Are Breakfast Restaurants Contributing to High Egg Prices?
The Chicken-and-Egg Problem
It’s a chicken-and-egg problem: Restaurants are struggling with record-high U.S. egg prices, but their omelets, scrambles, and huevos rancheros may be part of the problem.
Breakfast’s Boom
Breakfast is booming at U.S. eateries. First Watch, a restaurant chain that serves breakfast, brunch, and lunch, nearly quadrupled its locations over the past decade to 570. Eggs Up Grill has 90 restaurants in nine southern states, up from 26 in 2018. Florida-based Another Broken Egg Café celebrated its 100th restaurant last year.
Fast-Food Chains Join the Trend
Fast-food chains are also adding more breakfast items. Starbucks, which launched egg bites in 2017, now has a breakfast menu with 12 separate items containing eggs. Wendy’s reintroduced breakfast in 2020 and offers 10 items with eggs.
More Restaurants Mean More Demand
Reviews website Yelp said 6,421 breakfast and brunch businesses opened in the United States last year, 23% more than in 2019.
The Bird Flu’s Impact
In normal times, producers could meet the demand for all those eggs. But an ongoing bird flu outbreak, which so far has forced farms to slaughter more than 145 million chickens, turkeys, and other birds, is making supplies scarcer and pushing up prices. In January, the average price of eggs in the U.S. hit a record $4.95 per dozen.
Wholesale Costs Soar
The wholesale egg price hit a national average of $7.34 per dozen last week, according to the U.S. Department of Agriculture. That was 51% higher than at the beginning of the year. Wholesale costs may be higher than retail prices since grocers use eggs as a loss leader to get customers in the door.
Restaurants Feel the Pinch
The higher prices are hitting restaurants hard. Some chains, like Waffle House, have added a surcharge to help offset the cost of eggs. Others may turn to egg substitutes like tapioca starch for some recipes or cut egg dishes from the menu, said Phil Kafarakis, the president and CEO of the International Foodservice Manufacturers Association.
First Watch’s Approach
First Watch President and CEO Chris Tomasso said eggs are critical for the chain’s brand and are found in the majority of its offerings, whether at the center of the plate or as an ingredient in batters. So far, he said, the company has been able to obtain the eggs it needs and isn’t charging extra for them.
Eggs Up Grill’s Strategy
Eggs Up Grill CEO Ricky Richardson said he recently met with franchisees to discuss adding a surcharge but they decided against it.
Conclusion
The high demand for eggs, driven by the growth of the breakfast industry, is contributing to the current egg shortage and price increases. While restaurants are feeling the pinch, some are finding ways to adapt, such as adding surcharges or using egg substitutes. As the demand for eggs continues to rise, it will be interesting to see how the industry responds to these challenges.
FAQs
* What is driving the high demand for eggs?
+ The growth of the breakfast industry, with more restaurants and fast-food chains adding breakfast items to their menus.
* How is the bird flu outbreak affecting egg supplies?
+ The bird flu outbreak has forced farms to slaughter more than 145 million chickens, turkeys, and other birds, making egg supplies scarcer and pushing up prices.
* How are restaurants responding to the high egg prices?
+ Some are adding surcharges to help offset the cost of eggs, while others are turning to egg substitutes like tapioca starch for some recipes or cutting egg dishes from the menu.
