Is McDonald’s cage-free eggs strategy a turning point?

Cage-free eggs photo by Brent Hofacker via Shutterstock

This story was updated Tuesday, Dec. 22, to add more specifics about Nestle's commitment to cage-free eggs.

Over the past three months, there have been several notable corporate commitments to better animal welfare practices. One of the boldest came in early September from McDonald’s, with its 10-year transition pledge to buy only cage-free eggs for its nearly 16,000 restaurants in the United States and Canada.  

What’s more, it’s not alone in making this a priority. Another restaurant chain, Panera Bread, is pushing a similar goal, on an earlier timeline. Plus, three huge food companies — Nestle, General Mills and Kellogg’s — have also put egg producers on notice in recent weeks.

What makes the McDonald’s proclamation even more notable is the timing, just one month before the company began offering an all-day breakfast menu that is bound to increase the number of eggs it needs to buy. Right now, McDonald’s U.S. and Canadian operations use more than 2.1 billion eggs annually. Approximately 13 million of them currently come from cage-free hens. That’s a lot of ground to make up before 2025, when its pledge comes due.

Generally speaking, the term “cage free” refers to environments in which hens have the freedom to roam so that they can scratch and peck for food, use nest boxes, or roost on perches. The chickens may or may not have access to pastures or outdoor areas.

“Our customers are increasingly interested in knowing more about their food and where it comes from,” said Mike Andres, president of McDonald’s USA. “Our decision to source only cage-free eggs reinforces the focus we place on food quality and our menu to meet and exceed our customers’ expectations.”

Animal welfare expert Leah Garces, the U.S. director for Compassion in World Farming (CIWF), noted that McDonald’s buys approximately 4 percent of all the eggs produced in the United States. Its strategy will have a domino effect across the industry. “In many ways, I think this is the year of the cage-free egg,” she said.

Collective will suggests turning point

Garces compared recent market developments to a turning point several years ago in the fight to eliminate gestation crates, which have traditionally been used by pig farmers to confine pregnant sows. “Cages, and crates and confinement are totally unacceptable to American consumers,” she said. “What human being wouldn’t want an animal to be healthy and happy.”

McDonald’s certainly isn’t the first big company to take a stand on eggs. Companies like Aramark, Burger King, Nestle and Starbuck’s declared their intentions months if not years ago. Burger King’s goal is to do this by 2017.

Nestle's plan is to transition completely to cage-free eggs in the United States by 2020. The world's largest food company uses more than 20 million pounds of eggs annually for products such as Haagen Dazs, Dreyer's and Edy's ice creams, Nestle Toll House cookie dough, and many Lean Cousine prepared food items. Nestle will work with non-profit organization World Animal Protection to develop a roadmap for its European phaseout.

The heightened focus of the past several months was triggered in part by a study comparing various “hen housing systems” released by the Coalition for a Sustainable Egg Supply earlier this year. The research underscores one big reason that McDonald’s — and the other companies making broader cage-free commitments — need so much time to pull off their transitions. Right now, the costs associated with raising cage-free hens are much higher than conventional methods.

As mentioned before, McDonald’s is planning its transition over the next decade. Panera hopes to make its transition by 2020 for the eggs used in its U.S. Panera Bread and St. Louis Bread Co. operations. That includes hard-boiled eggs served in the cafes along with eggs used for baking, dressings, and soufflés. Its commitment covers approximately 120 million eggs annually.

“We do pay a premium for these products,” said Sara Burnett, director of wellness and food policy for Panera, when I spoke with her broadly about the company’s animal welfare policy in early November. “We also know that over time, that cost comes back down for both sides.”

Cage-free declarations by cereal and food company Kellogg’s, which has been phasing out purchases of eggs laid by caged hens since 2007, and General Mills, which aims to be 100 percent cage-free by 2025, have only served to heighten interest among American consumers.

Large egg producers—representing a $9 billion industry—are scrambling to accommodate this transition. In mid-October, the third-largest U.S. operation Rembrandt Foods said it would continue investing in cage-free facilities for its hens. It began this transition five years ago. “With a reasonable timeline, we can meet any demand, and we’re eager to move our clients into the cage-free future,” said Jonathan Spurway, the Iowa company’s vice president of marketing.

Michael Foods, an egg producer in Missouri owned by consumer goods giant Post Holdings, is also working actively with its customers. “Cage-free is emerging as the likely future of the egg industry,” said Michael Foods president and CEO Jim Dwyer. “Our customers are increasingly requesting cage-free eggs and products made from cage-free eggs.”

Federal estimates suggest there were about 4.5 million cage-free hens in the United States as of September, which represents about 4.5 percent of the entire flock.