Retailers, including Albertsons, Kroger, and CVS Health announced plans this month to convert to 100% cage-free eggs in the next decade, amid a push from consumers and shareholders at US firms.
The change likely won’t hurt profits for retailers. US egg sales totalled $7.3bn (€6.53bn) last year, according to Nielsen, and that figure could rise if more retailers make the switch to cage-free eggs.
Consumers usually pay more than twice as much on average for cage-free eggs, $3.42 a dozen, versus conventional eggs, which cost an average $1.31 to $1.45 per dozen, according to the US Department of Agriculture.
But cage-free eggs only cost about 15c more to produce than conventional eggs for farmers, according to Daniel Sumner, director of the Agricultural Issues Center at University of California — meaning major profits may be ahead for the supply side.
“We have reached the tipping point and any companies — be they retailers, basic services or egg producers — that are still fighting this wave are going to be left behind,” said Maisie Ganzler, chief strategy and brand officer at café and catering service firm Bon Appetit Management Company.
Even so, it will take years for most retailers to make the necessary changes to their supply chains. While it can take 12 months to build housing for conventional egg-laying hens, it can take 10 years to do so for cage-free hens. Farmers often need to rebuild existing infrastructure or wait for new hens to hatch.
More than 60% of restaurants and about 90% of retailers who recently announced their move to cage-free eggs said it will take them at least five years to completely change their supply-chain, according to data from advocacy group Cage Free Future.
With a growing number of firms signing on to go cage-free, retailers are looking for new ways to differentiate themselves. Not having cage-free eggs by 2025 could be a major disadvantage, but having them first — well, that could be a golden goose.
The deluge of cage-free egg commitments could position the US to leapfrog over Europe, which currently has a much larger cage-free market than the US, Josh Balk, senior director of Food Policy at the Humane Society of the US, said. In the US about 14% of egg sales are either cage-free or free-range, according to Nielsen.
In the UK, the British Egg Information Service said 47% of egg sales last year came from free-range hens, an even more animal-friendly classification than cage-free. In the US, consumers and shareholders have been pushing restaurants, airlines, manufacturers, and grocers to move to cage-free eggs.