Non-organic cage-free shell egg retail sales make up 13% of total U.S. retail shell eggs in the 52 weeks ending in early October 2019, according to IRI. We are just six years away from the end of 2025, when most major retailers pledged to purchase only cage-free eggs.
Walmart, the country’s largest grocer, has pledged to go 100% cage free with its shell egg purchases, but its cage-free egg sales make up only 13% of its shell egg sales, according to Compassion in World Farming’s Egg Track Report. Walmart would need to increase its cage-free egg sales by about 39% per year for the next six years to make the switch to 100% cage-free egg sales. This kind of a transition, if enough cage-free eggs were available, would only be possible if the retail price of cage-free eggs was brought much closer to that of cage-produced eggs, and that isn’t happening.
IRI reports that the retail price premium for cage-free eggs stayed steady over the past 12 months at $1.70-$1.80 per dozen eggs. This level of premium defies logic because the cost differential for producing cage-free eggs reported by producers ranges from $0.25 to $0.35 per dozen. If retailers were serious about converting consumer shell egg purchases to cage free, wouldn’t they be bringing the retail price of cage-free eggs down?
I understand the argument that if a SKU has low volume, it needs higher per-unit markup to maintain its pace on the shelf. But, if cage-free eggs are going to become the consumers’ standard egg at retail, volume goes up and markup percentage should go down, and it isn’t. Lowering the retail price premium will increase cage-free egg sales, but cage-free egg sales will never get to 100% if lower-cost cage-produced eggs are available.