Despite the tall order, multiple fast-food retailers, like birds of a feather, have sounded the call of the cage-free migration, and egg producers will have to comply with timelines — an area where buyers have shown their farmers some mercy. Wendy's sees themselves going cage-free by 2020. McDonald's and Dunkin' Donuts will not be full converts until 2025. Denny's says 2026. Taco Bell seems to be the most ambitious with a one-year deadline, but then again there's only so many times Americans can muster the intestinal fortitude to tack on an "a.m." to the crunchwrap supreme.
So what spurred egg producers to rush into cramped mega-barns in the first place? Now that retailers are promising more room for indoor hens, why are the timelines for making cage-free happen so protracted? And whatever the level of consumer demand driving these announcements, take note: the term "cage-free," as defined by the industry might not exceed, or even meet, consumer expectations.
What Is Cage-Free, Really?
In the world of agricultural certification, egg production models can be classified by the feed used to nourish a laying hen (i.e. organic, non-GMO) or by the average amount of space afforded to a laying hen. If we're talking about space, average area increases in the following order: conventional, cage-free, free-range, and pasture-raised, each standard meeting a minimum of a 0.5 sq. ft, one sq. ft., 21 sq. ft., and 108 sq. ft., respectively.
"The consumer is not getting what they think they’re supposed to be getting."
The cage-free classification in question can be quite complex. Some cage-free systems let birds outside, but these operations are often of a very small scale. Since cage-free certifications do not require outdoor access, the vast majority of "cage-free" egg producers opt for giant barns employing indoor housing systems — either "enriched colonies" or "aviaries" depending on how much capital they are willing to invest. Many opponents of the current industrial shift are calling the differences between conventional and cage-free marginal, at best.
Matt O'Hayer of Vital Farms, an Austin-based brand of pasture-raised eggs, finds the lack of outdoor access for cage-free problematic. "The consumer is not getting what they think they're supposed to be getting," O'Hayer says. "One square foot per bird in a packed building where the ammonia levels are so high it makes your eyes water, walking through manure their whole life: That's what a cage-free barn looks like; not a pretty scene. It's better than caged, no doubt. I'd rather be in the mosh pit at the front of the biggest concert in history rather than squeezed in an elevator with 15 people for my entire life."
With some form of hen confinement — whether the mosh pit or an elevator scenario — being the industry standard, it begs the question: What brought egg production indoors in the first place?
Why We Brought Egg Production Indoors
In Central Florida, Dale Volkert has worked in several scales of egg production. Before founding Lake Meadow Naturals, a small-scale, cage-free operation of 15,000 hens, he worked for a producer selling to supermarket chain Winn-Dixie. In the late 1980s, the grocer's rapid growth called for ramped-up egg production to meet the demand, resulting in the efficient, conventional battery cages. "That was when it went from smaller farms of 50,000 to 200,000 hens to complexes of one to three million," Volkert recalls. "It truly is like a factory. They were doing that because of efficiency, less man-power. One person could take care of several hundred thousand chickens and everything is automated."
Converting to complexes wherein eggs could be laid, washed, graded, and shipped out cut down on costs in a major way. However, Volkert became fed up with the industrial scale, and what he felt equated to a reduction in egg quality. He chose to return to his farm roots, beginning his small-scale, cage-free farm where birds enjoyed the freedom to roam in and out of a barn door, to dust-bathe, and engage in behavior likely associated with "cage-free." The eggs from Lake Meadow Naturals boast thick whites and rich, velvety yolks, for which his customers pay a premium — not only because of quality, but also for increased labor and the inefficiency of low-volumes. Volkert doesn't plan on expanding, however, recognizing that the "extreme value retail" demographic remain a big part of the consuming public.
"I think part of the consumer base does not care," Volkert says. "They just want cheap eggs... For a lot of those people, that's all they can afford. They're eating to survive. They're not concerned about the animal. But then you have the middle and upper-class that have those [animal welfare] concerns. Of that group, those that can barely afford it might buy the commercial cage-free as opposed to small-scale cage-free."
Why Are Consumers Paying Attention Now?
In spite of a shrinking middle class (coupled with the slow but steady expansion of the lower class), the call for cage-free has grown louder, leading many to wonder where the trend began. Some say 2015's cage-free snowball started rolling in 2008, when the Humane Society of the United States' campaign for Proposition 2, which called for new standards for confining farm animals, drew the largest voter turnout for a ballot initiative in the state's history, garnering a 63 percent approval. The initiative ordered an expansion of conventional cage sizes across the state of California, as well as any out-of-state hens producing for the golden state.
As it stood in 2008, chickens in California often could not stand, spread their wings, or do much of anything else. When voters passed Proposition 2, it was up to a consortium of people scientists, egg producers, and government officials to determine what the new cage size requirement would be; they came up with 116 square inches per bird (as opposed to the conventional battery cage size averaging 75 square inches).
"Consumers thought Prop 2 meant no cages, so they just started demanding ‘cage-free’ from the places where they eat."
A congressional push in Washington by the Humane Society failed, but the idea of cage-free birds had the public's attention, even if consumers were not entirely sure what the "cage-free" classification actually meant. Vital Farms' Matt O'Hayer believes this media attention spurred a swell of consumer consciousness. "All the media got consumers involved for the first time," O'Hayer says. "They didn't know about the nuance between smaller cages and bigger cages. They thought Prop 2 meant no cages, so they just started demanding 'cage-free' from the places where they eat."
