Egg Sales Stable Despite Soaring Prices

ROSEANNE HARPER

CHICAGO — Egg sales have not taken a beating even as prices soar to new levels, a recent research report shows.

Indeed, consumers are using the same volume of eggs they've been using since 2005, according to Mintel, a consumer research firm here.

“The volume has remained remarkably stable over the last few years,” Mintel researchers report. “Consumers are using 2.6 to 2.7 dozen eggs per month.”

There has been a trade-off, however, with consumers buying fewer specialty eggs.

Mintel's report, released this spring, shows nine out of 10 respondents buy regular eggs, while 17% buy specialty eggs such as free-range and organic. Another 11% of respondents buy egg substitutes.

Total egg dollar sales growth has jumped more than 26% between 2005 and 2007, and 30% between 2002 and 2007. Sales hit $5.1 billion in 2007.

That dollar growth has been driven in part by price inflation caused by rising production costs. Market forces — including rising corn prices, rising fuel costs and producers being reluctant to risk over-expansion — pushed the price of eggs up to an average of $1.68 a dozen in 2007, up 34% from 2006.

Prices have soared even more since 2007. The U.S. Department of Agriculture/Bureau of Labor Statistics figures most recently showed the average price of a dozen Grade A large eggs at $2.18 in January 2008. That's in sharp contrast from eight years ago. The agency's statistics in January 2000 showed the average price of a dozen Grade A large eggs at 98 cents.

But after a 34% increase from 2006 to 2007, this year's prices are probably making an even steeper climb, Mintel researchers said.

“What has surprised me, both as a researcher and as a consumer, is how quickly prices have gone up,” Mintel senior researcher/editor Marcia Mogelonsky told SN.

That the volume consumers purchase has remained stable is not surprising, she added, because eggs are such a good source of protein and are used for more than one meal.

“There are multiple uses, including as an ingredient in baking, for instance. Even if you use a cake mix, it takes three eggs. What's more, eggs keep longer than most perishables.”

In fact, the USDA says eggs stay fresh in the refrigerator for up to five weeks after the purchase-by date. Most consumers, though, researchers have found, use them within two weeks to a month.

Eggs also are considered healthy, a definite plus in today's quest for good health and fitness. In fact, 88% of respondents in Mintel's research consistently “believe eggs are a healthy part of a diet.” That's up 6% from 82% of respondents who said that in 2006.

Supermarkets could gain egg sales, especially with their private-label brands, in these tough economic times. As meat prices continue their ascent, the egg, even at its present price level, could be seen as a bargain compared with other proteins.

“Eggs are semi-recession-proof,” Mogelonsky said. “It's a good environment now for private label, but not for specialty eggs.”

Eggs also are one of the few items in any category that aren't used by mass merchandisers and club stores to undercut supermarkets' prices, Mogelonsky pointed out. It's probably because the margin is too small for anyone to bother with. Supermarkets control nearly two-thirds of the shell egg market, and their sales increased by 31% from 2005 to 2007. This is substantially more than the 20% sales gain during that period in other channels, which include Wal-Mart, other mass merchandisers and club store sales.

The egg market had grown substantially between 2002 and 2004 on the strength of the low-carbohydrate diet phenomenon, but declined some 20% in 2005 as the fad faded.

Consumers will continue to eat eggs no matter the price this year, but as their concern about high food costs becomes more acute, some of them will stop buying more expensive organic or other specialty eggs, researchers said.

Eggland's Best, the first producer to have an omega-3 egg, currently holds a 7.9% share of the market, but that could be eroded this year, as budget-conscious consumers may trade off the specialty eggs they had been buying for lower-priced regular, private-label eggs.

Among respondents who do not purchase specific types of specialty eggs, price is an issue, but skepticism about benefits and health concerns also limit purchases, Mintel's research shows.

For instance, 60% of respondents in 2008 who said they don't buy free-range eggs, and 62% who said they don't buy organic eggs, said it was because of the price. Mintel, in 2006, asking the question a little differently, found that 37% of respondents said they don't buy free-range or organic eggs because of the price.

A puzzling finding in this year's research showed that now 59% of respondents said they believe that organic eggs are no better for you than non-organic. That's up 10% from 49% who said that in 2006. But in contrast, 38% in the most recent poll believe free-range eggs are better for you, up from 21% who said that in 2006.

It's not clear why they perceive free-range eggs to be better for them.

“I think it shows that consumers are just generally confused about product claims,” Mintel's Mogelonsky said in a recent interview.

“I'm amazed, too, that there are people who still think brown eggs are healthier than white eggs.”

In the recent research, 73% of respondents agreed that there is no difference in health properties between white and brown eggs, but 18% said they believe brown eggs are more healthful than white eggs, and 11% believe white eggs are more healthful than brown.

The Mintel egg research, completed in February, surveyed 2,000 consumers, age 18 and over, via the Internet.