Jonathan: Back in 2005 when we started selling our home-produced eggs, we set the price to about 5p to 10p below the price, charged by the Co-op in Daliburgh, of half-dozen of their own-brand free-range large eggs. Ours were of mixed sizes, on average at least Large size, but much fresher, tastier and with bigger and more richly coloured eggs. It seemed a fair deal to us, and as sales were brisk it seemed our customers agreed. Back then, our sale price was £1.75 per half-dozen, but as inflation took its toll prices rose until – a little more than a year ago – the Co-op were charging £2.03 per half-dozen. By then we’d long since found that feed prices were going up faster than supermarket prices or inflation generally, and we were having to charge £2.00 per half-dozen. Since then, feed prices have – short-term and seasonal fluctuations aside – continued to rise. But it’s been impossible for us to continue to lift our prices because … well, I’ll come back to that in a moment.
In general, the larger the scale of production, and the greater the investment in machinery and know-how, the lower the cost of labour ; and if all is well, the lower the overall costs, inspite of the higher costs from the capital invested. Thus, as the scale of the operation increases, materials become a higher proportion of the total unit cost of production – and this is even more true if the market for that commodity is very competitive, and it is difficult to differentiate one producer’s goods from those of another producer (and that’s certainly true of eggs!). Eggs? Well, they’re just eggs, aren’t they?
Our own production is driven by ideas very different to those of commercial production: intentionally low-capital, low impact, and with animal welfare, environmental sustainability, and localism as core values. Labour is not a cost – it’s just what’s left for us when all costs are paid. And as it is very difficult to get customers to see the difference between our eggs and those from the shop (even those who buy them regularly can’t seem to think of anything other than size and price, – or even just price!), there tends to be very little left for us at the end – at the end of very long working days. So as feed costs have continued to rise and rise, we are left only with the hope that our eggs are an introduction to the other things we do (which are – thankfully – more profitable).
So back to our selling price, stuck at £2.00 per half-dozen. Stuck there because the Co-op are still selling at £2.03? If only! No, quite the opposite. Out of the blue, about a year or more ago, the Co-op suddenly reduced prices by about 20p. As a special offer, perhaps? No, permanently. Then, more recently, prices were cut again – to £1.65 per half-dozen (large, free-range, own-brand). Now they’ve been cut again to just £1.29 – and no indication that this is a short-term change in pricing.
Have feed prices gone down? No, not at all! Seasonal wobbles aside, the price on the futures markets (and thus price of bulk purchases for big producers) has continued to climb. At our bagged-feed end of the market, we don’t get the wobbles, just the rises.
So, is this just loss-leading to get customers into the store? Or is it part of a general price war with other supermarket chains? If so, what relevance has that got here in South Uist where there is grocery shop other than the Co-op? Or perhaps it is, heaven-forbid, an attempt to drive other local independent producer-sellers out of business? Well, I guess that sort of thing does happen! But who is paying the price of this policy? Is it the Co-op cross-subsidizing loss-leaders, or is the Co-op pressurizing its own suppliers to take lower prices. We know that happens with milk! But this is the Co-op, bastion of old-fashioned ideals of social justice, co-operation and fairness in business, and flag-bearer for Fairtrade everything!
Our experience – or rather my own experience when I was ‘In Exile’ (living and working in Hertfordshire and Essex) 2009-2010 was that, no matter how much is paid for eggs from a supermarket, they are pale and tasteless. Yes, even Yummy Eggs or Happy Eggs or Woodland Eggs or whatever. Nothing, absolutely nothing like our eggs with big dark orange yolks, packed with flavour and ‘Omegas’ from ranging freely on the land and shore of our croft. It is so dis-heartening when someone – a visitor to the islands – comes to our door and asks for a half-dozen (they haven’t bothered to look at the price or information by the garden gate) : we ask for £2 and – without even having looked at the eggs or asked about them they retort: ” I can get them for a £1.20 at Asda”, or “My daughter has three hens and she sells them for £1”. Denise will just take the eggs back and says “Well go and by them there then!”.
Many times – with increasing frequency, I suspect! – we’ve seriously considered just giving up on eggs for sale ; but quickly we recall that it is often the case that someone comes into the garden just for eggs, but ends up spending much more on other things we do ; or we remember how valuable the soiled straw and manure from the hen-houses are for maintaining garden fertility ; or how our famous lemon curd depends on our own home-produced eggs ; or that keeping hens just to supply our own household with eggs would be even more uneconomical – we’d just end up buying eggs from the supermarket like everyone else.
So … we’re fighting back! No, not on price – we can’t possibly do it. And as for quality – well, there’s always room for improvement, but we’re already producing the quality that most customers – if not alas enough customers – come back time and again for. No, we’re going to fight back in terms of communicating with customers, establishing a clear difference between what we produce and the run-of-the-mill commercial alternative. The only place we can do that is in the spaces we control: our websites, of course, and face-to-face with customers ; but above all at the garden gate. And at the garden gate, that starts with the simple sign that says ‘Eggs’. One line of thinking says we need a brand name, a name that customers will remember, and it’s got to be simple and make the point. Well, there’s no scientific answer to this, all we can do is hope for inspiration, but all we could think of was Yolkels. (Or should that be Yolkals – as in Yolkal Food for Yolkal People” !) But no, that’s not really our style … and in any event we’re not trying to establish a brand in a competitive marketplace, we just want to convey to folk at the garden gate that our eggs are something to look forward to! So, maybe a compromise between the Eggsisting sign – and the Yolkels ?