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Free-range eggs drive UK industry growth

By Sean Roach , 09-Aug-2006

The British egg market is booming with consumers using more eggs per capita than ever before, according to a Mintel report.

The report indicates that increases in the market are due to a shift in consumer demand, mainly toward free-range and organic egg products. These products now account for nearly 40 per cent of the UK market.

"Value growth has outpaced volume as consumers have traded up to more expensive barn, free range and organic eggs, as well as buying larger sizes," said Mintel analyst Claire Birks. "This trend has been tempered by intense price competition between the leading retailers, in a market dominated by own label brands."

The dominance of label brands in the free-range egg market means there is downward pressure on prices, which could undercut the profit gains of non-battery egg producers.

The overall sales volume for battery eggs slipped 8 per cent over the past three years from 3.19bn to 2.93bn between 2002 and 2005. Battery eggs still account for 59 per cent of the market, but the combined value of free range and organic egg sales exceeded that of cage eggs for the first time, according to the British Free Range Egg Producers Association.

Last year 2.04bn free range, barn and organic eggs were sold to consumers. This is up 24 per cent from 2002. Free range eggs alone rose 31 per cent since 2002, largely due to health and ethical concerns, statedMintel.

"Consumers are increasingly turning their backs on eggs from laying cage hens, which are often housed in poor conditions," said Birks. "In turn they have embraced free-range eggs from hens living in more agreeable surroundings, while organic eggs are seen as healthier, as the hens do not come into contact with chemical fertilizers, pesticides, or hormones… British consumers are clearly looking for choices that are better for their own health, while not compromising that of the chicken."

The rising demand for free range, barn and organic eggs as well as the tendency for consumers to buy larger sizes has spurred the overall egg market to new highs. Last year the entire market hit £514m (€763m) for the first time. A 5 per cent increase in the volume of larger eggs sales since 2003 means that these eggs now account for 43 per cent of the market.

Mintel calculates that sales will continue to rise to £526m (€780m) this year with more than 5bn eggs being sold. This brings the average annual consumption to around 90 eggs per capita across the UK.

If trends continue the UK egg market could grow 17 per cent to £617m (€914m) over the 2006-2011 period.

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