How In-Ovo Egg Sexing Technology Will Enter the US Market
In-ovo egg sexing technologies already have a strong presence in Europe, but don't yet exist in the US. This could change soon, as many stakeholders in the US, including Vital Farms, Unilever, and The United Egg Producers, have already expressed interest in the technology. While technological improvements are still needed before in-ovo sexing is adopted industry-wide, the path to commercialization need not wait for the technology to be perfected. As with many novel technologies, in-ovo egg sexing will most likely start at the high end of the market, and then come down market over time as costs fall. This could happen in three phases:
Phase 1 - Brand Differentiator
The US boasts a thriving specialty egg market consisting of consumers happy to pay a premium for cage-free, organic, or pasture-raised eggs. These shoppers are the ones most likely to pay an additional small premium for in-ovo sexed eggs (in Europe, this premium is around 1-3 euro cents per egg). Early US adopters of in-ovo sexing technology are thus likely to be companies already catering to this market, such as pasture-raised egg producers, like Vital Farms, or retailers emphasizing sustainability and animal welfare, like Whole Foods.
Eggs are a commodity product, meaning that differentiation is critical to drive demand. As in-ovo sexed eggs are currently only available in Europe, the first company to introduce them in the US will have a unique selling point that could generate significant positive media coverage and consumer interest.
Awareness of chick culling among American consumers is quite low, however. To maximize the value proposition of in-ovo sexed eggs, early adopting companies may invest in consumer education to explain the advantages of in-ovo egg sexing.
Phase 2 - New Specialty Category
As in-ovo egg sexing technology becomes more cost effective and accessible, more companies will be able to adopt it. The technology will no longer be a significant brand differentiator for early adopters, but rather create a new category of specialty eggs, akin to cage-free. These eggs will maintain a modest price premium, offering additional choices to consumers and food companies seeking higher-quality, sustainable eggs.
At this stage, efforts to maintain transparency and consistency in the supply chain will likely emerge. The USDA might issue guidelines on which terms may be used on egg cartons, or, independent certification programs could emerge, like the “free of chick culling” stamp in Europe. Alternatively, the technology could be integrated into existing standards, like those from Global Animal Partnership (GAP). These certifications will allow companies to showcase their commitment to higher welfare standards without the difficulties of consumer education.
Phase 3 - Commodification
As companies continue to refine their in-ovo egg sexing technology, invest in R&D, and capitalize on economies of scale, the cost of the technology will continue to fall. Eventually, it will reach cost parity with existing methods, or even be a cost-saver for hatcheries because of lower incubation and labor costs. After there are no more barriers to adoption, the egg industry will experience a significant shift, as hatcheries are incentivized to adopt this technology purely for the economic benefits.
At this stage, in-ovo sexing will no longer be reserved for specialty eggs; instead, it will become the standard industry practice. The eventual commodification of in-ovo egg sexing will result in an overall more sustainable and humane egg production system, which will ultimately be a win for the industry, for consumers, and for animal welfare.
Innovate Animal Ag’s current goal is to help move the US into Phase 1 of this commercialization process. If you’re a producer in the US specialty egg supply chain interested in differentiating and elevating your brand by carrying the first in-ovo sexed eggs outside of Europe, please reach out!
