The cage free rev­o­lu­tion - part two

Where to for SA pro­duc­ers?

The Poultry Bulletin - - CONTENTS -

This is the sec­ond ar­ti­cle in a two part se­ries, by Michel Brad­ford of De Heus with ad­di­tional re­search by G Brad­ford. The first part cen­tred on how the cage-free rev­o­lu­tion is gain­ing mo­men­tum through­out the world. This dis­cusses some of the op­tions avail­able to South African egg pro­duc­ers.

Learn from ex­pe­ri­ence

Eco­nomic and in­fras­truc­tural ar­gu­ments aside for now, what can we, in South Africa, learn from the cur­rent Amer­i­can and Euro­pean ex­pe­ri­ence?

Even where ex­ist­ing con­sumer be­hav­iour seems to be driven by price, the wel­fare lobby (with much sci­en­tific ev­i­dence on their side) can ex­ert a pow­er­ful in­flu­ence in the mar­ket place.

When one in­flu­en­tial cor­po­ra­tion makes a well­re­ceived and me­dia-flaunted pol­icy change, oth­ers will fall in line, in domino fash­ion.

Cor­po­ra­tions can make these changes be­cause it is a sim­ple, rel­a­tively in­ex­pen­sive mat­ter to write pol­icy changes into the op­er­a­tions of a big busi­ness, shift­ing the onus of cul­pa­bil­ity and in­fra­struc­ture cost away from the pur­chaser and on to the pro­ducer.

If pro­duc­ers were hop­ing that re­tail­ers would be less eas­ily swayed by wel­fare lob­by­ists than their coun­ter­parts in food­ser­vice and pro­cess­ing, it was a for­lorn hope. In the US and the UK, Costco, Tar­get, BJ’S Price Club, Aldi, Ahold USA, Al­bert­son’s Group, Su­per­valu, Tesco, Waitrose, Marks and Spencer, Sains­bury’s and the Del­haize Group have all moved to­wards sale of cage-free eggs at the re­tail level.

Goal­posts can move when no one is look­ing. Ac­cord­ing to the EU Com­mis­sion, in the EU, 56% of birds are housed in en­riched colonies and 44% are housed in non-cage sys­tems (barns, aviaries, freerange, or­ganic). Nev­er­the­less, there is dis­quiet amongst many pro­duc­ers that heavy in­vest­ments made since 1999 in en­riched cage sys­tems may have been wasted as US de­vel­op­ments ev­i­dence a stam­pede to­wards en­tirely cage-free pro­duc­tion. Pro­duc­ers are con­cerned that this re­cent in­vest­ment and the in­dus­try’s com­mit­ment to hen wel­fare will be over­looked as the cage-free rev­o­lu­tion takes hold.

Domi­nos are fall­ing in de­vel­op­ing coun­tries too. In less wel­fare-cen­tric na­tions such as Brazil, Mex­ico and Aus­tralia, pro­duc­tion pro­cesses are un­der re­view be­cause of global sup­ply chains and res­i­dent in­ter­na­tional pro­ces­sors. In South Amer­ica, the move by the world’s big­gest bak­ery group, Grupo Bimbo, to tran­si­tion to cage-free pro­duc­tion took com­men­ta­tors by sur­prise, but two of South Amer­ica’s big­gest restau­rant busi­nesses, Grupo Toks and Alsea, have since com­mit­ted to 100 % cage-free eggs by 2022 and 2025 re­spec­tively (Wattag­net). Alsea op­er­ate restau­rants such as Star­bucks, Burger King and Domi­nos in Mex­ico, Brazil, Ar­gentina, Colom­bia, Chile and Spain, and the com­pany is the fifth largest restau­rant chain in the world (Alsea.net). Mc­don­ald’s In­dia is cur­rently un­der pres­sure not to buy bat­tery-pro­duced eggs.

Although good wel­fare science may point to­wards en­riched cage sys­tems rather than cage-free sys­tems, con­sumer per­cep­tions will ul­ti­mately de­ter­mine what con­sti­tutes ac­cept­able wel­fare con­di­tions.

So­cial me­dia is chang­ing the speed with which ac­tivists can change things.

Where to from here?

Given that con­sumers around the world are de­mand­ing to know more, and feel bet­ter about, the ori­gin of their food, how to we pro­ceed here? Eggs from hens housed in cages are part of a host of is­sues, in­clud­ing ar­ti­fi­cial in­gre­di­ents and ge­net­i­cally mod­i­fied crops that are chal­leng­ing ma­jor food brands. Re­search shows that con­sumers do not trust en­ti­ties that rep­re­sent the food in­dus­try (such as food com­pa­nies, restau­rants and gro­cers) but they trust the farm­ers them­selves. Con­sumers also con­fess to know­ing lit­tle about agri­cul­ture but show a strong de­sire to learn more. This sug­gests that in­di­vid­ual farm­ers and egg com­pa­nies can take a more proac­tive role in com­mu­ni­cat­ing di­rectly with con­sumers to earn cred­i­bil­ity and in­flu­ence long-term buy­ing habits.

