Inflation and avian flu drove dollars up an eye-popping 39.1%, while units fell only 1.4%. And the premium segment continues to gain ground.
Facing the twin headwinds of inflation and avian flu, fresh egg dollar sales jumped a whopping 39.1% to $1.99 billion during the 12 weeks ended June 12 (versus the same period a year ago), reports Chicago-based market research firm IRI (iriworldwide.com). Still, unit sales were down only 1.4%, highlighting eggs’ affordability compared to other proteins.
“While some demand softness may reflect price volatility, eggs remain one of the most affordable, high-quality proteins available and an easy, versatile option for shoppers looking to stretch their budgets while delivering the taste and nutrition their families desire,” says Marc Dresner, director of integrated communications for the American Egg Board, Chicago.
But since the pandemic, the nutrition piece has taken on greater significance, as consumers recognize the importance of vitamins and immunity boosters, says Whitney Fortin, vp of marketing at Rogers, Ark.-based Happy Egg Co. Still, Americans are more deficient in Vitamin D than ever before. To ensure they get the recommended daily amount, Happy Egg is introducing Free Range Vitamin Plus Eggs that contain two times more vitamins B7 and B9 and 10 times more vitamins D and E versus standard grade A large whole eggs.
“While eggs are already among the most functional foods available, all it takes is adding in some more goodness through the hens’ diet to ultimately meet our end consumer’s needs a bit more,” says Fortin. Vitamin Plus eggs will be available starting next month.
‘The middle tier of the egg category may need to shrink a little to make room for more premium egg offerings.’
PREMIUM EGGS CONTINUE TO GAIN
While conventional eggs own 73% of the total egg market (in terms of equalized dozens), volume dropped 11.6% year-to-date through May 21, according to NielsenIQ. Cage-free eggs, on the other hand, represent 18% of the market, but their sales shot up 46.3% — aided, no doubt, by cage-free legislation in California and Massachusetts, according to Dresner. The free-range (+13.6%) and pasture-raised (+27.9%) segments also saw big volume gains, though they account for only 7% and 2% of the category, respectively. The organic segment is also on the rise (+2.9% year-to-date) while the non-organic segment lost 3%, boosting organic share to 7%, reports Nielsen IQ.
Beyond legislation, what’s driving the shift? Obviously, consumers are concerned about animal welfare, says Paul Myers, marketing and communications specialist at New Holland, Pa.-based Nature’s Yoke. But they also believe that hens raised the way nature intended produce more nutritious eggs.
“Consumers are rapidly turning to brands that…offer tasty, nutritious, free-range eggs from hens that have plenty of time and space outdoors to live happy, fulfilling lives,” says Myers. The newest additions to the Nature’s Yoke lineup are a Legacy Free-Range 18-count and Omega-3 Free-Range six-pack, but Myers says its Organic Free-Range dozen has the most potential because it meets multiple consumer needs in a single product.
Indeed, free-range and pasture-raised are driving the most growth within the organic egg segment because they check so many of consumers’ boxes, reports Emily Hahn, senior category strategy manager at Monroe, N.H.-based Pete and Gerry’s Organics. But the newest addition to the company’s portfolio is Consider Pastures, a line of pasture-raised eggs produced using regenerative agriculture principles that improve the quality of the land as well.
EDUCATION DRIVES SPECIALTY SALES
The regenerative egg consumer is typically an older millennial or younger Gen X shopper who wants to align their spending with their values, says Ted Robb, co-founder of Rohnert Park, Calif.-based New Barn Organics. The company recently debuted Regenerative Organic Certified Eggs, and he believes the certification will resonate with its customers.
Even in the current inflationary environment, consumers are trading up to specialty eggs, but Robb believes their knowledge of the category — not their income level — is the primary sales driver. That’s one reason he says retailers need to prioritize and promote brands with third-party certifications that maintain certain standards and build trust with consumers. He adds that the price differential from the low to high end of the egg category “isn’t a significant distance for most consumers to travel.” But they won’t do it if they don’t understand why it’s worth the extra money. Egg suppliers can only provide so much information on package, leaving much of the work to retailers.
However, “Many retailers in California and Massachusetts waited until the cage-free transition took place in their state to begin educating consumers on the benefits and differences between cage-free, free-range and other outdoor access segments,” reports Karen Braswell, senior category insights manager at Happy Egg Co. “Having better in-store consumer education at the shelf allows for clearer segmentation and encourages consumers to trade up.”
But as consumer demand shifts, so must retailer assortments. “The middle tier of the egg category may need to shrink a little to make room for more premium egg offerings,” says Robb.
Indeed, retailers that don’t expand their specialty egg offerings quickly enough risk losing shoppers to other retailers, adds Braswell. However, she cautions against adding too many brands, which leads to confusion for the consumer. Depth of assortment, not breadth, is often a better strategy.
PLANT-BASED EXPANDS INTO NEW DAYPARTS
Retailers also need to make room for plant-based egg
alternatives, which are popping up in a variety of conve-
nience products for every daypart. For example, San Francisco-based JUST Egg comes in a variety of formats, including pourable, folded and sous vide bites, but the plant-based egg substitute is also included in products from brands such as Mikey’s, Crepini, Field Roast and Kellogg’s Incogmeato. Recently, the company launched a pair of JUST Egg Meals (Spring Greens and Chili Crisp) that meet demand for convenient, healthy entrees that also offer interesting flavors, says chief revenue officer Matt Riley.
Overall, he adds, unit sales at JUST Egg have increased more than 36% while both chicken eggs and the broader egg substitute category have seen units decline.
Meanwhile, Austin, Texas-based Crafty Counter produces vegan hardboiled eggs under the WunderEggs brand, and the company hopes to develop a plant-based egg alternative for every type of egg, says marketing manager Rachel Dolecheck.
“WunderEggs, along with many other plant-based egg offerings, contain zero cholesterol, offer plant-based protein and are cruelty-free,” she explains. “Plant-based eggs also offer a level of innovation in the food industry, which in turn is helping to slow down climate change by reducing the environmental footprint lower than that of a chicken egg.” n
