Egg prices surge amid an ongoing egg shortage driven by the spread of bird flu. Prices are expected to stay high due to the supply shortage.
Pete & Gerry’s CEO Tom Flocco joins Catalysts with Seana Smith and Madison Mills to discuss egg pricing dynamics and how the premium egg provider has avoided raising its prices to retailers amid the shortage. Flocco also comments on the $40,000 of eggs recently stolen from a company truck in Pennsylvania.
"This is an unprecedented time in the space," Flocco says as egg prices rise. He notes that most other egg companies raise prices amid supply constraints. Pete & Gerry’s premium egg prices to retailers have not gone up in the last 18 months.
"What’s really making the news is the price of commodity eggs [or conventional eggs] … Their price is driven much more by supply and demand. Our price is driven more by just an agreed price to the retailer," he says, explaining, "Those are the birds that have really been unfortunately affected by avian influenza. So as over 10% of their supply chain has been taken out from avian influenza, that’s just reduced the supply of eggs, which in turn drives up the price to the retailer and then ultimately to the end consumer."
Flocco says that while the company has "had a couple of barns that have been hit" by the bird flu outbreak, Pete & Gerry’s network of nearly 6.5 million birds is across 250 farms in 15 states, limiting the impact of the outbreak. "We don’t have the same concentration in our supply chain that a traditional, conventional caged or cage-free player has in theirs, where there are several hundred thousand or millions of birds on one campus."
More so than the bird flu, the egg shortage and the price surge in conventional eggs have impacted Pete & Gerry’s. "What has affected it is the fact that now a lot of those conventional cage and cage-free eggs that are typically much lower priced, $2 to $3 more a dozen [for] ours, they’re actually at parity or in some cases higher priced than ours. So it makes it easier for the consumer to grab our eggs."
The CEO says that the incident of $40,000 of eggs being stolen, which translates to 8,000 dozen or 100,000 individual eggs, is "unfortunate," but isn’t "a meaningful hit to our supply and to our retail partners."
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