HAPPY CHICKENS MAKE FOR HAPPY RETAILERS

Consumers are increasingly considering environmental and social values when making fresh egg purchasing decisions.

It’s been a bit of a mixed bag for fresh eggs recently. While dollar sales are up 4.4% to more than $1.61 billion during the 12 weeks ended Dec. 26 (versus the same period a year ago), unit sales tumbled 7.0%, according to Chicago-based market research firm IRI (iriworldwide.com).

Brands seeing the biggest growth, both in dollar and unit sales, are positioned as premium, values-driven options. Among the top 10, Austin, Texas-based Vital Farms Fresh Eggs, which sells pasture-raised fresh eggs, saw dollar sales jump 59%. The Happy Egg Co., Rogers, Ark., registered a 10% gain. And Monroe, N.H.-based Pete & Gerry’s, which touts its use of holistic farming practices, enjoyed a 2.6% bump.

“In 2017, commodity egg sales represented 79% of all shelled egg sales,” says John Watson, vp of account and marketing stewardship at Nashville, N.C.-based Braswell Family Farms. “In 2021, commodity represented 74%, with specialty growing — for the most part — year over year.” All specialty subcategories, including cage free, organic, free range and pasture raised, are seeing rising demand, and it’s safe to say this will continue into 2022, he adds.

PREMIUM EGGS, HIGHER COUNTS TRENDING

Ted Robb, founder and CEO of New Barn Organics in Rohnert Park, Calif., attributes the rise of the values-driven egg to consumers’ newfound focus on where their food comes from. “Consumers have legitimate concerns about the environment and animal welfare,” he says. “They’re asking a lot of questions about who made [the products they buy], how they were made and how the animals were treated.”

But consumers’ motives aren’t completely altruistic. Manufacturers say the COVID-19 pandemic taught Americans a lot about food and cooking, and, as a result, consumers are increasingly attuned to flavor as well as values. “More and more people are realizing there’s truly a difference in the final product when the hen is treated better, fed better and the farm is better,” says Sean Womack, vp of marketing and new product development for Happy Egg. He adds, “The outdoor access category continues to grow — and will continue to grow — with cage free+ legislation.” (In January, Massachusetts became the latest state to enact a law prohibiting farmers from confining animals in a cruel way and banning eggs from producers who do not meet state-mandated conditions, even if those eggs are produced in other states.)

Today’s consumers are also paying more attention to their personal health and the role that food plays in helping them feel and perhaps even look better. “Eggs have great fat, protein and vitamin content — and a lot of fat-soluble vitamins specifically — which makes them an incredible delivery system,” says Womack.

Another COVID-driven trend is the shift to higher-count cartons. “Since COVID, people are making fewer store visits, creating a need for larger pack sizes,” says George Weaver IV, marketing and brand specialist at Utopihen Farms, New Holland, Pa. “If you can get 18 eggs versus 12, that will last a couple more days,” he explains. To help meet that need, the company will debut an 18-count of its Nature’s Yoke Legacy Free-Range Eggs later this year.

Weaver adds that consumers who picked up a love for baking during the pandemic are still loving Utopihen’s duck eggs. “The yolk-to-white ratio is higher, which makes cakes fluffier and creamier,” he explains. Dietary concerns may play into demand for duck eggs as well. The greater volume of yolk means the eggs are also more nutrient dense, which is perfect for those sticking to a high-protein diet. In addition, some people who are allergic to chicken eggs can eat duck eggs, making them a good alternative.

Plant-Based & Protein IN DEMAND

At first glance, the market for egg substitutes appears to be holding fairly steady, with IRI showing dollar sales of egg white substitutes (the larger of the two

subcategories) down just 0.2% and egg substitutes up 1.0%. But a closer look at the data shows much of the latter’s growth is being driven by the plant-based JUST brand, whose sales shot up 38.7% to $6.89 million, giving it the No. 2 spot in the egg substitutes subcategory. (JUST posted an 85.4% gain in the nascent frozen egg substitutes segment as well.)

“Plant-based eggs are arguably the most talked-about trend in eggs right now,” says Andrew Noyes, head of global communications for San Francisco-based JUST. “It’s a relatively new category compared to plant-based meats or milks, but plant-based eggs grew 168% in 2020, almost 10 times the rate of conventional eggs.”

JUST saw an opportunity in this category because eggs are the most widely consumed animal protein in the world, reports Noyes. However, a wide range of people are switching to a vegan diet for health or sustainability reasons (or because of food allergies). JUST’s pourable products allow those consumers to easily adapt their favorite egg-heavy dishes. In fact, several manufacturers of plant-based products have recently added new items made with JUST to their frozen lineups (think vegan breakfast sandwiches and pockets) for quick meals and snacks on-the-go.

In addition to plant-based, interest in high-protein diets like keto and paleo is still high among adults, while others are looking to add more protein to their kids’ diets for sustained energy. Chicago-based Egglife has been meeting that need for the past two years with a line of savory refrigerated egg wraps that can be used in place of tortillas. Its newest rollout is a cinnamon-flavored wrap billed as the first sweet egg-based wrap on the market.

‘A GAME CHANGER FOR CONSUMERS’

“It delivers exactly on what consumers have been asking for: something sweet without the sugar and carbs that they can feel great about consuming,” says chief sales officer Ross Lipari. “Made with 95% egg whites and with only 1 gram of carbs, these wraps are a game changer for consumers looking for low-carb, high-protein sweet options.” When merchandised near fresh eggs, the cinnamon wraps can be promoted as both a breakfast and dessert item, he adds.

With inflation rising and the pandemic continuing to throw curve balls, egg prices are on everyone’s mind. Robb has definitely noticed an increase in consumer price sensitivity during the pandemic. But the last two years have been challenging for producers as well, says Watson, citing cost increases, egg shortages, packaging shortages and general supply chain issues asmajor issues companies have had to overcome.

The thing that is most likely to keep consumers paying more for eggs is education. Par

t of that responsibility falls to brands, which must be transparent and proactive about telling their story, says Robb. If consumers who want those premium eggs can’t find relevant information about a brand’s environmental and farming practices, “They tend to go back to private label for the lowest price,” he explains.

Retailers can also play an important role in helping educate shoppers about the different choi

ces in eggs. “Consumers are looking to align on values, and there are a lot of opportunities for retailers to tell that story,” says Robb. Stores that help people determine the difference between various types of eggs, and take steps to provide them with choices that meet their values, stand a much better chance of gaining cust

omers, keeping them and seeing a higher ring at checkout.