An outbreak of avian flu combined with rising input costs is driving retail prices up and volumes down. But specialty eggs are holding their own
Fresh egg sales often spike in the weeks leading up to Easter, but a highly infectious bird flu that’s already killed 28 million birds nationwide has delivered a mixed basket of results. Although dollar sales were up 13.3% during the 12 weeks ended March 20 to more than $1.74 billion across channels, units fell 4.3% in the face of rapidly rising prices, reports Chicago-based market research firm IRI. And the situation has only gotten worse since then. At press time, the average price for conventional eggs was up 40 cents a dozen to $1.47 while cage-free prices rose 3 cents to $2.40 a dozen, according to the USDA.
SPECIALTY EGGS GAINING GROUND
But manufacturers of specialty eggs see a silver lining. “With commodity egg prices rising and the price gap narrowing — and in some cases coming close to parity — more consumers are moving to specialty eggs,” reports John Watson, vp of account and marketing stewardship for Nashville, N.C.-based Braswell Family Farms. Yes, that will put more pressure on specialty egg producers, but the hope is that consumers who try specialty eggs for the first time will taste the difference in quality, becoming buyers for life even after commodity prices return to normal.
The specialty egg segment, whose share of the total grew from 21.5% in 2017 to 27.5% last year, is also getting a boost from growing demand for products that are good for animals and the Earth. “We see the importance of hen welfare, regenerative and sustainable farming, and environmental safety resonating with egg consumers,” confirms Aaron Aslin, senior brand manager at La Farge, Wis.-based Organic Valley. But there’s still a lot of confusion around which eggs actually deliver on those needs.
“Consumers want to understand the differences between cage-free, pasture-raised, farm-raised, free-roaming and other attributes,” says Andy Linsky, vp of sales for Nature’s Yoke and Utopihen Farms, Lancaster, Pa. But there’s only so much space on egg cartons, so it’s up to retailers to help educate consumers at the point of sale through signage and other materials. Linsky is also a big proponent of third-party certifications “that help consumers separate the marketing hype from legitimate farming practices.”
Nature’s Yoke recently launched an 18-count package of its Legacy Free-Range Eggs to address the challenge posed by fewer consumer shopping trips. “As brick and mortar retailers compete with e-tailers, new sizes and varieties will help them differentiate,” says Linsky. He adds that Nature’s Yoke also offers both soy-free and duck eggs, which address growing demand for hypo-allergenic and nutritionally enhanced products, respectively.
While Eggland’s Best owns the lion’s share of the nutritionally enhanced segment, an exclusive new product from Rogers, Ark.-based Happy Egg Co., Large Brown Free Range Vitamin+ Eggs, recently started popping up on the websites of several Kroger banners. According to the online description, the eggs have more vitamin A, E, D, K, B7, B9 and B12 than standard eggs.
NEW AND EGG-CITING
While the onset of avian flu caused some egg suppliers to put the brakes on new product rollouts, a handful of new specialty items are making their way onto retailer shelves. Given the interest in its organic pasture-raised eggs, Farmers Hen House, Kalona, Iowa, recently introduced a non-organic pasture-raised product that offers high quality at a more accommodating price point, according to marketing director Brett Erickson. “It fills a product pricing gap between our organic free-range eggs and our organic pasture-raised eggs,” he explains.
Another new entry comes from Vital Farms, Austin, Texas, which recently debuted True Blues. The Certified Humane, pasture-raised blue eggs are laid by hens raised according to high animal welfare standards. Consumers can find True Blues at 100 Whole Foods locations across New York, New Jersey, Connecticut, Southern California, Southern Nevada and Arizona.
“We felt there was an opportunity to introduce something unique that our customers would gravitate towards,” says Heather Mace, director of brand management. “In True Blues, we believe that we’ve created a beautiful product that fills white space within the market.”
In the burgeoning regenerative agriculture space, meanwhile, Denver-based NestFresh recently launched a line of Regenerative Organic Certified Eggs under the New Barn Organics brand, which it purchased last year. “Consumers want products that are better for them and for the planet, and this certification offers them that level of trust,” says Kerry Robb, marketing director. “While some regenerative certifications allow farmers to apply pesticides to their land, our farms are certified USDA Organic, which prevents the use of these harmful chemicals. Also, each certified farm undergoes frequent soil testing, with the goal of improving each certified parcel over time.”
Outside the shell egg category, the market has welcomed a variety of egg-based prepared foods. For example, Organic Valley offers three varieties of Egg Bites ready to eat in as little as 90 seconds. And several manufacturers have rolled out breakfast sandwiches and pockets made with plant-based egg substitutes.
PLANT-BASED UP 42% LAST YEAR
The plant-based category grew 42% in 2021 while the number of households purchasing plant-based eggs jumped 50%, reports Minh Tsai, founder and CEO of Oakland, Calif.-based Hodo. “And in the past three years, plant-based egg dollar sales have grown 1,000%.”
To help meet that need, Hodo is launching heat-and-eat plant-based Vegan All-Day Egg Scramble, which not only tastes like scrambled eggs but has as much protein as chicken eggs (and 30% more than the largest egg alternative player) and zero cholesterol. It’s also high in protein, fiber, calcium and iron. “It’s the only ready-to-eat, plant-based egg scramble on the market,” says Tsai. But more is on the way. “This is just the first SKU within this protein-rich, convenient egg-alternative platform.”
Another player in the plant-based space, San Leandro, Calif.-based Spero Foods, recently launched the Pepita Egg, which is made with only seven ingredients and no soy, nuts, dairy, sugar, gluten or canola, says founder and CEO Phäedra Randolph. “Spero has created an egg that is better for the environment and more nutritious than an animal egg,” she claims. “Also, by using ultra-sustainable ingredients that are inexpensive and scalable, we have generated a plant-based option that is competitive in pricing with animal eggs.”
So what’s the biggest mistake retailers make with the eggs category? They tend to look mainly at turns, answers Libby Schwab, marketing director at Pete and Gerry’s Organics, Monroe, N.H., which produces the Consider Pastures line of Certified Humane Pasture Raised eggs.
“Having a primary focus on volume when analyzing assortment decisions can be risky,” she explains. Driven by a desire to buy products aligned with their own values around animal welfare, “Consumers are demanding more premium and specialty eggs…. If retailers don’t carry a wide range of offerings in that segment, consumers will be forced to downgrade their egg choices or to shop elsewhere.”
Schwab acknowledges that due to the increasing cost of feed, transportation, labor and packaging, “Pete & Gerry’s, along with others in the category, had to raise prices. However, we are confident that these new prices will not cause base numbers to change, as premium egg segments continue to outpace category sales.”