Generally speaking, True Price prefers to collaborate with larger companies, but they were really interested in our approach. Bread is a fairly straightforward product, with a number of simple ingredients. This is what made our case so appealing to them. As for myself, I was very eager to collaborate too of course, since I was extremely curious about our actual environmental impact. Although we had already made great strides when it came to sustainability, our environmental impact was still quite significant. Yet despite this, the impact of our breads was much lower compared to the impact (and therefore the true price) of conventional breads.”

“True Price analyzed the entire chain for a specific bread in our range: our special ‘Hollandsche’ bread, which is produced from Dutch grains. They then approached all of our suppliers and presented them with a variety of questions. For example, they asked our supplying farmers questions relating to:

• nitrogen 

• fertilizer 

• diesel per hectare

• pesticides

• growth agents

• water 

Based on this data, True Price calculated the environmental impact in a very in-depth manner. For example, which pesticides are used? And how much? How will this affect the number of insects in the future? And what is the impact on the health of the user? Based on these questions, they created a data-driven model to calculate the true price of our bread. This was then compared to the true price of conventional bread.” 

“You’re right. Creating such a model is expensive, and it doesn’t really benefit us financially right away. However, we believe it is absolutely worth it. We’re not doing this for our own gains, but for future generations. These days everyone just consumes, consumes and consumes. This is no longer sustainable. Our climate is changing very rapidly due to all the negative impacts we are creating. Not to mention, now that Ukraine can no longer supply our grains anymore, many bakers are considering grains from Australia, for example. But just imagine what impact transporting these grains to the Netherlands will have on the environment! All this while we grow our own grain here in the Netherlands! 

Given the situation, we thought it would be interesting to research the possibilities. Buying locally is better for the environment. Not to mention, the supply chain becomes a lot healthier if you work with local parties and pay fair prices. It’s not easy, of course. Local parties are not always familiar with high-quality grain culture. In the Netherlands, most grain is destined for animal feed; the grains we use to bake our bread are therefore often imported from other countries. Although local farmers are certainly open to improving their grain varieties, this does entail certain risks for them, and ultimately they have to keep an eye on their finances. In other words, most farmers ask the simple question: how much does a hectare of land get me? Because of the current model, the supply chain has really eroded. You have to find parties that are willing to crossbreed, use their lands to produce higher quality grains and are not afraid to take risks. 

“Look, the grain price of our Dutch Bread is 2.5 times higher than that of conventional breads. Basically, this means that the cost is higher. But because we don’t use any bread-enhancing products, the bread becomes less expensive on balance. And all this while we pay a better price for it in the market. This is not where the major difference in price comes from, however. In fact, it comes from hidden costs. By calculating the true price, you consider the hidden impacts that you make now, but have to make up for later. The transporter’s diesel, land cultivation, packaging costs, energy consumption for baking... it is an illusion to think that costs can be reduced to zero. Nevertheless, we try to reduce our impact every year. Insecticides, pesticides and growth agents currently have the greatest impact on the environment. All of these are used by farmers to achieve the highest possible yield per hectare. If a farmer receives fairer prices, a lower yield per hectare is okay, and you use much fewer pesticides and growth agents. The true price of the products will then drop rapidly.”

“I’m currently working on implementing a blockchain as part of the supply chain. Think of it as a trading platform where payment will be made on the basis of true pricing. We’re currently preparing a pilot project and bringing together various relevant parties. For this project, I’m collaborating with two retired grain experts, who previously spent their careers advising bakers on how to bake bread more quickly. Today they’ve decided to sail a different course: slow baking, with better grains as a starting point. Together we are seeking solutions and holding meetings with farmers across the country. We’ve also had a lot of contact with the Nederlands Bakkerij Centrum (‘Dutch Centre For Bakeries’) about how we can improve the blockchain even further. I believe collaboration is very important in this regard, because the more bakers join in, the more appealing it will become for farmers too.” 

Want to know more about the blockchain and how exactly it contributes to a more sustainable and fairer supply chain? Check out the article Fair technology brings transparency and sustainability to the food chain.

“The current system is unsustainable, so something has to change. The wrong people are making huge amounts of money from our food, on the backs of both farmers and consumers. There are a lot more unpleasant decisions we need to make in order to bring our food system back into balance. For example, I strongly believe in a government-imposed eco-tax, a model in which you pay more for bread produced with American or Australian grains and seeds than for bread produced with locally sourced ingredients. Companies such as Puratos can also play a role here, such as researching what ingredients are available locally. How should we adapt the local supply chain to continue meeting customer demands? What auxiliary substances will we need? For example, we currently don’t use any bread-enhancing products, because we believe our bread should be truly fresh. However, in order to make your bread accessible to a wider audience, you’ll likely need to use some auxiliary substances. In the future, it will be important for the major bakeries to actively come up with innovative ideas. Because in order to create a real movement, we need more bakers to join in, including institutes such as the Nederlands Bakkerij Centrum, Puratos and other major players in the market.” 

Curious about other methods of making your supply chain more sustainable? At Puratos, we've adopted the Life Cycle Assessment strategy. The LCA initiative is aimed to analyze the environmental impact of our products and help our customers to accelerate their sustainability ambitions. Find out more about Lie Cycle Assessment.

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