We have tracked the cage-free egg movement since February 2016. Farmers stepped up to provide cage-free products based on commitments and demands from restaurant, food service and grocery chains. Yet, cage-free egg buyers haven’t materialized in numbers remotely close to the anticipated droves. The price gap between cage-free and conventionally raised eggs continues to widen.
Source: Bloomberg, October 13, 2017.
It’s been bad,” said Marcus Rust, CEO of Rose Acre Farms Inc., the second-largest U.S. egg producer. It spent $250 million over four years to upgrade conditions; today about 20 percent of its hens are cage free. And now, Rust said, “we are shutting our construction program down.” Rose Acre is finishing two cage-free facilities under construction and then we’ll wait, for as long as it takes. “We are going to be in a holding mode until retail pays a warranted price.”
Also see: BottomLine Inc., October 24, 2017. The Organic Egg Hoax
INSIGHTS: This reminds us of the price versus value discussions common when establishing a premium brand. Consumers say want animals treated right. They say they wanted food grown for them using best practices. Ultimately, it has become table stakes versus voting with their hard-earned dollars. Valued brands are valued only when someone is willing to buy them and when they deliver recognizable experiences.