Up another 9.5% during the most recent 12 weeks, fresh eggs are on a roll. But organic, non-GMO, pasture-raised and free-range specialty eggs are driving the most growth.
Sustained increases in demand among consumers still eating most meals at home — combined with a decrease in promotional support — sent fresh egg dollar sales up 9.5% during the 12 weeks ended Dec. 27 (versus the same period a year ago) to more than $1.54 billion across channels. Unit sales were up only 2.8%, according to Chicago-based market research firm IRI, but volume rose almost 6%, highlighting a continued shift to higher-priced specialty eggs and larger packages.
In fact, reports the American Egg Board (incredibleegg.org), Chicago, cage-free egg volume (+19.7%) grew three times faster than conventional (cage) egg volume (+6.6%) in 2020. In terms of package count, 18-, 60-, 30- and 24-count cartons (in order of popularity) all registered double-digit gains last year while sales of traditional dozens edged up only 2.9%. As a result, almost as many eggs were sold in 18-count packages, according to AEB.
The industry has also seen some movement to larger eggs. For example, a large chain in the natural channel recently with an XL Organic SKU from The Happy Egg Co. (happyegg.com), Rogers, Ark., with minimal cannibalization of its core 12- and 18-count large organic eggs, reports CEO Dan Arnsperger. While XL eggs offer 10% more egg for only 5% more money, making them a good value, manufacturers are less enthusiastic about other egg sizes, which just take up space that could be used for hot-selling specialty eggs.
ORGANIC SPECIALTY EGGS UP 17.7%
Organic egg volume jumped 17.7% last year, according to AEB, underscoring shoppers’ growing understanding of the value of organic certification. “As consumers continue to make healthier choices, organic foods — particularly organic eggs — are increasing in popularity,” confirms Michael Culley, owner and CEO of Elizabeth, N.J.-based CMC Food, maker of The Farmer’s Hen brand (thefarmershen.com), where organic sales are growing twice as fast as non-organic.
But organic eggs can be pricy, says John Brunquell, owner and president of Warsaw, Ind.-based Egg Innovations, which recently launched the Blue Sky Family Farms (blueskyfamilyfarms.com) lineup, one of the few major free-range egg brands that also offers a less expensive non-GMO option of specialty eggs. “The hens are still fed a grain that’s not genetically modified, so it’s similar to organic, but a little more affordable,” he explains. “It gives the cage-free consumer the ability to trade up at a lower, non-organic price.”
But non-GMO isn’t the only feed type in the news. For example, Manheim, Pa.-based Kreider Farms just added brown eggs fed a diet consisting of 20% hemp seed meal to its Chiques Creek (chiquescreek.com) lineup. Its Cage Free Hemp Eggs deliver more than three times more Omega-3s, four times as much Vitamin D and twice as much Vitamin B12 as standard eggs, according to the company, whose flocks are all American Humane Certified.
While third-party certifications provide assurances that even cage-free hens without outdoor access are treated humanely, Brunquell says “perpetually growing” interest in hen welfare is driving strong growth in the free-range and pasture-raised segments where his company competes. “There’s a growing understanding that laying hens are hard-wired to do certain things — perch, dust-bathe, pasture, etc.,” he explains. “And if you raise them in an environment that’s consistent with those natural behaviors, good things will happen, including lower mortality and higher productivity.” In fact, he adds, Blue Sky Family Farms flocks recently claimed two world records around longevity and productivity, “which proves that we’re on the right track.”
SUPPLIERS TACKLE SOIL HEALTH
Next, the company is focusing its efforts on improving soil health via multiple levels of vegetation, multiple species, etc. “It’s all part of being a good steward of the land,” says Brunquell, who believes a product that’s good for humans, hens and the planet will resonate with many consumers. The first eggs produced on farms that practice regenerative techniques should hit shelves in the next 30 to 60 days, he reports. And while it may take a couple of years before every farm in the Blue Sky Family Farms network makes the transition, that’s the goal, says Brunquell.
While he believes Blue Sky Family Farms is the first commercial egg operation in the world to move to regenerative farming, other suppliers are also making sustainability a priority. For example, says Sotheary Hom, marketing director at Denver-based NestFresh (nestfresh.com), “This year in particular, we’re thinking hard about how we can take the next steps to help not just our hens but farmers and the environment…. There exists an over-arching theme toward products considerate of all of those aspects.” Although she’s not ready to talk specifics, Hom says the company is working to provide sustainable packaging for all of its product offerings “as quickly as possible.”
