Is Burger King’s Move Realistic?

April 30, 2012

Burger King is phasing in cage-free animal products. Will the supply keep up with the demand?

Burger King recently announced their intention to switch to 100 percent cage-free eggs for all US locations (franchised and company-owned) within five years (2017), as well as eliminating gestation crates from its US pork supply. The announcement comes at a time when Americans are demonstrating greater interest in their food. This move by Burger King strategically satisfies the growing consumer demand for humanely produced food and may trigger a domino effect in the industry. But can the industry bear such a huge change?

The desire of many chains to switch to cage-free is not entirely new. In 2007, Burger King became the first major US restaurant company to begin phasing in cage-free products.

“Even if you're buying a burger, you want to buy it from someone you like and respect,” said our own Phil Lempert to the Associated Press. “It's proven that consumers are willing to pay a little bit more for fairness, whether it's to humans or animals.”

Burger King’s decision could be game-changing in the supply business, as a huge market parts for humanely raised animals. Currently nine percent of BK's eggs and 20 percent of the pork served at its 7,200 restaurants are cage-free. In the EU, all eggs are already cage-free.

The Associated Press points out that, “hens would still be housed in a barn, but they have room to roam and perches and nesting boxes. Sows are also held indoors, but they would not be confined in the cramped crates while they are pregnant.”

“Right now, cage-free production only represents about five percent of the US egg market. The reason for Burger King’s five-year phase-in is because that’s the time frame they have worked out with their egg suppliers. The suppliers need that time to ramp up production of cage-free eggs to meet their 100 percent procurement plan,” according to a spokesperson at the Humane Society of the United States.

Private equity group, 3G Capital, took Burger King private in October 2010 and will soon release the company to the public. Positive publicity and fair treatment of animals certainly places BK in a positive light to the public.