‘A Core Tenet of the Hospitality Space Is that You Focus on People Over Profits’

We can expect to see a prolonged period of higher egg prices through the Easter and well into 2025, according to a report from CoBank. While this can be largely attributed to supply challenges associated with bird flu which has affected nearly 100 million egg-laying hens since 2022,  it's not the only factor. The report found demand for eggs has skyrocketed , with per capita consumption growing 20 percent from 2016-2019. Additionally, demand has shifted to cage-free and other specialty eggs with nine states enacting laws that require eggs sold in their states to be from cage-free hens.

“Egg demand was relatively stable in the early 2000s and seasonality played a much bigger role in peak demand periods than it does today,” said Brian Earnest, lead animal protein economist with CoBank. “While seasonality remains an influencing factor, egg use has grown dramatically over the last 20 years. Eggs have become a staple item for innovation in quick-service restaurant entrees, and marketing trends like the emergence of all-day breakfast have significantly boosted egg demand.”  

Total egg laying hen inventories, including conventionally raised hens, have not been substantially depleted from where they were at the beginning of the HPAI outbreak, according to the CoBank report. Commercial operators who have been impacted have moved swiftly to repopulate hens. Through January 2025, the U.S. egg industry has eight percent fewer egg-laying hens than it did two years ago. But HPAI has evolved to become a persistent, year-round threat to production. 

“The last widespread outbreak of HPAI in 2015 was largely seasonal with most cases occurring during the winter and spring migration periods for wild birds,” said Earnest. “That seasonality appears to be gone. During the current outbreak, HPAI has been detected in birds or other species nearly every month since the outbreak began in February 2022.”

Guests are not really avoiding eggs due to bird flu concerns, Ed Powers, Director of Operations at Broken Yolk Cafe, told Modern Restaurant Management (MRM) magazine. Approximately 70 percent of the menu items at the breakfast and brunch brand with 40 locations features eggs as an ingredient. 

To deal with fluctuating egg prices, Powers has a nmber of suggestions including taking advantage of commodity price drops to lock into systemwide supply contracts.

"An egg contract, in this case – is a time-tested safeguard when dealing with fluctuating food costs. Not only does that better ensure brand uniformity in what's coming out of the kitchen, but it can protect franchisees from soaring food costs when the market starts to rise."

He also recommends working with vendors to come up with alternative options to offset cost or to help shift product mix away from eggs and working with the marketing team to promote specific menu options that steer guests away from impacted food items. 

Other things to do: manage food waste and examine your P&L.

"It's always worth revisiting the topic of food waste with your Heart of House team, working with them to make sure food specs and portion sizes are being properly adhered to across the board," Powers said. "Take these opportunities to evaluate other P&L lines to see where you can capture some savings that can offset the cost of eggs. We worked with one of our restaurant supply vendors to cut our supply cost by 40 percent, recently."

Powers is not a fan of surchages, opting instead for finding ways to cut costs.

"Brands that have gone that route tend to see negative reactions from their guests, which in turn impacts foot traffic. A core tenet of the hospitality space is that you focus on people over profits. Towards that end, I think it's in a brands best interest to weather the storm and eat the costs on behalf of consumers, while exploring other worthwhile areas to help offset costs."