The breakfast industry in the United States is booming, with more and more restaurants and fast-food chains adding egg-based dishes to their menus. However, this increase in demand for eggs has led to record-high prices, creating a chicken-and-egg problem for the restaurant industry.
In recent years, breakfast has become a popular meal choice for Americans, with chains like First Watch, Eggs Up Grill, and Another Broken Egg Café experiencing significant growth. Even fast-food giants like Starbucks and Wendy’s have jumped on the breakfast bandwagon, offering a variety of egg-based items on their menus.
However, this surge in demand for eggs has coincided with an ongoing bird flu outbreak, resulting in a decrease in egg supplies and a sharp increase in prices. In January, the average price of eggs in the U.S. hit a record high of $4.95 per dozen. This has put a strain on restaurants, who rely heavily on eggs for their breakfast dishes.
While the exact percentage of eggs that go to restaurants versus other places is not publicly available, it is safe to assume that the demand from restaurants is growing. According to market research firm Circana, morning meals accounted for 21% of total restaurant visits in 2020, with breakfast sandwiches being the most popular order. In fact, 70% of breakfast sandwiches on U.S. menus include eggs.
The CEO of Eggs Up Grill, Ricky Richardson, believes that the rise in breakfast restaurants is due to people seeking comfort and connection during the COVID-19 pandemic. As food prices continue to rise, breakfast and lunch options are seen as more affordable choices for eating out.
This increase in demand for eggs from restaurants is a reversal of the trend seen during the pandemic, where consumers stocked up on eggs for home use while restaurants were forced to close. Brian Earnest, a lead economist for animal proteins at CoBank, explains that this shift in demand has impacted the economics of eggs.
For over five decades, egg consumption in the U.S. had been declining. However, with the rise of nutritional research and marketing promoting eggs as an inexpensive protein source, consumption has been on the rise. In 2019, per capita consumption of egg products reached the equivalent of 292 fresh eggs, according to data from the U.S. Department of Agriculture.
Earnest also notes that consumers perceive eggs as a fresh and healthy option, making them a popular choice for breakfast dishes. However, other factors such as animal rights concerns and state laws mandating cage-free egg production have made the market more complicated.
The increase in egg prices is hitting restaurants hard, with wholesale prices reaching an average of $7.34 per dozen last week. This is a 51% increase from the beginning of the year. Some restaurants, like Waffle House, have added a surcharge to offset the cost of eggs, while others may turn to egg substitutes or cut egg dishes from their menus.
Phil Kafarakis, the president and CEO of the International Foodservice Manufacturers Association, suggests that restaurants may also increase portion sizes for non-egg items to balance out the cost. However, for chains like First Watch, eggs are a critical component of their brand and are found in the majority of their offerings. So far, they have been able to obtain the eggs they need without charging extra.
Despite the challenges posed by record-high egg prices, the restaurant industry remains optimistic. Chris Tomasso, President and CEO of First Watch, believes that eggs will continue to be an important part of American diets. Richardson, of Eggs Up Grill, also remains positive, stating that eggs have always been and will continue to be a staple in the American breakfast.
In conclusion, the chicken-and-egg problem facing the restaurant industry is a complex issue, with various factors contributing to the record-high prices. However, with the resilience and creativity of the industry, it is likely that restaurants will find ways to adapt and continue serving delicious egg-based dishes to their customers. After all, breakfast is the most important meal of the day, and eggs are an essential part of it.