Sales in supermarkets, drugstores, mass merchants, military commissaries and select club and dollar stores combined for the 12 weeks ended Dec. 27, according to Chicago-based market research ﬁrm IRI (iriworldwide.com). Percent change is versus the same period a year ago.
Other companies are redoing packaging for other reasons. For example, says Culley, The Farmer’s Hen recently debuted a bold new design intended to make it easy for consumers to differentiate between free-range, organic and pasture-raised options in a set that’s becoming increasingly chaotic. “We’ve also drastically simplified the overall design to make it easier for the customer to find the information they’re looking for,” he adds.
DEMAND FOR CONVENIENCE GROWS
Despite strong growth in the shell egg category, manufacturers continue to seek new opportunities in the value-added segment as well. “There’s a real polarization of needs within the category,” says Dan Kubiak, brand manager at Organic Valley (organicvalley.coop), La Farge, Wis., citing heavy shell egg consumption as well as demand for more convenient options. The company was one of many that launched Egg Bites last year, offering consumers a healthy new heat-and-eat breakfast option.
Another new value-added egg-based breakfast solution for the refrigerated set is expected later this year from Egg Innovations, which is developing a pourable product in various flavors that can be turned directly into an omelet, says Brunquell. “There’s nothing like that available in the free-range category yet,” he adds.
The Happy Egg Co. is also going “full steam ahead” on the innovation front, says Arnsperger, citing opportunities in the meal solutions segment. With consumers sitting down for meals like never before, “Now is the perfect time to bring new solutions into people’s lives.”
Suppliers say there’s also still plenty of white space in the hard-cooked/snack segment, which has fallen on hard times since the pandemic hit (equalized volume fell 14.5% in 2020) but is likely to bounce back once consumers are “on the go” again. In addition, says Brunquell, products like Peckish (perfectlypeckish.com), which pairs free-range hard-cooked eggs with various seasonings, are bringing some “pizzazz” to what has been a fairly boring category. (Egg Innovations acquired Peckish from Sonoma Brands last month.)
NestFresh offers a slightly different twist on the concept. Its cage-free, hard-cooked Egg POPs also come with a dry seasoning or dip, but they’re skewered on a bamboo stick so consumers’ hands stay clean. Available in four varieties, all of which offer 11 grams of protein per serving, the product is designed for consumers “who value both convenience and better-for-you options,” says Hom.
SCRAMBLING THE EGG SET
While it’s important to make room for all of the new convenience items, Kubiak says retailers should not take any space from shell eggs, whose baseline sales are likely to remain elevated for the foreseeable future.
“COVID-19 has really driven consumers to take a closer look at what they’re consuming…giving us confidence in the continued growth [of] natural foods like eggs,” says Hom.
However, the assortment could use some tweaking. “Many supermarkets are very top-heavy on cage-free, offering up to five virtually identical regional and national brands and just one free-range or pasture-raised brand,” says Brunquell. If retailers want to offer that many cage-free SKUs, they should at least be distinct from each other (beyond price), he continues. But an even better approach is to offer more of a balance between cage-free and free-range/pasture-raised specialty eggs.
The second most important recommendation is to educate consumers on the differences between different types of eggs. “In our research, 83% of consumers think cage-free means free-range,” says Brunquell. “They don’t understand that cage-free hens are still entirely confined to a building.” Suppliers do what they can on packaging and at POP, but that kind of consumer education requires sustained messaging from the retailer, especially on social media.
“There’s also an opportunity to educate consumers on today’s e-commerce platforms,” says Hom. “Simple visuals and descriptions can make a huge difference in sparking consumer interest and earning highly sought-after repeat purchasers.” She’s also bullish on telling the stories of egg producers in order to connect with potential customers.
Sales in supermarkets, drugstores, mass merchants, military commissaries and select club and dollar stores combined for the 12 weeks ended Dec. 27, according to Chicago-based market research firm IRI (iriworldwide.com). Percent change is versus the same period a year ago.
Specialty Eggs Driving Gains