The aforementioned distributional issues should not sound so daunting as to paralyse stakeholders. Much can be achieved through targeted TCA assessment and stakeholder engagement to advance current levers that successfully increase the awareness, motivation and capacity of agrifood systems actors to maximize the value of agrifood systems globally. All case studies commissioned for this report, regardless of their scope, underscore the importance of involving all interdependent actors within agrifood systems in identifying effective levers to address hidden costs. Effective levers can both redistribute value between actors and create new value as public goods, making government action – local and global – critically important.
As hidden costs exist due to market, policy or institutional failures, agrifood systems actors will not be inclined to fully internalize them based solely on true cost information, as long as these failures are not corrected by policy. For example, agribusinesses may meet only those environmental standards required to maintain brand value and fall short of necessary transformative action. Some companies in the value chain may choose to offset their emissions rather than invest in new projects that could achieve a greater reduction in GHG emissions in the long run. By documenting such trade-offs and opportunities, TCA studies are already helping companies to make decisions that move them closer to the optimal functioning of agrifood systems.
Under increasing consumer pressure for sustainability and amid government regulations on health and environment, agrifood businesses have been self-regulating for quite some time. Voluntary sustainability standards, ESG reporting and multicapital accounting are all steps in the right direction. Global agribusinesses are also increasingly committing to contributing to achieving the SDGs, but as the business case motivation is not enough to fully account for the hidden costs, government regulation and action, as well as guidance from international organizations, are essential, as discussed in Chapter 3. Box 29 discusses one example of voluntary agribusiness action on product reformulation with the potential to address the hidden costs of high-sodium diets. The example also provides a cautionary tale, as the resulting decrease in sodium intake could have been ten times greater had consumer behaviour not veered towards saltier products. This highlights the importance of complementary actions that can facilitate behavioural change by bringing the most numerous actors – consumers – to the table.
Box 29Sodium intake trends: balancing product reformulation and consumer behaviour
Over the past two decades, sodium intake in the United States of America has declined, though the reasons are unclear. By examining detailed barcode-level data on nearly all packaged food products, researchers aimed to determine whether this positive development could be attributed to product reformulation or to a change in consumer preference. The study period covered the time immediately before (2007) and after (2015) the implementation of a key effort to reduce sodium intake – the National Salt Reduction Initiative (NSRI) – which prompted large food manufacturers to voluntarily adhere to proposed targets. Understanding these factors is crucial for policymakers to evaluate reformulation interventions against behavioural change policies.
The main findings include a 4.73 percent drop in sodium intake, though intake remains above recommended levels. While these results may seem encouraging, they have more to do with manufacturer than consumer efforts. Consumers actually shifted their purchases to saltier alternatives, significantly limiting the impact of reformulation efforts on total intake. Manufacturers’ product reformulation efforts could have resulted in a 53 percent reduction by 2015 had consumer shopping habits remained constant from 2007. However, changes in consumer behaviour negated more than 90 percent of these improvements. If consumer shopping habits in 2015 had remained similar to those in 2007, the sodium intake reduction targets set by the NSRI and the World Health Organization would have been met. In addition, the research reveals growing sodium intake disparities between different population groups, with black, Hispanic and lower-income households seeing less improvement than white and higher-income households.
The study suggests several policy implications when it comes to addressing both food supply and demand. Voluntary agreements among firms have effectively reduced sodium content, indicating that such initiatives can positively influence the supply side. However, consumer behaviour has significantly limited these gains, as evidenced by the shift to saltier products despite reformulation efforts. This suggests a need for policies that encourage healthier diets, especially in vulnerable communities. Nutritional assistance programmes could be used to promote healthier eating by disproportionately covering nutritious, low-sodium foods, fostering long-term behavioural change in vulnerable groups.
That is not to say that more cannot be done on the supply side, as evidence suggests that manufacturers have not done as much as they could in terms of reducing sodium content in products targeted at children (for example, snacks and ketchup) and have perhaps even worsened their nutritional profile. Policymakers should also consider making detailed nutritional databases accessible for academic research to support further studies and evidence-based policy development.
Despite the challenges, US sodium intake has decreased, influenced by both reformulation and consumer behaviour. Effective policies addressing both supply and demand, especially in vulnerable communities, are essential for sustained progress.
Ongoing efforts to contribute to the SDGs could benefit from collaboration with the TCA community, as standardized indicators for multiple goals are needed to facilitate the quantification of externalities and the design of incentive schemes that address trade-offs on a larger scale. This would also address some of the confusion created by the polarized discourse on healthy diets by bringing science-based indicators into the public domain.
