The cage free revolution - part two
Where to for SA producers?
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.
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.¡