Egg producers gain insight at International Egg Commission Conference

Delegates at the most recent International Egg Commission Production and Marketing Conference were treated to a packed agenda, ranging from an examination of how an also-ran business is now the third-largest retailer in the world, through to the impact that avian influenza has had on one country’s major egg-producing states.

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Sir Terry Leahy told delegates that internal values must be aligned with external values and that all members of staff must be fully engaged for a business to succeed.
Sir Terry Leahy told delegates that internal values must be aligned with external values and that all members of staff must be fully engaged for a business to succeed.

Delegates at the most recent International Egg Commission Production and Marketing Conference were treated to a packed agenda, ranging from an examination of how an also-ran business is now the third-largest retailer in the world, through to the impact that avian influenza has had on one country’s major egg-producing states. 

Opening proceedings for the day was Sir Terry Leahy, former chief executive of UK-based supermarket chain Tesco. The group was seen as an also-ran business but, under the direction of Leahy, has grown to be the third largest retailer in the world.

Leahy emphasized the importance of the soft side of business -- offering good service and manners, inspiring and building trust. But he also emphasized the need to build change and growth around systems, so every person knows what needs to be done and when, along with the value of identifying and incorporating the strengths of competitors. 

He emphasized that people, pricing, systems, and timing and implementation of decisions are crucial, saying that to achieve change each individual in an organization must work to bring it about and that there must be a clear path for all to follow. Employees must feel that what they do is relevant to the organization and its goals, and they must be shown the measures that matter. 

He asked: “Who is the best producer is the world? What can you learn from them? You probably aren’t competing against them today, but you might be in the future.”

Leahy was followed by Dr. Chris Brown of supermarket chain ASDA, who commented that green is the new norm. He continued that consumers feel that they have responsibility for it and that they expect the green agenda to grow. Given this, green products need to be easier to find in stores, and they should not cost more. 

Health and nutrition  

Dr. Mitch Kantor of the U.S. Egg Nutrition Center noted that health and nutrition are key in the promotion of eggs and that these two aspects are still underutilized in egg marketing. He added that reaching health experts requires a multipronged approach. The Egg Nutrition Center has research completing all the time so that there is always a news story to tell.

Looking to the future, he suggested that the audience consider the establishment of an international nutritional forum to share ideas, resources and educational programs. 

Education and transparency  

Among issues currently the facing the industry is a lack of consumer of understanding of how eggs are actually produced. On the whole, the industry has been reacting to this, rather than taking the lead.

Various initiatives are underway around the world in an attempt to remedy this. Dr. Aline Veauthier of the University of Vechta explained that in Germany, 65 farms in Lower Saxony are currently involved in a project to open to the public and the media. The response to visits has been primarily positive, and while there has been some criticism, the dialogue has been welcomed. Regular open house days have been planned from September onward this year. 

James Kellaway, managing director of the Australian Egg Corporation Ltd., noted the increasing disconnect between rural and city communities in his home country, but added that if the urban population is given good information, they do understand the needs of production. 

Mexico  

Sergio Chavez, executive president of Mexican association UNA, and Cesar de Anda, International Egg Commission vice chairman, gave delegates an overview of the current situation regarding the avian influenza outbreak in the Mexican state of Jalisco. Prior to the outbreak, the state accounted for 55 percent of egg production in the country and was home to 80 million birds.

As of September 10, official figures stated that 22 million layers had been lost as a result of the outbreak and subsequent control measures; however, industry estimates put the figure higher at 25 million. 

One of the measures taken to help protect the industry was the hiring of a damage control consultant. This resulted in messaging to the national and local media and resulted in objective reporting on the situation. The initial public response to the outbreak was a collapse in consumption and a consequent collapse in prices. However, this was followed by a recovery and now prices have rocketed in response to an upswing in demand and egg shortages.

