The surge in breakfast popularity at U.S. eateries has sparked a complex issue: rapidly increasing egg prices. Many establishments, from restaurant chains to fast-food outlets, have diversified their breakfast menus to entice morning diners. This shift has inadvertently influenced the soaring price of eggs.
Breakfast-focused chains like First Watch and Eggs Up Grill exemplify this trend, with First Watch expanding its presence substantially over the past decade. As more Americans choose to dine out for their morning meals, the demand for eggs, a staple breakfast item, increases.
Concurrent with this rising demand, the supply side faces significant challenges. An ongoing bird flu epidemic has necessitated the culling of over 145 million poultry, leading to a constrained egg supply. The resultant scarcity has caused egg prices to skyrocket, reaching a record high average of $4.95 per dozen in January.
A shift in consumer preference has seen a growing inclination toward protein-rich and straightforward foods—a category into which eggs fit seamlessly. Eggs not only fulfill these nutritional criteria but are also perceived by consumers as a fresher option. This perception has led to a steady rise in breakfast sales, a sentiment echoed by Circana's market research stating that the morning meal time now accounts for 21% of restaurant visits.
Egg demand isn't solely restaurant-bound; changing retail landscapes reflect these shifts too. As Phil Kafarakis of the International Foodservice Manufacturers Association notes, some restaurant chains have had to adjust their menus or consider egg substitutes due to soaring costs. However, for brands like First Watch, eggs remain central to their identity, underscoring the staple's importance.
Compounding the issue are stricter animal welfare laws in some states, requiring egg producers to switch to cage-free practices. This regulation narrows the pool of available suppliers, thereby complicating market dynamics further. As a response, some states like California and Colorado have laws ensuring the sale of only cage-free eggs, contributing to basket complexity.
The rising price trend has impacted some restaurant operations. Waffle House, for example, has introduced a surcharge to offset egg costs, while others have opted to expand portion sizes for non-egg items or explore alternative ingredients. Despite these challenges, the overall narrative suggests that eggs will remain indispensable in American diets.
The egg market illustrates the delicate balance between consumer demand, supply chain interruptions, and regulatory changes. While navigating these waters proves difficult, the overall resilience of the breakfast segment indicates a strong future in dining out.
