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Shell Game: Egg Category Enjoys Grade AA Growth
“I would say that consumption is up for the second year in a row. Based on that, I think that people are finding out that eggs aren’t as bad for you as people once thought.” — Brian Behnke, dairy buyer, Festival Foods
Jenna Telesca
August 19, 2013
7 Min Read
Buoyed by growing consumer interest in nutrition, the egg category sales growth shows no signs of cracking.
At Onalaska, Wis.-based Festival Foods, dairy buyer Brian Behnke has seen a boost in egg sales.
“I would say that consumption is up I think for the second year in a row,” said Behnke. “Based on that I think that people are finding out that eggs aren’t as bad for you as people once thought.”
Cholesterol is no longer the Big Bad Wolf for many consumers.
“We track consumers’ attitudes annually and year after year for the last 10 years, consumer concern about eggs and cholesterol has gone down,” said Kevin Burkum, vice president of consumer marketing at the American Egg Board.
Shoppers at Publix Super Markets, Lakeland, Fla., have also been steadily turning to this staple category.
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“Our egg sales are strong and our promotional efforts have been as well,” said Publix spokesperson Maria Brous.
Overall egg category dollar sales were up 3.7% at supermarkets, with a slight, 0.17% dip in unit sales over the 52 weeks ending June 16, according to IRI data that SN reported in its annual Category Guide issue last week. The egg substitutes subcategory also saw a sales lift of 4.5%.
Egg whites are doing well at Festival Foods, and Behnke attributes this success to customers looking for a healthier diet. He pointed out that shoppers are turning to eggs and Greek yogurt to find a protein substitute for red meat.
The American Egg Board also mentioned consumer preference for protein.
“People are recognizing the importance of having protein at breakfast, lunch and dinner,” said Burkum.
“Two-thirds of our protein right now in the United States is consumed at dinner and people recognize that protein has a lot of benefits as far as keeping you full, helping sustain your energy throughout the day, and so they’re looking for breakfast options that maybe aren’t so carb-based, and, of course eggs are an excellent source of protein.”
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Breakfast represents a fresh start to shoppers, so they want nutritious options, noted Burkum. Plus, consumers’ busy morning schedules have altered the way they approach breakfast.
“They may have a small meal at home before they go to work and then another meal mid-morning, say 10:30 in the morning,” said Burkum.
“And so the traditional sit-down breakfast, I think, is changing. I think that is certainly adding to this chaotic nature of things.”
With cholesterol concerns no longer a significant barrier, Burkum identified cleanup convenience as the biggest obstacle for increasing egg consumption, explaining that consumers typically use a pan, bowl and plate for a simple scrambled egg and then have to wash those three items.
In response, the American Egg Board has been working to get the word out to shoppers about simple egg recipes such as hardboiled or microwaved eggs.
Hen Matters
Retailers reported that sales for specialty eggs that focus on animal welfare — such as cage-free, organic, omega-3 enhanced and free-range varieties — are growing. However, the percentage of specialty eggs in relation to total egg sales varies by location. Typically these eggs represent a small portion of egg sales at supermarkets.
At Festival Foods, specialty eggs like these have gained steam, but the category only accounts for 5% of sales, said Behnke.
Surprisingly, Behnke said Festival Foods has had luck selling pasteurized eggs around a $4 price range.
“People are looking for something they know is going to be safe,” said Behnke.
At Middleton N.J.-based Foodtown operator Food Circus Supermarkets, the specialty egg category represents a much larger portion of sales.
Director of Operations Tony Abbatemarco approximated that 30% to 40% of total egg sales come from these varieties that call out the hens’ living conditions or special feed.
“We’ve really seen a spike with those eggs in the last 18 months … maybe a little bit longer, 24 months.”
It can be difficult to pin down exactly how important animal welfare is in the grand scheme of things for the average egg-buying consumer.
“There is what people tell you on surveys and there’s what people do in the grocery store,” said Jayson Lusk, professor of agricultural economics at Oklahoma State University.
“And on both fronts, I will say it is an issue of concern and growing in importance. So it is more important today than it was 10 years ago.”
However, 90% of eggs purchased are conventional, he said, in part because of the price premium for organic and cage-free eggs.
“It’s not that people don’t care, it’s that they don’t care enough to pay double the price,” said Lusk, who recently authored the report “Market Potential of Cage-Free Eggs” for the group World Society for the Protection of Animals.
That said, Lusk is optimistic about cage-free egg sales going forward.
“I don’t have a crystal ball or anything like that, but I think there are a number of factors that are likely to contribute to the growth of cage-free sales.”
Consumers growing more informed about current conditions for hens could push them towards cage-free varieties, Lusk noted, and an improving economy could give shoppers more of a disposable income for these premium items.
Read more: Safeway Organic Eggs 'Certified Humane'
According to a recent sustainability study by the Bellevue, Wash.-based Hartman Group, shoppers equate animal welfare to “healthier and more flavorful meat,” and think that animals given organic or special feed make the food safer.
The report also suggests that 14% of consumers are leaders in sustainability and 66% are “midlevel” consumers within the “World of Sustainability,” meaning they think about sustainability in their lives.
“That whole midlevel aspect is the greatest opportunity for most brands and retailers, and it’s the most interesting group because they’re very curious and tend to experiment a lot. There’s a lot of room to help them,” said David Wright, senior associate at The Hartman Group.
Shoppers are increasingly interested to hear the stories behind specialized brands that they don’t already know about, according to Wright.
“At retail, what we see a lack of is they leave it up to the producer to provide the narrative, but consumers, they’re interested in things like natural eggs and they want to see stories about who is actually producing it.”
Sidebar: Egg Bill Postponed
ALPHARETTA, Ga. — The United Egg Producers had hoped a bill that would require egg producers to use enriched cages for egg-laying hens would pass as part of the Farm Bill, but the group is no longer optimistic.
“It is likely that the Farm Bill will be passed this fall or early winter. The Egg Bill is very likely not to be part of the Farm Bill as an amendment,” said Chad Gregory, president and CEO of UEP.
The Egg Products Inspection Act — which is also supported by the Humane Society of the U.S. — would require all egg farmers to transition to a larger hen cage that includes a perch, an egg laying area and scratch area by 2029. A nearly identical bill failed to pass in 2012.
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Gregory noted that the bill’s sponsors, Rep. Kurt Schrader, D-Ore., and Rep. Jeff Denham, R- Calif., “are still actively and aggressively trying to get cosponsors and build support for the Egg Bill.”
“And they are hopefully as well as we are hopeful that we can find some other piece of legislation in the next year to year and a half that we can attach the Egg Bill to and pass it to provide certainty for egg farmers for the next 15 to 20 years.”
As for the unlikely partnership between the egg producers and the Humane Society, Gregory said it has been working out “really well.”
“It’s surprising to everybody, that we would partner with them and it’s surprising to everybody that we could actually trust them, but I can absolutely assure you that that’s the case.”
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