Do the maths

As an in­dus­try, we need to ex­am­ine our long-held stance that con­ven­tional cages are the only op­tion in our eco­nomic cli­mate. Fail­ure to do so would be to ig­nore global de­vel­op­ments com­pletely and risk our in­dus­try be­com­ing out­moded; ul­ti­mately re­duc­ing ex­port op­por­tu­ni­ties and shrink­ing lo­cal pro­cess­ing mar­kets. Yes, cage-free pro­duc­tion might in­crease egg prices, but by ex­actly how much un­der our par­tic­u­lar farm­ing con­di­tions? Let’s do the maths prop­erly be­fore we use this as a rea­son not to ad­just our sys­tems. Is it price which con­strains con­sump­tion or other con­cerns (taboos, choles­terol, wel­fare, etc.)? Could any price in­creases even­tu­ally be re­versed as the new sys­tems be­come main­stream and sup­ported by an in­evitable up-tick in rel­e­vant re­search? We have an op­por­tu­nity in this coun­try to en­gage early with pro­ces­sors, food ser­vice com­pa­nies and re­tail­ers to plot a rea­son­able and sus­tain­able path to any changes in pro­duc­tion sys­tems. This op­por­tu­nity was not af­forded to US pro­duc­ers. Big

cor­po­ra­tions there have made grandiose prom­ises to use only cage-free eggs within 10 years but, in many cases, have not set in­terim mile­stones for pur­chas­ing pat­terns. Pro­duc­ers are there­fore not guar­an­teed cage-free mar­kets in the near­future and are un­sure of when to in­vest in new in­fra­struc­ture. The re­sult is a chaotic time in the US in­dus­try, with egg prices floun­der­ing. If we are to learn from what is hap­pen­ing in the US, we need to be en­gag­ing with our cus­tomers and end-con­sumers now, to ne­go­ti­ate a fairer tran­si­tion for our pro­duc­ers. There still ex­ists time in which to ex­plore the fu­ture of egg pro­duc­tion in this coun­try with all stake­hold­ers so that all ben­e­fit. Or we can wait for the rev­o­lu­tion to over­take us.

So­cial me­dia ef­fect

That con­sumers still reach for cheaper caged eggs on the re­tail shelf, does not make them ac­cept­ing of, or com­fort­able with, the pro­duc­tion sys­tem. So­cial me­dia can be used very ef­fec­tively to in­flu­ence pub­lic opin­ion and harm busi­nesses. Cell phone cam­eras are om­nipresent. It is vir­tu­ally im­pos­si­ble for a busi­ness to de­fend it­self against Youtube or Twit­ter at­tack, un­less it has noth­ing to be de­fen­sive about. If, as a pro­ducer, you feel it would be dif­fi­cult to ex­plain your pro­duc­tion sys­tem to a group of lay­men, and have them un­der­stand what you are do­ing and leave them ac­cept­ing and ap­prov­ing of it, then the pro­duc­tion sys­tem al­most cer­tainly needs chang­ing. An on­line pe­ti­tion, driven by a sin­gle stu­dent, has just been used very suc­cess­fully to force Mc­don­ald’s SA to fol­low their US head­quar­ters in pledg­ing to go cage-free in South Africa by 2025. On the flip-side, so­cial me­dia could be used very ef­fec­tively by the in­dus­try to pro­mote eggs. The UK has in­creased per capita con­sump­tion of eggs by 9% in just one year through ag­gres­sive use of so­cial me­dia plat­forms. There is no doubt we can use these plat­forms to our ben­e­fit, but we need to make sure the same tech­nol­ogy doesn’t come back to bite us. Is your pro­duc­tion sys­tem ‘Youtube ready’? - be­cause so­cial me­dia plat­forms are un­for­giv­ing.

SWOT

With any busi­ness, it is pos­si­ble to iden­tify strengths, weak­nesses op­por­tu­ni­ties and threats. The strengths in the South African egg in­dus­try and its prod­uct are plen­ti­ful: nu­tri­tional value for money, stor­age life, ver­sa­til­ity, pric­ing com­pared to other an­i­mal pro­teins and na­tional self-suf­fi­ciency. In­dus­try weak­nesses in­clude low per capita con­sump­tion, wel­fare is­sues, ex­port lev­els and en­vi­ron­men­tal sus­tain­abil­ity. If we deal with threats be­fore op­por­tu­ni­ties, these in­clude in­er­tia, ig­nor­ing global trends, lin­ger­ing con­cerns about choles­terol, con­strained con­sumer spend­ing, so­cial taboos, low mar­gins, su­per­mar­ket con­trol of the mar­ket and so­cial me­dia. For­tu­nately, there are op­por­tu­ni­ties to dou­ble lo­cal con­sump­tion of eggs, to ne­go­ti­ate any tran­si­tion to cage-free pro­duc­tion on our own terms, to ex­ploit so­cial me­dia, to in­crease ex­ports and lo­cal pro­duc­tion of value-added egg prod­ucts, and to even­tu­ally equalise pric­ing be­tween caged and cage-free eggs. There is a vast mid­dle ground be­tween pro­ducer and wel­fare ac­tivist which can be suc­cess­fully ex­ploited if the need for dis­cus­sion is recog­nised early enough.

South African pro­duc­ers have an ex­cel­lent prod­uct and the re­source­ful­ness to de­velop pro­duc­tion sys­tems which will meet cor­po­rate and con­sumers’ de­mands for both price and wel­fare – but the time for dis­cus­sion and for­ward plan­ning is now. Wal­mart, Nestlé, Sodexo and Unilever all have foot­prints in South Africa and can ex­pect to come un­der pres­sure, like Mc­don­ald’s, to im­ple­ment their cage-free pledges in ev­ery coun­try of op­er­a­tion. The hori­zon seems to be get­ting closer for South African egg pro­ducer.¡

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