Article
Retailers facing 'egg-ceptional' customer dilemma
Retail foodservice faces a big customer experience hurdle due to the shortage of eggs thanks to an Avian flu outbreak.
June 25, 2015 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com
There are lots of unhappy pie lovers in the Midwest as the egg shortage is already eliminating one of its cherished dessert — French Silk Pie made by Tippin's Pies, which has been making a variety of pies and other baked goods for over three decades.
“We are currently looking into alternative sources of eggs for our French silk pies, but the ingredients in this pie are very special, and not easily replaced,” Tippin’s President Mark Boyer wrote in a blogpost.
An egg shortage, caused by an outbreak of Asian flu in the egg production industry, quietly hit the U.S. in May and is gaining greater attention as the shortage is bound to boost food costs and just as important, alter successful retail foodservice menus and products.
The federal government approved $330 million in emergency funding to help states fight the spread of Avian Influenza, a virus that has already caused more than 47 million bird deaths and led to the national egg shortage. Iowa, Nebraska, Wisconsin and Minnesota have all declared states of emergency due to the virus, two strains of which have been detected since December.
Liquid eggs are now in high demand and short supply, said Wade Winters, VP of Supply Chain for Consolidated Concepts, a purchasing partner for U.S. restaurants. Restaurants, hotels, hospitals, bakeries and packaged food producers using liquid eggs are significantly impacted by higher prices, which can lead to higher pricing on shell eggs as end users look to replace liquid eggs. Distributors are facing product allocations based on prior purchase history from each individual distribution center.
The customer service impact
Food producers, foodservice retailers and food markets across the country are scrambling to figure out how to retain menu items that require eggs and maintain the quality customer experience provided by the original recipe and products. The shortage, by driving menu changes, will obviously impact revenue.
The French Silk pie, for example, is Tippin’s top seller and the pie maker sells about 200,000 every year, according to a KMBCreport, which noted the pie requires a special “egg product," that Boyer said was a secret. The maker of that product is scrambling to come up with an alternative, but Boyer isn’t optimistic about prospects and told KMBChis company isn’t about to play with the French Silk recipe as it’s nearly 40 years old.
“At Tippin’s we believe that if you are going to change anything it has to be as good as or better than current,” Boyer wrote in his blog. “If the alternative options aren’t up to par with Tippin’s quality, then it’s back to the kitchen to keep trying.”
It’s likely a scenario big and small eateries, bakeries and anyone making anything with eggs is facing and will continue to face for at least a year. Industry experts expect the egg shortage won’t right itself back to consistent production numbers for 18 months most likely.
It’s a situation no retailer ever wants to be in as it drives straight to the aspect of customer experience and meeting customer expectations.
Boyer, however, is striving to find the silver lining in the egg shortage dilemma.
As fruit pies, which are also a fan favorite at Tippin’s, is not impacted he’s sees an opportunity to entice French silk pie lovers into trying fruit pies and it’s a sweet marketing idea given summer is a perfect fruit pie time of year.
“This is a great time to try one of Tippin’s other pies and amazing products. If you want something sweet, try our peach pie,” he wrote in his blog.
Pie makers and sellers in Kansas aren’t alone in the egg shortage dilemma. Iowa’s economy could be severely hit given one in five eggs sold in the U.S. originates from Iowa.
"The best-case scenario, we're talking about a year before the availability is more robust," American Egg Board Senior VP John Howeth toldAP.
In Omaha, a breakfast and lunch foodservice operation said the increased cost of the scarce egg is costing him $400 to $500 a week, according to a Fox Business report.
According to the government reports, egg prices increased by 42.9 percent in May.
Some foodservice retailers are adjusting menu availability hours to cope with the egg shortage.
Whataburger customers had fewer hours to order breakfast, over the past month, since the fast casual chain was forced to limit its breakfast hours. In early June, the chain only served breakfast from 5 to 9 a.m. It returned to normal breakfast hours last week after obtaining additional supplies of eggs.
"We know it’s been a tough couple of weeks for our customers, but we’re really grateful for their support while we worked to build up our egg supply,” said Whataburger COO Dino Del Nano. “All of us at Whataburger are so happy to get back to normal and serve our full breakfast menu to customers during our usual breakfast hours from 11 p.m. to 11 a.m.”
Whataburger isn't the only brand adjusting to the egg shortage; it's affecting local restaurants and national chains, including Taco Cabana, causing the eatery to either limit the hours in which they sell eggs, use more egg substitutes or charge more for egg-based products.
As a consequence of the shortage, distributors are instituting measures, such as restricting purchases to dole out what little supply they have.
"Broadline and specialty distributors are taking systematic actions to allocate product based on prior operator level purchase history, including closed coded items within their product catalogs. In many cases, new and existing clients will only be able to purchase liquid egg products they have previously purchased," Winters said.
Winters suggested operators contact distribution partner for specific options, and "prepare to pay much higher prices for liquid eggs for the balance of the year and well into 2016."
Corbion Caravan, a provider of bio-based products made from renewable resources, is providing customers with two egg replacement solutions designed to deliver the flavor and characteristics of eggs, according to a press release.
Corbion's Bro-Eg replaces whole eggs and acts as an extender. It can substitute for up to 50 percent of whole eggs in cakes and batters and 100 percent in yeast products, the company said. It's Cara-Eg can swap 25-to-50 percent of whole eggs in sweet goods and completely substitute yeast products.
"We expect a one-to two-year recovery before pricing and whole egg availability recover," stated Kathy Sargent, manager, sweet goods, for Corbion Caravan said in a statement.
Winters suggested restaurants place fewer eggs on the menu where possible, and adjust menu offerings of eggs to every other day. He also recommended restaurants to consider shell eggs as an alternative to liquid eggs.
"Local produce distributors and dairy distributors frequently stock liquid and shell eggs. This may be a viable option in a market," he said.
Nicole Troxell contributed to this article.
About Judy Mottl
