The Chicken-and-Egg Problem: How Restaurants are Struggling with Record-High U.S. Egg Prices
A Growing Demand for Eggs
Breakfast is booming at U.S. eateries, with chains like First Watch, Eggs Up Grill, and Another Broken Egg Café expanding rapidly across the country. Fast-food chains like Starbucks and Wendy’s are also adding more breakfast items to their menus. In fact, reviews website Yelp reported that 6,421 breakfast and brunch businesses opened in the United States last year, a 23% increase from 2019.
The Ongoing Bird Flu Outbreak
However, an ongoing bird flu outbreak, which has forced farms to slaughter over 145 million chickens, turkeys, and other birds, is making egg supplies scarcer and pushing up prices. In January, the average price of eggs in the U.S. hit a record $4.95 per dozen.
Supply and Demand
The percentage of eggs that go to U.S. restaurants versus other places, like grocery stores or food manufacturers, is not publicly available. However, demand from restaurants is almost certainly growing, with foot traffic at U.S. restaurants growing the most since 2019 for morning meals, according to market research firm Circana. Breakfast sandwiches are the most popular order during morning visits, and 70% of breakfast sandwiches on U.S. menus include eggs.
Changing Consumer Preferences
Consumers are increasingly looking for protein with few added ingredients, and eggs fit that bill. "Consumers think eggs are really fresh, so if you’re making something with eggs, you know it’s fresh," said Brian Earnest, a lead economist for animal proteins at CoBank.
Addressing Animal Rights Concerns
To address animal rights concerns, some companies have switched to 100% cage-free eggs, which limits the sources they will buy from. Ten states, including California and Colorado, have passed laws restricting egg sales to products from cage-free environments.
Egg Prices and Restaurant Impact
The higher prices are hitting restaurants hard, with wholesale egg prices hitting a national average of $7.34 per dozen last week, a 51% increase from the beginning of the year. Some chains, like Waffle House, have added a surcharge to help offset the cost of eggs. Others may turn to egg substitutes or cut egg dishes from the menu.
Conclusion
The combination of growing demand for eggs and supply chain disruptions due to the bird flu outbreak has created a perfect storm for restaurants. While some chains are finding ways to adapt, such as increasing portion sizes for non-egg items, others may need to consider alternative ingredients or menu changes.
FAQs
Q: Why are egg prices so high?
A: The ongoing bird flu outbreak has forced farms to slaughter over 145 million chickens, turkeys, and other birds, making egg supplies scarcer and pushing up prices.
Q: Why are restaurants struggling with egg prices?
A: Growing demand for eggs, combined with supply chain disruptions, is making it difficult for restaurants to obtain the eggs they need at affordable prices.
Q: Will restaurants be able to adapt to the high egg prices?
A: Some chains are finding ways to adapt, such as increasing portion sizes for non-egg items or turning to egg substitutes. Others may need to consider menu changes or surcharges to offset the cost of eggs.
