“Like all businesses the region’s egg producers are currently facing a difficult market. However along with the challenges there are lots of exciting new developments and future opportunities,” says Christine Young of Sunny Hill Eggs, the North East’s largest producer of free range eggs, who has been taking stock of the latest industry feedback at the recent IEC Conference.
Christine YoungEgg producers are facing steep rises in cost due to the increase in feed prices, a requirement to use non-GM feed and extra costs due to welfare regulations. The average cost of half a dozen free range eggs in a supermarket is now around £1.80. Christine explains, “People want to have their food produced more sustainably and ethically however they need to realise that food produced in this way does cost a little more.”
Until recently this message seemed to have been getting through to the public. The latest DEFRA figures show that in 2010, 45% of eggs produced in the UK were free range and 5% barn eggs. However two thirds of those involved in catering outlets still use cage produced eggs. It remains to be seen whether the public demand for better welfare will continue during current difficult economic times or whether price will become the major factor in any purchase.
At the conference Steve Murellis, Managing Director of Tulip Foods, formerly with Tesco, reiterated the importance of responding quickly to consumer demand, being competitive on price and offering continuous product innovation. This means that everyone involved in the food chain including producers will need to work together and invest in people and products to make this happen even though the market is not expected to grow this year.
For the egg market this is particularly hard. Consumers take just 6 seconds to buy an egg, 2 seconds to choose which egg they will buy and 4 seconds to open the box and check for cracks. However there may be innovations such as new 100% bio degradable round egg boxes made from coconut.
This was backed up by Professor David Hughes Emeritus Professor of Food Marketing at Imperial College London. More ethical production is part of a global trend with large corporations such as Walmart moving towards sustainable farming even though they are finding it difficult to meet the targets. Thanks to concerns on food supply and high level campaigns such as the Yeo Valley advertising campaign farmers are now back in fashion. “The key is to successfully market sustainability, this is something that the free range egg market has been doing for some time. Our eggs do cost a bit more but our customers generally understand the reason for this,” says Christine.
Several of the speakers were keen to emphasise the fact that food production is very much a global market. Producers will be faced with having to feed a world population expected to reach nine billion by 2050 and a rising demand for a more protein rich diet in developing countries. “It is estimated that the world will need 500 million extra tones of grain in the next 10 years. This is a large threat to the egg industry as we are high consumers of grain, but on the bright side hens are very efficient converters of grain.”
Currently only 2% of eggs are traded internationally compared to 60% of beef. However in the next 10 years, with demand driven by developing countries, the egg market is expected to increase in size globally by 20% compared to 10% for beef. Egg growth in China is expected to be 40%. Christine who was selected as a Nuffield Scholar is particularly well placed to advise on this global market as she has studied egg production and marketing in many countries.
“This could give egg producers such as ourselves opportunities not just to export product but also knowledge of best practice in production. Generally although we expect this year to be tough, we are still at the forefront of producing food in the way that consumers are increasingly demanding and the future for producers is very promising.”
Sunny Hill Eggs are stocked in greengrocers, delicatessens and farm shops across the region as well as selected branches of Asda, Morrisons and Tesco. They also supply to many of the region’s schools and educational establishments.
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