Burning Questions
Fellowship Award Winners

Guidance Memo

• Title: Egg producer and egg buyer disconnect: Exploring barriers and levers to increase cage-free egg production in China
• What We Learned From It:
  • About 40% of the world's chicken eggs come from China. Although there is interest in cage-free eggs production in China, the transition has been slow. A key reason - the focus of this Guidance Memo - is that there is a fundamental disconnect between egg producers and buyers (retailers and end consumers). 
  • The Guidance Memo first gives an overview of China's egg industry and commitments to cage-free production.
  • Three BARRIERS causing the disconnect are explained: 1. Understanding – Global cage-free egg campaigns have focused on the singular issue of animal welfare. But the concept of animal welfare is not well understood in China and there is confusion about "cage-free" in China's egg marketplace. 2. Cost – Transitioning to cage-free is expensive and comes with considerable financial risk for Chinese producers. And domestic egg buyers are generally unwilling to pay the resulting price increase. 3. Confidence – Egg producers are not confident that food businesses will keep their commitments. In turn, egg buyers can’t always trust claims of traceability and verifiability of their eggs. 
  • Five LEVERS to align egg producers and buyers are suggested: 1. Support and fund initiatives for producers and buyers that are firmly China led and driven. 2. Improve transparency and accountability of cage-free commitments specifically in China. 3. Ensure the term "cage-free" is associated with trusted, premium products addressing multiple ethical and social concerns. 4. Increase market demand by targeting receptive demographics (those more concerned with animal welfare, safe, healthy food, and a willingness to pay a price premium for products addressing these concerns). 5. Focus engagement with multinational grocery retailers operating in China yet to make cage-free commitments.

Links

• Read the Guidance Memo 
• Read the Annotated Bibliography

Some of the Things We Really Liked when We Read the Application

• China is the world's largest egg producer. For the past decade, international retailers, brands, consumers, and NGOs have been trying to get Chinese egg producers to keep their hens in cage-free systems. But the transition from cage to cage-free faces bottlenecks. Clearing these bottlenecks is challenging: Chinese egg supply chains are complex, highly variable, and fast evolving. Production data are needed in order to resolve problems, but these are buried in academic literature or commercially sensitive so are not publicly available. For producers to invest in expensive cage-free equipment and new management, they need confidence that buyers understand the challenges they face and will support them during the transition.
• One major bottleneck is the disconnect between producers and buyers. That is why pinpointing the trouble spots, coming up with reliable, contextualized information at a granular level, understanding the views of and actual reality faced by farmers, producers, retailers, consumers, clarifying where exactly the disjointedness among these parties occur, will help greatly in bringing down barriers and clearing bottlenecks.