In recent months, a series of major companies in the US have announced they will switch to cage-free eggs – but how interested are consumers? Ben Cooper reports.

The moves by US restaurant chains, retailers and food manufacturers of plans to switch to sourcing cage-free eggs look to have set in train a transformation in the US egg manufacturing industry.

This month, Mondelez International and ConAgra Foods became the latest big names in food manufacturing to make such commitments, following moves by companies such as Kellogg, General Mills and Nestle.

While Mondelez International and Nestle have said they will make the total transition in the US by 2020 and in Europe by 2025, most food companies are following McDonald’s in setting a ten-year time frame to make the transition.

Given the controversy conventional caged production of eggs has generated for many years, the moves by major companies are not surprising. Animal welfare issues around intensive protein production, of which the debate over caged hens is a prime example, attract negative publicity from a vocal campaign community and the move to cage-free will allow companies to put paid to a potentially damaging reputational soft spot.

ConAgra, for instance, said it was making the move to “satisfy growing consumer demand for cage-free eggs”, while it was also “the right thing to do” from an animal welfare perspective.

However, while Paul Shapiro, vice president of farm animal protection at the Humane Society of the United States (HSUS), says the moves towards cage-free eggs have followed a “tidal wave of calls for an end to cage-confinement of chickens”, the level of mainstream consumer feeling on the issue appears open to question.

Glenn Hickman, CEO of Arizona-based egg producer, Hickman’s Family Farms, doubts the level of concern among mainstream consumers. “Consumers are very fickle and at times they may even be a little bit undecided but a minority of vocal consumers can have an outsized effect on the entire production and logistics change whether you’re talking about recyclable materials or the way eggs are produced. So I think we’re responding to a vocal minority and if we do this correctly we won’t penalise the rest of the consumers who may be ambivalent.”

The most obvious penalty unconcerned consumers might pay would be in higher prices, for their eggs or for processed foods using eggs in their production.

Clearly, in this regard the number of major customers announcing a switch to cage-free will allow some economies of scale to be generated.

Speaking of his own company’s plans for cage-free expansion, Hickman adds: “We intend doing this on a large enough scale that we can be very efficient and only have a modest price increase for the eggs at retail.” The wholesale price difference, he predicts, will be pegged at just 15%.

Keeping to this price differential across the industry would be a significant achievement. Hickman points out typically a cage-free unit will be double the cost of a conventional battery facility while switching to cage-free also entails a threefold increase in labour.

Notwithstanding the investment and significant technical challenges which the switch to cage-free entails, a rapid rate of progress is now being set.

According to US Department of Agriculture estimates, there was a 37% increase in cage-free egg production between September 2014 and September 2015. “Hardly a week goes by without hearing about a conversion away from cages now,” says Shapiro.

Among the major egg producers to have announced investments in cage-free production is Rembrandt Foods, the country’s third largest producer, which said in October it would continue to grow its cage-free operations and that “cage-free egg production will become the company’s standard”. Rembrandt said that over the past five years it has invested “almost exclusively” in cage-free and it was “excited for the opportunity to partner with restaurant chains, food manufacturers, grocery stores and foodservice providers to help them achieve their desired cage-free egg commitments”. Another major egg producer, Indiana-based Rose Acre Farms, announced last year it had brought online a new cage-free facility which can house some 25m layers.

Hickman Family Farms has just entered into a partnership with the MidWest egg producer, Opal Foods, to produce cage-free eggs in four sites in California. Each facility will house 2.5m hens. The project is expected to be completed within three years. In addition, Hickman is investing in new housing and renovating existing facilities on its other farms to ramp up its own cage-free capacity from 200,000 to 12m hens over the coming four years. Opal Foods, meanwhile, has just completed a 1.2m-hen cage-free facility in Missouri and has recently begun construction of a 1.5m-hen cage-free unit in Colorado.

“Where we see the market going is potentially within the next ten years there might be 45% of all the eggs cage free,” Glenn Hickman tells just-food. “So we’re both expanding in new construction and we are also renovating existing battery cages so that we can address what we think is going to be a big market.”

Despite the significant progress, the ten-year lead time set by McDonald’s and most food companies, although questioned in some quarters as unambitious, may be a critical factor in allowing the US egg industry to keep pace with the pledges. “All of the customers have been very accommodating because they know the tremendous amount of investment that’s going to be needed,” Hickman continues. “In some respects, the husbandry science has to be invented to do this on this kind of scale.”

Interestingly, Hickman says he does not see the move to cage-free as more sustainable, pointing to the additional use of resources cage-free egg production entails. “When we look at cage-free, one of the things we know is we can’t produce the eggs with the same amount of feed. We are going to have to feed the chickens more. There’s going to be more energy expended, there’s going to be more waste. So we know the chickens are going to be eating more feed to produce a given amount of eggs. So in that respect, they are not more sustainable. There’s no argument there in terms of feed efficiency.”

The moves announced by major producers suggest egg producers have fully woken up to the opportunities and are vying to win market share in the burgeoning cage-free sector.

“Customers have timelines between five and ten years and we’ve just decided that we think we can be there in four,” says Hickman. “We’re looking at this as a tremendous opportunity not only to service our current customers but to capture market share. Farmers typically don’t like to change and we’re betting that our competitors are going to drag their feet and that if we have the product we’re going to be able to win market share.”

There is clearly competition among egg producers to satisfy the requirements of food industry and foodservice customers and this can only be positive in terms of accelerating progress and allowing food companies to realise their ambitions regarding cage-free eggs more rapidly.