With this in mind, the corporate shift to cage-free appears to be more of a pre-emptive move, wherein companies lay out their own phase-out timelines before government gets involved with demands far more abrupt. The California proposition, for example, gave an eight-year grace period to producers, but some say the shift found a way to hurt the industry, no matter how much breathing room it gave large producers.
How Will the Industry Move Forward?
Chad Gregory, president of industry group United Egg Producers, says Proposition 2 caused a 25-percent drop in production for California, costing the average California consumer an extra $14 per year for eggs. He envisions a similar outcome for the industry shift to cage-free, which calls for even more space than Proposition 2's requirements.
"This is an incredible undertaking. The cost to build these cage-free systems is about $40 per bird," Gregory says. "If you now have a customer that wants you to go cage-free, you have to spend $40 per bird. So a one-million bird egg farm [would cost] $40 million. 100 million layers, a third of our industry, would cost $4 billion... It's an incredibly expensive endeavor. If consumers want this, they're going to have to pay for it."
"It’s an incredibly expensive endeavor. If consumers want this, they’re going to have to pay for it."
Gregory says that once the switch is made, newer systems will not be as efficient. The populations are less dense, labor costs a little higher. And ultimately more facilities have to be built to spread out the bird population. He adds that producers will be forced to order new materials to comply with the trends, "It's an enormous undertaking to get the financing from agri-banks, to invest in these new facilities. It takes years collectively as [an industry]. At least 10-15 years for all this sheet metal to be cut and bent. Many of these companies are in Europe. The [materials] are shipped over. All the dirt has to be moved; these farms have to be rebuilt," Gregory says. "All of that, the money and amount of infrastructure, takes years to do. You can't just flip a switch and tomorrow all of the birds are cage-free."
Whatever models producers settle on as the best path forward, UEP's Gregory says they will support the choice. As far as the major retailers purchasing the eggs, he's less certain they are prepared. "I think they are quick to make this proclamation that they're are going to go [cage-free] by 2025, but I don't think they've thought through all of these logistics at this point."
Asked about its plan going forward, Denny's, who recently made the announcement to be 100-percent cage-free by 2026, stated via email that it was "unable to comment on the specifics behind this or other aspects of their procurement/sourcing process."
At Dunkin' Donuts, Christine Riley Miller, senior director of corporate social responsibility, says the company will keep an open dialogue with producers regarding sourcing strategy over the course of the 10-year transition. "We recognize that our guests and stakeholders are increasingly looking for cage-free eggs on menus, and that this is the direction the industry is headed," says Miller. As far as mapping their supply-chain, Miller says they are not ready to make public a specific plan, nor do they have plans to use a third-party auditor to ensure their supply chain is in fact cage-free.
Pasture-raised producer O'Hayer believes the growing consumer trend towards humane production will eventually leapfrog the timelines of foodservice retailers. "In the next year or two you'll see the customer calling them out, and at some point there will be a leader out there in the foodservice realm that will say, 'We're only going to do pasture-raised eggs, and skip this other step because I believe it will be the inevitable switch to free-range, pasture-raised, more humane ways of raising our farm animals that work so hard to produce food for us.'"
Some of the larger producers do have plans to improve efficiencies and conditions of indoor, cage-free aviaries and enriched colonies. For instance, Rose Acre Farms, the industry's second-largest producer, has a patent pending an aviary that properly dispatches bird droppings, reducing the need for the eye-watering ammonia referenced by O'Hayer. Rose Acre also plans to open an aviary in Texas in collaboration with Cal-Maine, the nation's a largest egg producer, in a possible merger between the two giants to better meet the industry's suddenly insatiable demand for "cage-free."
Emerging producers are also banking on a growing consumer desire for more sustainable production. Sporting a somewhat unconventional model, free-range company Happy Egg sources primarily from Mennonite communities in the midwest that each tend to one or two barns averaging 16,000 hens per farm. Their eggs can be found in major grocers, such as Wal-Mart and Albertsons, across the United States.
"We believe that the U.S. egg category is going to evolve the same way that European egg categories changed over the last two decades, and there will be a shift away from commodity to more specialty eggs," says Jen Danby, Happy Egg's chief marketing officer. "At the retailer level [in Europe], we saw a free-range segment grow from just 10 percent of the market to well over 55 percent within 15 to 20 years. It is absolutely conceivable that this could also be the case here in the U.S, but it will take some time."
"For now our main focus is getting these hens out of cages... then we’ll go from there."
Danby says to anticipate the demand, Happy Egg looked to Noble Foods' production planning intelligence, which dates back to the 1920s. "We're working about a year out all the time, so we're 12 months out in terms of planning. It requires confidence, not only in how shoppers are behaving, but also in your retailer customer base and in your ability to deliver." This year, Happy Egg plans to double production by culling eggs from one million hens spread across multiple small-scale farms, each affording chickens a minimum of 21.8 square feet, making them certifiably free-range.
Asked it the Humane Society of the United States will attempt to win consumer support for free-range or pasture-raised models, HSUS food policy director Josh Balk says they'll work one step at a time. "For now our main focus is getting these hens out of cages," he says. "I think we're going to finish that up this year and go from there."