Rising egg costs are causing strain on U.S. bakeries
"Our suppliers are scratching their heads, wondering when egg prices are going to dip — or if they ever will," Auslander claimed. "Eggs are costing a pretty penny."
Bread Furst churns out around 150 eggs a day and that cost has skyrocketed, with Auslander mentioning a doubling of prices compared to last year. Recently, the bakery bumped up the prices for their egg-laden pastries and dishes, accounting for about a third of their menu. That includes their beloved "messy egg sandwich," now pricier by a buck.
Egg prices are experiencing a spike nationwide as a result of the ongoing bird flu outbreak triggering the slaughter of millions of hens last year. This staggering number of culled chickens is causing the egg shortage and the resulting surge in prices.
"We've never had to take egg prices into account before," Auslander admitted.
Warning shots fired
The highly pathogenic H5N1 virus, also known as bird flu, got the better of flocks nationwide, with the US Department of Agriculture reporting the deaths of more than 40 million egg-laying birds last year. This unsettling trend is contributing to today's egg scarcity and spiraling prices.
Wholesale egg prices hit 186% higher in January compared to the same month the year before, according to government data. This marked the fourth-largest annual increase on records that stretch back to 1992.
The impact on consumer goods hasn't been noticed nearly as much, as per the Consumer Price Index. However, that could possibly change if egg prices don't drift downward soon.
Bakeries are being forced to consider hiking their prices, if they haven't already, as they navigate the nationwide egg crisis.
"Our plan is to bump up prices in the coming weeks, but we're also looking into using egg alternatives," Simon, the owner of Manhattan Sweets Boutique Bakery, shared. He emphasized his concern about sticking too closely to these substitutes, to preserve the bakery's culinary integrity.
Demand for plant-based egg substitutes like those offered by Eat Just Inc., has shot up significantly. Sales to major retailers such as Walmart, Whole Foods, Kroger, and Publix were a staggering five times higher over the past month compared to the same period last year, according to company data.
Tetrick, Eat Just's CEO, admits that while the unexpected surge in demand is challenging their profit margins, they haven't feels the need to increase their prices, preferring to invest in absorbing costs temporarily in hopes of winning permanent customers even after the bird flu disaster subsides.
It’s not just about the eggs
Bakers are also grappling with sky-high cocoa prices, alongside soaring egg costs. Simon made a point to express that this is a challenging situation with no easy answers.
Auslander recognized the situation, admitting that his team is being extra cautious while baking or cooking with eggs, ensuring they utilize every bit to avoid waste.
Raising prices is always a tough sell for businesses due to the fear of losing customers, said Lindsey, a marketing professor at the University at Buffalo School of Management. However, in rare cases like this, it can be a necessary evil. By communicating clearly and transparently, a business can limit its customer losses.
Bradley, co-owner of D Light Cafe & Bakery in Washington D.C., lamented about absorbing the rapid rise in egg prices, with a box of eggs now costing more than twice what it did before the crisis. She cautioned that any future price increases would need to be communicated effectively to maintain support from customers.
These challenges demand creative solutions from the baking industry, such as recipe reformulation, exploring egg substitutes, and managing supply chain issues. By employing various strategies and communicating effectively, bakeries can maintain their businesses and continue to serve their communities.
The increase in egg prices has forced Bread Furst to raise the prices of their egg-laden pastries and dishes, accounting for about a third of their menu. The bushfire outbreak and subsequent culling of millions of hens have contributed to the egg shortage and the resulting surge in prices, impacting businesses like bakeries nationwide. Auslander's bakery is considering bumping up prices in the coming weeks, but they're also exploring egg alternatives to preserve their culinary integrity.