Mexican egg consumption is the highest in the world, and the country is now having to deal with insufficient supplies of a staple food. However, some good has come from the outbreak. The importance of the industry has been brought to the attention of the public. In fact, the outbreak led to the country’s president making a special address to the nation and declaring a national emergency. In addition, the outbreak has forced the industry to look at itself and to consider what sort of industry it wants to be. 

The shortage of eggs in Mexico is expected to last until at least the end of 2012. Repopulation is on the agenda, and by April-May 2013, the laying flock in Jalisco is expected to be back to pre-outbreak levels. 

Development   

Delegates were also given a presentation by Andrew Cunningham of New Horizons Mozambique. His poultry business works with subsistence farmers. He looked at how business relates to development and how business can link with small local farmers. 

Development must be market driven to maintain momentum and be sustainable, he argued. Most development agencies want to turn every small farmer into an entrepreneur, but most people are not suited to this. If most people in Europe or the Americas are not suited to being entrepreneurs, why should things be different in Africa, he asked. 

He continued that there are some activities that are better carried by commercial organizations than by individuals, and that the reverse is also true, so the synergies between the two must be found.

“We want to look at the interface between the large- and small-scale,” he said. 

Around the world  

Delegates were also given a number of international market reviews. 

In the UK, current challenges include feed prices, welfare and the review of beak trimming. While the Canadian atherosclerosis research that was reported worldwide initially generated negative headlines, reports quickly turned positive, with a number of independent health professionals in the UK coming out in favor of eating eggs. 

The UK is experiencing a slowdown in alternative housing and free-range egg production has experienced a contraction. The country may be in recession, but the economy is not thought to have bottomed out. 

For the Netherlands, it was reported that egg production is largely in barn systems, while there are some enriched cages. Sales of free range eggs are growing in the country, and no eggs from enriched cages are sold by the country’s retailers. The Netherlands became compliant with EU hen welfare legislation in July this year. 

The same month a generic egg promotion campaign was launched in the country – “Ei love you”. 

In Spain, more than 90 percent of egg production is in enriched cages. Production has decreased because of the costs associated with the move away from conventional cages. It was also highlighted that the Spanish industry is viewing the future with uncertainty, wondering what will be the next piece of legislation that must be complied with. 

Among the current needs for Spain’s egg producers is the necessity to improve branding, to differentiate, and to develop more marketing and branding. More emotional links between consumers and eggs need to be established to differentiate eggs produced in the EU from others. 

In South Africa, egg consumption is on the rise. While the country did not experience the financial meltdown witnessed in many other countries, egg producers have been affected by an economy that is broadly flat, rising feed prices, low retail prices, negative media coverage, and the intrusion of “evangelical” competition authorities. 

The country has a generic marketing campaign “Eggs are magic,” and the industry has been communicating with consumers through health clinics, where there tend to be young mothers, children and older people. Some health bodies have reached out to work with the industry. Other activities have included the production of brochures, school and savings club initiatives.

In Australia, the current threats to the industry are animal welfare and a lack of harmonization across the country. Food safety rules are also under review. The industry’s approach to training is starting to gain accreditation and a video campaign for World Egg Day, “The people behind your eggs,” is proving successful.

Looking to China and Japan, it was noted that 93 percent of birds in the latter country are kept in cages with only 1 percent being free range. Japan in 95 percent self-sufficient in eggs, however the sector was hit by the 2011 earthquake and nuclear disaster. 

In China, it was reported that, while egg prices have fluctuated over the last decade, overall the trend in prices has been upwards. However, price increases are also occurring on the supply side, and between 2006 and 2011, the price of day-old chicks rose by an average of 8 percent per annum. On top of this, the industry is having to deal with rising feed and labor costs, and staff are becoming more difficult to retain. 

There is a remarkably large variation in per capita consumption rates for eggs in China. Highest consumption can be found in the northeast of the country at 11.66 kg per person. Northern China has traditionally been where the egg industry is concentrated; however, production is moving toward the large centers of population. 

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