Cracking the Code: How Retailers Can Adapt to Plummeting Egg Prices in 2024

Virtually every cuisine in the world uses eggs. They’re in your breakfast, lunch, dinner, and dessert — which is perhaps why the global egg market is expected to generate $130.70 billion in revenue in 2024 and is projected to grow to approximately $193.56 billion by 2029.

More specifically, the United States is the fourth-largest egg producer worldwide. The country’s egg market is projected to generate $15.75 billion in 2024 and increase to $22.51 billion by 2029.

This growth is driven by several factors, most notably:

• Health-consciousness among consumers: Consumers value eggs for their essential nutrients and rich protein content.
• Demand for convenience foods: Consumers’ preferences are shifting toward quick and easy foods, which drives demand for shell eggs and pre-packaged boiled or scrambled eggs.
• Population Growth: A growing worldwide population increases the demand for eggs.
• Affordability and accessibility: Eggs are an affordable and accessible nutrient-dense food source for many.

Despite these factors contributing to the U.S. egg market’s growth, recent times have seen egg prices fall dramatically.

Based on a sample of 450 SKUs, DataWeave discovered that egg prices in the U.S. fell by 6.7% between April 2023 and April 2024, dipping to its lowest (-12.6%) in December 2023.

So, what’s causing the decrease in egg prices?

The Rise and Fall of Egg Prices: A Recent History

In 2022, avian influenza severely impacted the United States. The disease affected wild birds in nearly every state and devastated commercial flocks in approximately half of the country.

The 2022 incident was the first major outbreak since 2015 and led to the culling of more than 52.6 million birds, mainly poultry, to prevent the disease from spreading uncontrollably.

With almost 12 million fewer egg-laying hens, the United States produced around 109.5 billion eggs in 2022 — a drop of nearly two billion from the previous year.

Consequently, the cost of eggs soared, peaking at $4.82 a dozen — more than double the price of eggs in the previous year.

The avian flu continues to affect egg-laying hens and other poultry birds across the United States. As of April 2024, farms have killed a total of 85 million poultry birds in an attempt to contain the disease.

Despite the disease’s effects, production facilities have made significant efforts to repopulate flocks, leading to a steady increase in supply – and a much anticipated decrease in egg prices.

According to the U.S. Bureau of Labor Statistics, there was an increase in producer egg prices in 2022, reaching a peak in November 2022, at which point they began to fall.

Retailer’s egg prices followed suit. The egg price chart below depicts retailers’ declining egg prices over one year, from April 2023 to April 2024, with Giant Eagle showing the most significant price reductions and Walmart the least.

What Does the Future Hold for Egg Prices?

The USDA reported recent severe avian flu outbreaks in June 2024. These outbreaks are estimated to have affected 6.23 million birds.

With a reduction in egg-laying hens, egg prices are likely to increase — time will tell.

Nonetheless, the annual per capita consumption of eggs in the U.S. is projected to reach 284.4 per person in 2024 from 281.3 per person in 2023. So for now, producers and retailers can rest assured of the growing demand for eggs.

How Can Retailers Adapt to the Unpredictability of Egg Prices?

Egg prices were down to $2.69 for a dozen in May 2024. However, they are still significantly higher than consumers were used to just a few years ago—eggs were, on average, $1.46 a dozen in early 2020.

Additionally, while the avian flu puts pressure on producers, inflation and supply chain disruptions exert pressure on retailers.

With such challenging egg market conditions, what can retailers do to maintain customer loyalty amid reduced consumer spending while maintaining profitability?

1. Give the Customer What They Want: Increase Offerings of Organic, Cage-Free, and Free-Range Eggs

As mentioned, Data Bridge Market Research’s trends and forecast report highlighted a significant increase in consumer health consciousness. Additionally, animal welfare increasingly influences consumers’ purchasing decisions when buying meat and dairy products.

DataWeave data shows that the prices of organic, cage-free, and free-range eggs—such as those by brands like Happy Eggs and Marketside—have fallen less than those of non-organic, caged egg brands.

2. Increase Private-Label Offerings

Private labels typically offer retailers higher margins than national brands. These margins can shield consumers from sudden wholesale egg price swings, helping to preserve brand trust and consumer loyalty without sacrificing profitability.

Moreover, eggs are particularly suited to private labeling, given their uniform appearance and taste and the lack of product innovation opportunities.

Undoubtedly, this is why sales of private-label eggs dwarf sales of national egg brands in the United States. Statista reports that across three months in 2024, private label egg sales amounted to $1.55 billion U.S. dollars, while the combined sales of the top nine national egg brands totaled just $617.88 million U.S. dollars.

3. Price Intelligently

With the current and predicted fluctuations in egg prices over the foreseeable future, price competitiveness is paramount to margin management and customer loyalty.

This is especially true when lower prices are the primary factor influencing the average consumer’s choice of supermarket for daily essentials purchases.

AI-driven pricing intelligence tools like DataWeave give retailers valuable highly granular and reliable insights on competitor pricing and market dynamics. In today’s data-motivated environment, these insights are necessary for competitiveness and profitability.

Final Thoughts

Egg prices have fluctuated significantly due to the impact of avian flu. Despite recent price drops, future egg price increases are possible due to ongoing outbreaks. Retailers should adapt to unstable egg prices by increasing organic, free-range, cage-free, and private-label egg offerings while leveraging AI-driven pricing tools to maintain margins and customer loyalty.

Speak to us today to learn more!

- Jeevanantham Kailasam
Jeeva is Manager - Business Analytics at Dataweave working with Brands to help them improve their discoverability and inturn revenue across eCommerce Platforms. He can be reached at jeeva.kailasam@dataweave.com, 18th Jul, 2024

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