Amid shift to cage-free eggs, chains and customers assess, adjust

In a span of three months starting in November, two of the largest Missouri-based restaurant chains committed to cage-free futures.

Panera Bread and Hardee’s both joined a growing number of national chains that have pledged a shift to using only cage-free eggs within the next several years. It’s a move that has been trumpeted by companies but brings both costs and benefits for the restaurants and their customers.

The U.S Department of Agriculture defines cage-free eggs as those produced by hens housed in enclosed areas that provide unlimited access to food and water and the freedom to roam during the laying cycle. Free-range eggs meet those same requirements, but free-range hens also must have continuous access to the outdoors during their laying cycle.

Cage-free and free-range eggs generally are more expensive to produce than eggs from hens confined in cages.

Restaurants will pass the extra costs of cage-free eggs on to consumers, Missouri State University hospitality professor Melanie Grand said.

“They are going to have to raise the price of the product that they are producing,” she said.

Missouri Business Alert produced this story in partnership with Columbia’s KBIA radio, and a version of the story aired during KBIA’s weekly Business Beat segment.

Grand said because the national chains purchase in large volumes, they are able to get lower prices from egg farmers than small restaurants are.

Even so, the price of menu items will still go up when restaurants switch to cage-free eggs, University of Missouri agricultural and applied economics professor Joe Parcell said.

“If you go to cage-free, the laying hen’s going to drop that egg wherever she’s roosting,” Parcell said. “And then we’re going to have to go hand-collect them, and that’s going to add cost.”

Another reason cage-free eggs are more expensive than the alternative is that hens eat more when they are allowed to move, Parcell said.

Animal welfare

CKE Restaurants, the parent company of St. Louis-based Hardee’s, pledged a switch to cage-free eggs in late January. The burger chain’s parent company said the transition would be complete by 2025.

The opening line of the release announcing the decision touched on a theme many companies have cited in their choice to use cage-free eggs. “Animal welfare,” it said, “is an important issue to CKE Restaurants.”

The decision came after several national chains, including St. Louis-based Panera, made similar commitments in 2015.

Like Hardee’s, Panera touted its focus on animal welfare. “At Panera,” the company’s announcement began, “we’re on a journey to ensure the highest possible animal welfare standards.”

Though animal welfare is the primary reason restaurants have cited for their transition to cage-free eggs, some say that taste is another benefit of making the switch.

“I can taste the difference from a cage-free egg, just because it has a richer yolk and it’s a darker color,” said Patrick Connor, manager of Café Berlin in Columbia. “It tastes better.”

Connor said the restaurant, which is not part of a chain, switched to all cage-free eggs eight years ago. The change meant an increase of 30 percent in the restaurant’s egg costs.

For larger chains, the switching process is a longer-term project because of their scale. Panera, for instance, consumes 120 million eggs system-wide annually, according to a November press release.

Cost appetites vary

Parcell said the rising price of menu items driven by the switch to cage-free eggs might affect consumers in different ways.

“Whenever someone has a niche out there in the market, we’re able to target our consumer,” Parcell said. “And those are the consumers that in the beginning are willing to pay the highest premium for those products.”

Kameron McMillin, a high school senior from Columbia, said Panera is one of her favorites and she will continue to purchase food if the cost of cage-free eggs pushes up prices.

“When you come to Panera, you’re paying a little bit more than you would at an average place, because you are getting products that are better,” McMillin said.

Some customers will remain loyal to their preferred brands, but others may not. Emily Doosing, a Hardee’s customer in Columbia, said her decision to purchase cage-free products will depend on price.

“As a teacher, I don’t make whole a lot of money,” she said. “So that would definitely be pretty devastating to us if the prices increased much more than what they already are.”

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