Eggs: Can free range crack the Out Of Home market?

Over the last 15 years a quiet revolution has been underway in the type of egg sold in UK supermarkets. Following years of negative publicity surrounding caged hens in particular and a wider concern about ‘factory’ or ‘intensive’ farming, it’s little surprise that free range eggs have grown as a category. They now dominate total sales at 67%, compared to just 32% in 2004 (Kantar Worldpanel)

Despite the growth of Free Range in retail, however, there’s one key sector falling behind in the ‘Egg Revolution’ – Out of Home. Primarily made up of foodservice (think dine-in restaurants, QSRs, takeaway restaurants contract caterers & more), a market estimated at £91bn pre COVID-19, cracking this market (if you’ll pardon the pun) could prove an extremely lucrative opportunity for Free Range egg suppliers. But just what is holding it back?

The most logical answer is Covid-19 and the restrictions placed on the foodservice industry – stifling growth and forcing the Out of Home industry to contract in a way never seen before. This means that menu development and product procurement levels are far lower than usual – with all areas of supply to the market impacted. However, Covid-19 has only had this impact over the last 14 months – and the industry has seen lower uptake of free-range eggs compared to retail for far longer than that. Will foodservice opening up again – it is predicted to grow by 54% in 2021 reaching 71% of pre-pandemic levels – present an opportunity for free-range egg suppliers to target this market?

Publicity could also be playing a part. Much of the media attention surrounding Free Range eggs and the campaign to reduce the amount of eggs from cage-reared hens we buy has centered on the retail industry, and supermarkets in particular. Retail chains across the board have made commitments to exclusively sell free-range eggs, with Morrisons becoming the latest supermarket to join Waitrose, M&S, and the Co-op in their free-range pledge.

Whilst this focus on free range is beneficial and value enhancing for the industry on the whole, the attention being so focussed on retail means that whilst consumers may be looking for free-range eggs in supermarkets, these concerns may be somewhat ‘out of sight, out of mind’ when it comes to eating out of home.  This being said, quick-serve giant Greggs has recently committed to using only free-range eggs – their record of spotting trends should serve as an encouraging example for the rest of the sector. On top of this, media attention is likely to prompt others to follow suit – so we would expect to see growth in this sector.

Another limiting factor is menu space. Eggs are very infrequently an item on their own on Out-of-Home menus, with the exception of omelettes. In terms of dine-in restaurant menus, there is often very little space to call out the origins/features of each ingredient – and much of the time (except when it comes to breakfast menus) eggs are not the main feature in dishes. Although breakfast is an occasion where eggs are often the ‘hero’, despite significant growth, dine-in breakfasts remain a relatively small occasion outside of hotels.  Quick service restaurants are a key player in out of home breakfasts and, much like in dine-in foodservice, there is often limited customer facing room calling out product features – with menus often displayed on boards within the outlet. This is not to say there aren’t opportunities here – disclaimers on menus and company websites highlighting ‘we always use free-range eggs’ are becoming more widespread, and are well received by consumers.

Although there are several reasons why free-range eggs may seem less popular in out-of-home, this is not to say there isn’t significant opportunity for producers. As foodservice reopens the industry is likely to follow the same shift as retail has – with consumers looking to support smaller, independent, local businesses – which are more likely to focus on quality products and purchase free-range eggs. Publicity is key here in getting the word out to customers that not only should they be looking for free range eggs out of the home, but that increasingly Foodservice and out of home food providers are going free-range.

Cracking down on British egg standards
British Lion, the UK’s egg industry representative, has launched a campaign to address the mislabelling of eggs, highlighting the importance of ensuring retailers are using British Lion eggs, w

hich must meet rigorous quality standards. Imported eggs may not be held accountable to such standards, generating concern amongst consumers, and surging a demand for more transparency from the food sector. The British Lion code demands that all eggs and feed are traceable, of which 90% of UK eggs currently follow. Tackling this issue will help consumers to trust the free-range label and feel more confident seeking it within the out-of-home sector – and thus is likely to fuel further growth for free range eggs.