The bar is rising for what’s considered a happy chicken, sparking the hottest trend in the poultry market: the pasture-raised egg.
Pastured eggs come from hens that spend most of their time outdoors, dining on bugs and taking dust baths while also indulging in their favorite activities like scratching and perching. That’s a step up from cage-free, a label that consumers are finding is slightly less idyllic than they imagined.
It wasn’t that long ago that consumer demands for better animal treatment sparked the rise of the cage-free egg. Hens moved from the confines of 67-square inches to the wilds of the barn, with space to walk and stretch their wings — but rarely, if ever, outside.
In Iowa, the nation’s largest egg producer, Republican lawmakers earlier this year took notice of the cage-free trend and of retailers’ promises to someday steer clear of conventional eggs.
Lawmakers passed a bill, signed in March by Gov. Kim Reynolds, that clamped down — albeit it in a very limited way — on trends that could threaten sales of conventional eggs. The new law requires grocers that sell specialty eggs also offer conventional eggs — but only if they participate in a federal supplemental food program for women, infants and children popularly known as WIC.
The bill, backed by the Iowa Poultry Association, easily passed in a state that typically produces well over a billion eggs a month.
Iowa Sen. Dan Zumbach, R-Ryan, who chaired the Senate Agriculture Committee and managed the bill, called it “a home run, game-winning bill” that will ensure stores that sell cage-free, free-range and organic eggs also sell conventional eggs as a cost-effective product.
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The pasture movement, though, goes farther than the concept of cage-free eggs. It sends animals outdoors for sunshine and space to spread out. Compared with cage free, pasture is tantamount to bird paradise.
“These birds are jammed day in and day out in their own manure, and humans won’t go inside because it hurts their eyes — that’s cage-free eggs,” said Matt O’Hayer, chief executive officer of Austin, Texas-based Vital Farms, a leading pastured-egg seller. “Give me the mosh pit over the crowded elevator, but it’s still a mosh pit.”
Many consumers seemingly agree. Sales of pastured eggs, which didn’t exist as a marketing tool a decade ago, jumped 32 percent this year through Oct. 8, according to Vital Farms, which cited data from researcher IRI.
Free-range eggs, similar to pastured eggs except the chickens have less space, increased 8.5 percent. Cage-free eggs were up 3.9 percent, and the standard product from caged birds rose 0.3 percent.
At the same, premiums are coming down. Pasture-raised eggs used to fetch a whopping $12 a dozen at supermarkets. Greater competition among farms and lower costs drove prices down to below $5 recently in some stores.
Some of the biggest shifts in the protein industry in the past decade have come from increased consumer demands over animal welfare and sustainability. Eggs are a microcosm of the trend.
As giants like McDonald’s Corp. and Walmart Inc. pledged to upgrade, the cage-free hen population has exploded to 60 million in the United States, double what it was in 2016. Cal-Maine Foods Inc., the biggest U.S. egg producer, said in June it had increased its cage-free capacity. Voters in California passed a ballot initiative this month ensuring all eggs in the state are cage-free.
“Cage-free is going to be a commodity egg,” said John Brunnquell, president of Egg Innovations, the biggest pasture-raised and free-range producer with 1.2 million chickens. Increasingly efficient cage-free farms are driving down costs, and soon those eggs “will dominate the landscape,” said Brunnquell, who supplies Whole Foods Market Inc.’s 365 private-label brand.
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As that change takes place, demands for better welfare are likely to keep increasing — and that’s where the pastured egg comes in.
To be sure, even at $5 a carton, pastured eggs still fetch a hefty premium that many consumers aren’t willing to pay. Standard grade A large eggs averaged $1.78 a dozen in the 10 months ended Oct. 31, government data show. Pastured and free-range eggs are also still a small sliver of total production. Out of 330 million hens in the U.S. egg industry, fewer than 10 million, go outside, Brunnquell estimated.
Most giant retailers already sell free-range or pastured eggs, and offerings are increasing, producers say.
There are also incentives for farmers to make the switch. Producers can get higher, more-sustainable incomes and longer contracts by offering pastured eggs, industry executives said. Vital Farms says it has a long waiting list of farmers that want to supply the brand.
Dan Arnsperger, president of Rogers, Ark., based free-range producer Happy Egg Co., said the company has 33 small farms and may add 15 to 20 next year. He estimates that 30 percent of shoppers are willing to pay the premium for free-range eggs because of animal-welfare concerns.
In the past, “eggs suffered as a commodity where brands didn’t matter,” said Billy Roberts, a senior food and drink analyst at researcher Mintel. “But in recent years, with more premium offerings, there’s a market in consumers’ mind for egg options.”
The Bloomberg news service contributed to this report.