Care of older adults, including meal service to home-dwelling individuals is under pressure for improving its resource utilization. There is concern for potential meal quality impacts of this development–and subsequently for the users’ food intake and nutritional status. The objective of the study is to examine the municipalities’ additional costs of initiatives to improve quality in the supply of meal services for the home-dwelling elderly. An economic optimization model was developed and used to determine the cost-minimizing meal production scheme under alternative specifications regarding production methods, ingredient sourcing, composition of dishes, menu variation, and delivery frequency for each municipality in Denmark, while taking heterogeneity of users into account. Alternative modifications to the quality standards within these dimensions have been analyzed. Results suggest that except for higher delivery frequency, the additional costs of the considered quality improvements are modest (1–5% of the current cost), whereas daily delivery would increase the cost by 10–15% in several municipalities. Despite relatively low additional costs, Danish municipalities may lack the economic incentive to undertake such quality improvements, because the additional costs cannot be passed on to the users; thus, municipalities will need to finance these costs by savings on other municipal services.