Could free range egg production beat the recession?

The current recession is unlikely to stop the growth in sales of free range eggs, according to a market analyst at the Co-operative Bank.

Recent figures show that free range sales continued to grow during 2008, and Ryan Brightwell, co-author of the Co-operative Bank’s Ethical Consumerism Report, says the indications are that this trend is unlikely to change. Some ethical sales will be hit as a result of consumers tightening their belts during the recession, but his view is that the popularity of free range eggs is likely to beat the downturn.

He says he is still optimistic despite recent forecasts from

organisations like the CBI that the recession will be more severe than previously predicted.

Latest TNS figures produced for the British Egg Information Service put total free range egg sales at £263 million in 2006. Some £36 million of that was made up of free range organic. The following year the total increased to £314 million, with £40 million in free range organic. In the 12 months to the end of December 2008 total sales made £415 million, although organic free range remained almost static at just over £40 million. Non-organic free range posted a 36.9 per cent increase over sales for the previous year. It accounted for 51 per cent of the total value of the egg market for 2008.

"With free range now accounting for more than half of the total

market, this is one area where the ethical choice has become the

mainstream," said Ryan.

The Department of Environment, Food and Rural Affairs (Defra) recently published its final quarter figures for the throughput of eggs through UK packing stations in 2008. Total throughput for the year was 24.68 million cases – a 4.9 per cent increase on 2007. This increase was made up largely of free range eggs, says Defra. The final quarter total was 6.221 million cases. This also was a 4.9 per cent increase over the

same period the previous year.

In terms of volume, free range eggs now account for 32.4 per cent of all eggs produced, according to the Defra figures. The eight million cases of free range eggs produced during 2008 represented a 19.5 per cent increase on 2007. The 1.359 million cases of organic eggs produced in 2008 accounted for 5.6 per cent of total UK output – a slight decrease on the previous year.

The statistics continue to provide good news for free range producers.

A number of studies and surveys add to the good news, for they tend to support the Co-operative Bank’s view that consumers will continue to buy ethical products despite the credit crunch. The Institute of Grocery Distribution says that consumers are scrutinising value but not compromising on value. The IGD said figures showed that 17 per cent of consumers bought more Fairtrade products over the previous six months, 22 per cent bought more products promising high animal welfare standards and 17 per cent bought more local food. The trend towards local food is one that a number of free range egg producers are looking to exploit. In a recent article in the Ranger John Geldard outlined the opportunities that lay ahead for free range egg producers who were ready to embrace the local food market.

Another recent survey, for the independent money saving web site

mealsavers.co.uk, indicated that consumers were resisting the

temptation to reduce the quality of the food they ate. "They can’t afford to go out as much so the focus has shifted towards making the experience of staying in better," said Simon Morgan of mealsavers.co.uk. "People are planning more home cooking, more dinner parties and

producing their own food rather than spending it in the restaurant."

The survey, which was conducted online during December and January, was encouraging for those like free range egg producers who are involved in the quality end of the market. Some 67 per cent of those who took part in the survey said they did not look for the cheapest prices for fresh produce. They would rather have less food of a higher quality.

There are those, including Amanda Cryer at the British Egg Information Service, who argue that eggs have an advantage in a recession in that they are seen as an economical food. This year the BEIS is launching a series of recipes costing less than a pound as a response to the credit crunch.

Ryan Brightwell at the Co-operative Bank does not believe that ethical trade will escape the effects of the recession completely. "We do not take the view that ethical consumer markets will be entirely immune from the recession, but we do consider that areas where there is some form of smart intervention, whether that be from the Government or from retailers, will be more resistant to any effects. Free range eggs, where some retailers have intervened to remove caged eggs from their shelves, is one of those areas," he said.

The Co-operative’s group technical manager, Ian Burgess, said the sale of free range eggs was holding up well. "In terms of ethics, free range eggs is a relatively cheap one to buy in to. Buying organic is a step further." National statistics show that organic sales have been struggling in recent months as the recession has begun to bite.

All shell eggs sold by the Co-operative are free range. The organisation has also made a commitment that by the end of this year all liquid egg in its own brand products will be free range. Ian Burgess said the Co-operative was on course to achieve that target, with only a relatively small number of products left that had not made the transition.

"That is the way the retail market is going. Sainsbury recently announced the decision to stop selling cage eggs. The market is moving away from cage eggs. There is a price difference for people buying free range, but it is not a big price difference," said Ian, who said eggs were a good value source of protein. "There is nothing at all wrong with a nice Spanish omelette for a meal."

The Co-operative bank published its annual report on green spending in December – a report that was optimistic about the prospects for ethical consumerism during the current recession. Since then a number of financial and business organisations have warned that the recession will be far worse than they originally thought, but the Co-operative has seen no negative effect on the sale of free range eggs.