Eggs 2022: Supply issues pile pressure on sales

Even before fears of eggs shortages hit the headlines this autumn, soaring costs were piling pressure on the category.

A combination of value, convenience and health credentials has made eggs a major success story in recent years. Even more so during the pandemic, when British Egg Industry Council data showed over eight billion eggs sold from March 2020 to March 2021 – one billion more than pre-Covid.

But as prices rise volumes are declining. The category shifted 38.3 million fewer kilos in the past year – although value losses were limited to 1% as average price per kilo surged 6.1%. Brands bore the brunt of the volume declines, suffering a 7.9% slide.

Noble Foods’ market-leading The Happy Egg Co has fallen even faster. Units are down 11.7%, which senior brand manager Brian Bircham blames on a softening of sales post-pandemic and shoppers trading down.

The former trend was to be expected because shopper behaviour “reset” after Covid, he says. Trading down, meanwhile, has been “especially true of families with young children, who are a key target audience for the Happy Egg Co”.

Still, trading down has actually benefited Noble’s Freshlay egg brand. It’s grown volumes 178.2% thanks to distribution gains and “consumers trading down from speciality eggs”, Bircham adds. The brand’s stablemate Purely Organic is up too – by 23.7%.

Stonegate Farmers, Noble’s closest competitor, has also shifted plenty of extra eggs. Its Clarence Court and Stonegate Estate brands have seen 2.4 million more kilos go through tills on the back of increased distribution.

The year ahead, however, could present a challenge to further growth for both brands and the wider egg category. Since the end of our data period in early September, the market has suffered supply shortages driven by two key issues.

First, despite repeated calls by producers for an increase in farmgate prices to at least 40p per dozen, due to soaring costs for feed and fuel, they had received less than half that as late as November. Long before that, however, many farmers had evidently felt enough was enough: the British Free Range Egg Producers Association reported in November that there were about 36.7 million egg-laying birds in the national flock – far below the 44 million capacity.

The situation has been further compounded by avian flu. Shortages have led a raft of retailers to ration eggs, with Sainsbury’s sourcing from Italy to make up the shortfall.

Several mults have finally upped their farmgate prices. But it will take time for that to filter through to encourage farmers to increase output. Until then, eggs will likely be in short supply across grocery.