Restaurants in the U.S. are facing significant challenges due to soaring egg prices, which have reached record highs. This situation is exacerbated by the increasing popularity of breakfast menus at various eateries, which significantly rely on eggs for their offerings. Over the past decade, breakfast-centric establishments like First Watch, Eggs Up Grill, and Another Broken Egg Café have seen substantial growth, with the number of locations skyrocketing. First Watch, for instance, now operates 570 locations, expanding its footprint nearly fourfold during this period.
Fast-food franchises are also expanding their breakfast selections, as demonstrated by Starbucks, which introduced egg bites in 2017 and now features a breakfast menu with 12 different egg-containing items. Similarly, Wendy’s reintroduced breakfast in 2020, offering a range of 10 egg-filled choices. Data from Yelp indicates a noteworthy increase in breakfast and brunch establishments, with over 6,400 new businesses opening in the last year alone, up 23% from 2019.
Typically, egg producers can meet the rising demand, but the current bird flu outbreak has severely impacted supplies. Since the outbreak began, approximately 159 million birds, including nearly 47 million since early December, have been culled, causing a significant reduction in egg availability. Consequently, the average price for a dozen eggs reached an unprecedented $4.95 in January.
While specific data on the proportion of eggs used in restaurants compared to grocery stores is unavailable, it is clear that demand from the foodservice sector is on the rise. According to market analysis firm Circana, foot traffic for breakfast meals has expanded significantly since 2019, with pre-lunch dining accounting for 21% of total restaurant visits in early 2024. Breakfast sandwiches have emerged as the favored item during morning hours, with an impressive 70% of these sandwiches containing eggs.
Ricky Richardson, CEO of Eggs Up Grill, believes that the resurgence of breakfast restaurants can be attributed to a post-COVID desire for comfort and connection. As the economic situation tightens due to inflation, many consumers have turned to breakfast and lunch as more budget-friendly dining options.
This shift in restaurant demand marks a reversal from the pandemic era when more consumers were stockpiling eggs for home cooking, while restaurant usage decreased sharply due to temporary closures. Historically, U.S. egg consumption had been declining for over fifty years, reaching the lowest point of 247 eggs per person in 2008. However, as nutritional benefits were highlighted through marketing, consumption rebounded to an equivalent of 292 eggs per person by 2019, according to USDA figures.
Other factors have influenced egg market dynamics. In response to animal welfare advocacy, major companies like McDonald’s have shifted to exclusively sourcing cage-free eggs, narrowing their supplier pool. Additionally, legislative changes in states such as California and Colorado now restrict egg sales to those produced in cage-free settings, adding layers of complexity to the market.
With wholesale egg prices climbing to a national average of $7.34 per dozen, restaurants are feeling the pinch. This figure reflects a staggering 51% increase compared to the start of the year. Oftentimes, wholesale prices can surpass retail amounts, as supermarket chains typically utilize eggs as loss leaders to attract customers.
To mitigate the impact of rising costs, some chains, including Waffle House, have opted to implement a surcharge for their egg dishes. Others may explore alternatives, such as using substitutes like tapioca starch or removing egg-based items from their menus entirely. Despite this, some establishments like First Watch are managing to maintain their egg offerings without increasing prices. Chris Tomasso, President and CEO of First Watch, emphasized the essential role of eggs in their menu, featuring them prominently across a variety of dishes.
In a recent discussion among Eggs Up Grill franchisees regarding potential surcharges, the group decided against this route, affirming the importance of eggs in American cuisine, as noted by Richardson.
