Egg Sales Rebound After Massive Recall

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By David Mercer, Associated Press

CHAMPAIGN, Ill. (AP) — Sales of eggs have rebounded after a sharp drop in the weeks following the August recall of 550 million eggs potentially contaminated with salmonella.

The upswing is a relief to egg producers, but industry leaders said they thought sales would return to normal as the recall by two Iowa farms faded from memory. The industry also spent about $1 million on an ad campaign emphasizing its commitment to food safety.

"I think that ad campaign and what we did was really effective," said Jacques Klempf, president of the Jacksonville, Fla.-based Dixie Egg Company, one of the country's largest egg producers. "We hit all the major markets and tried our best to put (out) some science and some reason."

Immediately after the recall, producers were more concerned.

Retail egg sales for the month that ended Sept. 5 were down 9% from mid-summer, before the recall, according to data from SymphonyIRI Group, which tracks sales of food and other products. People bought 108.3 million units — or packages of any kind, including dozen and half-dozen cartons — making it the slowest month in at least two years.

But SymphonyIRI told The Associated Press that by the first of November, sales were back up to 114 million units a month. That's just under sales a year earlier and a little more than sales during the month before the recall.

The egg industry reacted quickly with its ad campaign and other steps to limit what it feared could be a serious problem. The American Egg Board bought full-page ads in USA Today, The Wall Street Journal and a couple dozen other newspapers and publications, all emphasizing food safety, said Cindy McGarrigle, a vice president with the Park Ridge, Ill.-based group.

The board also provided a dietitian for interviews about egg safety with radio and TV stations around the country, and it started surveying consumers.

"Obviously we wanted to gauge the changes in consumer attitudes," McGarrigle said. "We kept seeing improvement in the areas measured."

Grocers, too, took immediate steps to limit the damage.

"We got signs up quick saying we bought all our eggs from these particular egg farms and they were not affected," said Mark Brase, vice president of marketing for Dahl's Foods, a Des Moines, Iowa-based grocery store chain. "We were not affected by the recall at all."

Still, the biggest factor might have been the ubiquity of the egg. People count on it to make waffles, bread and myriad other foods that many can't do without.

"It was one of those things — we bit the bullet," said Justin Arbogast, a 29-year-old Champaign, Ill., chef who works at a University of Illinois sorority house and cooks a Sunday brunch with French toast, omelets and other egg-heavy dishes every week. "We just had to have them."

Americans also tend to have short memories. After media attention dies down, there is a general faith among consumers that problems will be solved.

"We always think, 'Oh wow, this is a big deal,'" said Ben Jackson, an agricultural economist with IHS Global Insight, an economic forecasting firm based in Philadelphia. "I think it was just really things getting back to normal. We've seen this with spinach and lettuce and various things."

Not all egg producers suffered, with at least some specialty companies reporting stronger sales.

Charlie Lanktree, the chief executive officer of Jeffersonville, Pa-based Eggland's Best, said he took a number of calls after the recall was announced. Grocers wanted to know if Eggland, which specializes in organic, cage-free and other non-traditional eggs, could offer its products to replace traditional eggs that weren't selling well.

"What they basically said is, 'Hey, listen. We're a little nervous about doing anything on generic eggs. Can we work with Eggland's Best on some extra promotion?"

Although the drop in sales was short-lived, some producers said it has convinced them to change their approach to food safety. They also noted the implementation of tighter standards mandated by the U.S. Food and Drug Administration.

Dixie Egg hired a full-time director of food safety after the recall, combining work that had been split among several other people who also had other jobs, Klempf said. "It's a different ball game out there right now."

And it's clear that not all consumers expect to return to their old buying habits.

Mary Bailey said she now only buys organic eggs from hens not kept in cages. In the past, she bought the least expensive eggs she can find. As she shopped this week at a grocery store in Champaign, Ill., the 67-year-old retired nursing professor said she doesn't believe conventional egg producers are safe enough.

"I'll even pay a dollar or two dollars more," she said. "The other ones are too scary."

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Associated Press writer Michael J. Crumb in Des Moines, Iowa, contributed to this report.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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