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Retail sales are expected to remain elevated as long as consumers are at home. But concerns around animal welfare are accelerating the shift to pasture-raised and free-range varieties.

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Fresh egg sales jumped 19.0% to $1.38 billion across channels in the 12 weeks ended Sept. 6 (versus the same period a year ago), reports Chicago-based market research IRI (iriworldwide.com). But volume was up only 6.4%, highlighting a continued shift to more expensive specialty eggs as well as a decrease in promotional spending, which often translates to higher retail prices. (Percentage of ACV on promo during the 24 weeks ended Sept. 6 was down 16.1% in MULO and the natural channel, according to one source.)

“We saw initial spikes in demand of more than 70% (volume) at the outset of COVID-19 in March when consumers were stockpiling eggs,” says Marc Dresner, director of marketing and communications for the American Egg Board (aeb.org), Chicago. “And while that has since stabilized, volume sales at retail (year-to-date) were still about 9% above average through summer and early fall.” He adds, “We expect retail demand to remain consistently higher than average as long as COVID-19 conditions persist and consumers continue to prepare most of their meals at home.”

“With more families eating at home, there is heavier consumption of eggs as an ingredient,” confirms brand manager Dan Kubiak of La Farge, Wis.-based Organic Valley (organicvalley.coop). However, he says, heavy users as well as those looking to cut back on trips to the supermarket are opting for larger pack sizes.

For example, reports AEB, during the week ended Sept. 5, sales of traditional dozens were up only 4.1% versus the same period a year ago. But sales of 18-, 24-, 30- and 60-count cartons jumped 11.7%, 68.6%, 8.6% and 25.2%, respectively. And in terms of equalized volume (EQ), almost as many eggs were sold in 18-count cartons as they were in 12-count cartons.

HAPPY HENS, BETTER EGGS

The other big shift in the category is from caged to cage-free and beyond, driven by consumer demand for humane treatment of animals. But their concerns aren’t completely altruistic. “Consumers continue to place more importance on quality,” explains Kubiak. “And hen welfare remains at the forefront as far as conveying quality, care and great taste.” In other words, a happy hen produces better eggs – and consumers are all about better eggs.

For the most part, “happiness” correlates with outdoor access and the ability for hens to live “the way nature intended.” So, while conventional egg volume rose 7.7% during the week ended Sept. 5, according to AEB, cage-free egg volume jumped 20.1%. And within the cage-free segment, “regular” cage-free egg volume was up 8.4% versus 20.9% for free-range cage-free eggs. (Organic egg volume rose 19.2% during the period.)

“We believe there is heightened interest in food sourcing – where food comes from and how it is produced – as a result of the COVID-19 pandemic,” says a spokesperson for Austin, Texas-based Vital Farms (vitalfarms.com). However, “We also believe there is still a significant amount of confusion among consumers regarding the link between egg classifications and the treatment of hens.” In addition to a timely new traceability feature that allows consumers to see exactly where their carton of eggs comes from, the company provides as much information as it can about how hens are raised on packaging and via its various social media platforms. But there’s still work to be done.

MAXIMIZE ‘ONLINE EGG SHELF’

While in-store opportunities are limited, manufacturers say the “online egg shelf” is an excellent vehicle for expanded consumer education. “[Websites] are a great place to educate consumers on specific products by providing key features and valuable information about specialty egg items,” confirms Sotheary Hom, marketing manager at Denver-based NestFresh. “With helpful details/information, consumers can be persuaded to trade up from conventional eggs to organic or pasture-raised eggs.”

Opportunities for consumer education aside, as the percentage of total consumer grocery spend represented by online sales moves toward 20%, retailers need to improve both the look and user-friendliness of their virtual egg sets, says Dan Arnsperger, CEO of Rogers, Ark.-based free-range egg producer Happy Egg Co. (happyegg.com). “Our entire category needs to focus even more on omni-channel solutions.”

While many egg suppliers are holding off on new product intros, Happy Egg is one of the few rolling out new shell egg SKUs this fall. To complement its 12-count large free-range organic eggs, the company is launching extra large free-range organic eggs in select retailers looking to maximize their premium egg offerings, reports Arnsperger. “Extra large eggs weigh more than 10% more than large eggs, but our retail price will only be 5% more, so we’re offering even more value for the money,” he explains.

CONSUMERS CRAVE CONVENIENCE

Although retail egg sales are up considerably, the USDA expects total per capita egg consumption to dip 2.9% this year, thanks to a significant decrease in purchases of egg-based products at foodservice. But just because consumers aren’t hitting the drive-thru for a breakfast sandwich doesn’t mean they don’t still need convenient solutions.

Consumers may be at home, but between work and overseeing their children’s online educations, “Their days are busier than ever,” says Vital Farms’ director of innovation Megan Shookman. “We know a growing number crave a protein-packed breakfast made with fresh ingredients, but they don’t always have the time,” prompting the company’s recent rollout of its first prepared egg product. Made with pasture-raised liquid whole eggs, pasture-raised cheese, humanely raised meats and vegetables, Egg Bites are the “I don’t have time to make eggs, eggs,” says Shookman. Ready in 45 seconds, they’re available in four flavors: Uncured Bacon & Cheddar; Uncured Ham, Peppers, Onions & Cheddar; Roasted Red Pepper & Mozzarella; and Sun-Dried Tomato, Basil & Mozzarella. Other newcomers to the burgeoning refrigerated Egg Bites segment include Pete & Gerry’s (Nellie’s), Organic Valley and, most recently, Hormel (Hormel Black Label). In the frozen department, Eggland’s Best recently followed up its new Omelets with three flavors of Egg Bites as well (Bacon & Cheese, Three Cheese and Sausage & Three Cheese). Other new egg-based products in the freezer include Jimmy Dean Casserole Bites and Veggies Made Great Frittatas, now available in two additional flavors made with Beyond Meat plant protein.

The other big-seller in egg-based convenience foods is hard-cooked eggs, a favorite snack among adherents of several popular lifestyle diets. The category saw a huge influx of new items the past two years, including EGG POP! from NestFresh, which offers cage-free hard-cooked eggs skewered on a bamboo stick in combination with a tasty dip or seasoning for an easy, healthy, on-the-go snack.

HARD TIMES FOR HARD-COOKED EGGS

However, hard-cooked egg sales have stumbled recently. Through Sept. 5, volume sales were down 16.3% versus the same period a year ago, according to AEB. “Pre- COVID, we were seeing a lot more innovation with eggs as a main ingredient in a finished product – whether egg bites, hard-boiled eggs or egg yogurt,” says Matthew Sherman, CMO of Franklin, N.Y.-based Handsome Brook Farms (handsomebrookfarms.com), which is preparing to launch an organic, pasture-raised egg-based yogurt called Chikaraka early next year. “However, almost all of those products were designed as on-the-go solutions. And the pandemic has had a material impact on much ‘going’ there is right now.”

When that changes is anybody’s guess, but Sherman believes innovation will continue. “Now that eggs are once again considered healthy – rightfully so – companies and consumers are recognizing their versatility as a primary ingredient in prepared and packaged foods.”

FRESH EGGS

Sales in supermarkets, drugstores, mass merchants, military commissaries and select club and dollar stores combined for the 12 weeks ended Sept. 6, 2020, according to Chicago-based market research firm IRI (iriworldwide.com). Percent change is versus the same period a year ago.

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