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EU egg shortage: An alternate view on how long it will last

By Oliver Nieburg , 11-Apr-2012

The bakery and confectionery industry claims it has been hit with a “dire and unprecedented” EU-wide egg shortage as suppliers of egg replacers look to profit and offer up their opinions on how long the situation will last.

Last month, The Association of Chocolate, Biscuit and Confectionery Industries (CAOBISCO) said a ban on battery cages introduced this year had led to egg shortages and price increases of around 75% over the last six months.

BakeryAndSnacks.com asked egg replacer producers Arla Food Ingredients and Kerry Ingredients how long the shortage would continue and what it meant for their businesses.

How long will it last?

“I expect it to go on for a while,” said Soren Norgaard, senior manager BA Bakery at Arla.

He said it was well-known that some manufacturers were still sourcing eggs from battery caged hens and the shortage could depend upon how the EU responded.

Tom Schmedes, confectionery end use market director at Kerry Ingredients & Flavours said: “We think it will be some months before supply once again matches demand.”

“Some producers are adapting their methods to meet the new regulations and will return to full production, whereas some are said to be leaving the market completely.”

Roger Waite, European Commission spokesperson for Agriculture and Rural Development previously told this site that the situation was being viewed as “temporary” based on past experience.

In 2010, egg shortages were reported after a battery cage ban in Germany, but the market picked up soon after.

Demand for egg replacers

Arla recently forecast that sales of its Nutrilac egg replacer would double this year due to the egg shortage, helping its bakery division double its turnover to €26.9m.

Norgaard said that the increased demand, which has risen 20% each year since 2000, could be produced on existing production lines.

He refuted suggestions that replacers were only alternatives in the face of crises, but added: “It’s obviously a temporary boom considering we’ve been on the market 12 years.”

According to Norgaard egg replacers will always bring a 20% cost saving, but the price would move in-line with the market price for eggs.

Kerry refused to give specific sales forecasts, but Schmedes said: “Because of the situation we do expect demand to increase for our Hyfoama hydrolysed protein solutions in the coming months, and are gearing up production in anticipation.”

Part replacement

Arla’s Norgaard conceded that most manufacturers and consumers wanted to see eggs on the label even though an egg replacer could produce similar results.

He therefore expected that bakers would opt for part replacement.

“What you will in the future is some level of egg replacement in the formula,” he said.

Where is there demand?

Norgaard said that Arla’s egg replacer sales were booming in the UK, Germany and Spain.

This could in part be attributed to the egg shortage. However, Arla also has a strong sales presence in these markets.

Norgaard said that some demand had come from bakery companies within the top 10 and added that the shortage had opened Arla up to new applications such as Yorkshire puddings and pie fillings.

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