Big Food yet to crack how to de­liver on cage-free eggs

South Florida Sun-Sentinel (Sunday) - - People On The Move - By Deena Shanker Bloomberg News

As con­sumers clamor for cru­elty-free pro­tein at the gro­cery store and in restau­rants, Big Food is oblig­ing them — hun­dreds of com­pa­nies have pledged to sell only cage-free eggs by 2025.

But has Cor­po­rate USA bit­ten off more than it can chew?

Pro­duc­ers are try­ing to cre­ate new hous­ing for more than 300 mil­lion egg-lay­ing hens across the U.S. — a gar­gan­tuan change that can’t hap­pen overnight. Cur­rently, the coun­try is only about a quar­ter of the way to those com­mit­ments, ac­cord­ing to Chris­tine Mc­Cracken, a pro­tein an­a­lyst at Rabobank, a Dutch lender spe­cial­iz­ing in food and agri­cul­ture. The Egg In­dus­try Cen­ter at Iowa State Univer­sity, mean­while, uses USDA data to es­ti­mate that about 17 per­cent of out­put is now cage-free, in­clud­ing or­gan­ics.

Go­ing for­ward, the tran­si­tion will cost com­pa­nies, which in­clude Wal­mart, McDon­ald’s and Gen­eral Mills, about $7 bil­lion, Mc­Cracken pre­dicts. That fore­cast is “roughly cor­rect,” ac­cord­ing to the EIC.

To nudge the in­dus­try for­ward as it con­fronts this task, the Hu­mane So­ci­ety of the United States re­cently sent out a sur­vey to the 100 big­gest food com­pa­nies, ask­ing them to re­port ad­vances they’ve made in the treat­ment of live­stock such as pigs and chick­ens. It’s also re­quest­ing in­for­ma­tion about com­pa­nies’ abil­ity to com­ply with new state laws, like Cal­i­for­nia’s re­cent man­date on an­i­mal hous­ing, and de­tails on what they’re do­ing to add more plant-based op­tions to their menus. Re­sponses are due June 1.

“Con­sumers and in­vestors are go­ing to have an op­por­tu­nity to see which com­pa­nies ac­tu­ally live up to their poli­cies,” said Josh Balk, vice pres­i­dent of farm an­i­mal pro­tec­tion for the Hu­mane So­ci­ety.

Some com­pa­nies are ready to re­port on their progress, while oth­ers are more ret­i­cent. Kraft Heinz said it now sources 60 per­cent of its eggs as cage-free or free-range glob­ally. Gen­eral

Mills reached 40 per­cent cage-free world­wide in 2018 and Camp­bell Soup said it’s at 16 per­cent. McDon­ald’s de­clined to com­ment on its progress, and Wal­mart didn’t re­spond to in­quiries.

The changes — which of­ten in­clude the plan­ning, per­mit­ting and build­ing of new barns — aren’t easy to make.

“It’s a ma­jor con­struc­tion project,” said Brian

Moscogiuri, an egg mar­ket an­a­lyst with Urner Barry.

But the pace will ac­cel­er­ate, Mc­Cracken said. She cited Propo­si­tion 12 in Cal­i­for­nia, which passed in Novem­ber and es­tab­lished more hu­mane hous­ing re­quire­ments for all eggs, pork and veal sold in the state by 2022. As part of these rules, all eggs sold will have to come from hens that are cage-free.

There is no uni­form cage­free sys­tem, but the United Egg Pro­duc­ers man­dates that each bird have 144 square inches of space. Caged sys­tems, mean­while, pro­vide 67 to 86 square inches. These spa­ces are also more ex­pen­sive for pro­duc­ers, be­cause they re­quire more la­bor and can be less pro­duc­tive.

Even so, food-ser­vice op­er­a­tors haven’t raised prices, as the higher cost of pro­duc­tion is still just a small part of the price of a menu item like an egg sand­wich. At the re­tail level, cage-free egg sales rose 10 per­cent in the 12 months through Feb. 23, ac­cord­ing to data from Nielsen. But those gains are largely driven by dis­tri­bu­tion into new stores, ac­cord­ing to Mc­Cracken. Not all cage-free eggs find a home, ei­ther, Moscogiuri said, mean­ing they are sold as com­mod­ity eggs and the pro­ducer loses the pre­mium.

DANIEL ACKER/BLOOMBERG

Chick­ens walk around out­side a barn at a cer­ti­fied or­ganic farm in Sh­effield, Ill.

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