Leverage the sunny side of eggs

November 13, 2009

Eggs may be a nutritional powerhouse food, and a cost-effective protein source made for today's economy.

Eggs may be a nutritional powerhouse food, and a cost-effective protein source made for today's economy. Yet with all that eggs have going for them, retailers aren't on their game when marketing this versatile center-plate item that fits every day part and even the stingiest of budgets.

Except for price promotions such as 18 large eggs for $1.49 that make an impact in circulars, store operators generally display little energy or creativity to drive egg sales—beyond the natural appeals of these ovals. Package cartons are generally bland and boring. Shelf sets lack flair, carrying on the old 'stack 'em high, let 'em fly' philosophy. One would be hard-pressed to find another category in the supermarket—other than milk, its dairy-case neighbor—that suffers from the same merchandising apathy.

Rarely are recipes available near an egg display, although the American Egg Board (AEB) offers hundreds on its website. Cooking demonstrations are rare in-store, even though omelet stations are among the most popular draws at hotel brunches, where people love to customize their orders. Demos would not only romance the egg, but also the cheeses, meats and produce items that form these flavorful combinations.

Retailers that devote more effort to eggs would benefit from greater consumer awareness of improvements within the category—organic, cage-free, antibiotic-free, and Omega-3 varieties, for example. These varieties, by the way, have helped raise the average ticket and gross margin of eggs in recent years. The table is set, believes F3, since the AEB effectively changed the discussion about eggs from 'cholesterol risk' to 'high-quality protein for sustained energy and weight management.'

Now it is up to retailers to leverage their category opportunities by messaging shoppers about eggs' role in balanced diets and balanced budgets. In U.S. food, drug and mass merchandise stores (excluding Walmart) during the 52 weeks ended October 3, 2009, people bought 1.6% more dozens of eggs (the equivalized unit volume gain), yet the 1.79 billion dozens that went into shopping carts were still well below the 1.90 billion dozens that sold four years earlier, reported Nielsen.

At a time when people are trading down to less expensive proteins to save money, and are looking to eat healthier foods, this strikes us as a missed opportunity. This observation seems especially true since egg prices have fallen sharply in the short term, and that alone should have prompted consumption. The effect of the recent price drop was dramatic. Following three straight years of dollar sales gains of 3.8%, 23.7% and 25.2%, fresh eggs (prepackaged, UPC-coded products only) posted a 13.5% dollar sales decline to $3.01 billion in the latest 52 weeks. 

Every segment of eggs by grade (A, AA, B, no grade), by count (12- and 18-packs), and by color (brown and white) shared in the decline.

However, dollar sales gains did emerge in eggs bearing health and wellness claims during the latest 52 weeks. The Omega presence segment nudged up 0.7% to $313.9 million, the Nielsen data showed. Organic eggs rolled up a 2.2% rise $147.5 million. Hormone- and antibiotic-free eggs scored a 15.0% gain to $126.4 million.