Last month, Nestle, the world’s largest food company, announced it would source all of its eggs used in its U.S. products from cage-free hens by 2020. The company joins numerous food companies and fast food chains that are pledging to use cage-free eggs in their products.
The move to source cage-free eggs represents an overhaul of supply chain networks for these major food companies, though it's not going to be a simple industry change despite growing prominence.
General Mills announced last summer it would source cage-free eggs for its U.S. products, and in November, as part of its updated animal welfare policy, announced a goal of 2025. Also last year, Kellogg announced it would source only cage-free eggs by the end of 2025, part of its expanded plans for animal welfare.
What does this mean for the supply chain?
In Nestle's case, a spokesperson says the company is prepared to overcome any bumps in the supply chain as it begins to source cage-free eggs. This is a large commitment from a company that uses an estimated 20 million pounds of eggs annually, and which currently does not source cage-free eggs.
"We have discussed this with our suppliers and they are fully supportive of our move to cage-free eggs," Edie Burge, a spokesperson for Nestle, wrote in an email. "One supplier in particular, Ballas, is very much a part of our journey to cage free. Given our phased in approach and the expansion of cage-free offerings within the industry, we do not expect any negative impacts to our U.S. supply chain.”
"It won’t be without its challenges," Andy Seger, CFO, Ballas Egg Products Corp., told Food Dive. "They have made a commitment to transition to cage free over a period of time and we intend to support them and evolve our supply chain in a way that works for them."
Ballas Egg Products supplies dried, frozen and liquid eggs to long-term customer Nestle, among others. Seger encourages customers to work with their supply partners closely to put in place reasonable commitments within a reasonable time frame to ensure success.
Nestle's initial supply chain strategies will include directing more volume to suppliers that adopt cage free more quickly, noted Burge. The company sources from multiple suppliers located throughout North America. In regard to whether the company will source cage-free eggs from free-range farms, Burge wrote, "Nestle is committed to sourcing materials where cages have been eliminated from the farms and processing environments."
Why cage-free eggs?
From his perspective as a supplier, Seger believes customers are responding to consumer demands, whether talking about specialty products or moving toward sourcing cage-free eggs.
Animal welfare also figures into the scenario. Nestle has partnered with World Animal Protection (WAP) to provide insights on animal protection as part of the company’s Responsible Sourcing Strategy. "The move to using exclusively cage-free eggs is one more way that we’re responding to consumers and establishing a precedent for farm animal welfare," said Paul Bakus, president, Nestlé Corporate Affairs, in a news release.
"Major food companies like Nestle have the influence to bring about positive change at every level of the supply chain," said Martin Cooke, WAP’s international head of corporate engagement, in a news release.