If you think about it, every grocery category has branded product and private label (store brand) products. Take the deli meat case in Walmart for example. There are national brands like Hillshire Farms, Oscar Meyer and Jennie-O, regional brands like Boar's Head and Tennessee Pride, and Walmart’s own price-sensitive private-label brand; Great Value.

Why is there no national brand in the egg category?

This brand & private label scenario plays out across every category in every grocery store across the nation – except in one category: Fresh Eggs. Now Fresh eggs are sold everywhere, but why is there no national brand?

Limited shelf life

For one reason, egg distribution is a regional business, where local farmers supply local grocers. Eggs of course have brittle shells and are difficult to ship. Their limited shelf life of 3-5 weeks if refrigerated, prevents the distribution of a national brand. National branding only arrived in the dairy case 20 years ago when two technologies came together: aseptic packaging and refrigerated trucks.

Eggs are a commodity item

There is no better quality of egg, so no price or quality tiers exist. In the business, there are what we call “specialty eggs,” that consist of organic product, and the cage-free option that everyone surveyed is a proponent of but few are willing to actually pay a premium for. So brands do not exist in the fresh egg category because customers know that there is no difference between a branded higher priced egg and a non-branded lower priced egg, and see no reason to pay a premium.

So what is a farmer to do?

Selling a commodity-based product is a no-win scenario, as price is the only customer motivation. Eggs are the cheapest form of protein in the store. I just bought a dozen for $1.18 – or 9 cents per egg, a ridiculously low price for what it takes to produce, package, ship and display the product. Currently we have an overproduction of eggs, so manufacturers are dumping their eggs at below cost and even selling the higher cost organic eggs in non-organic packages at non-organic prices, just to move them out the door.

So how do you build a profitable branded business in the egg category?

You do this by taking several steps:

1. Remove the customer irritations from the product

Cracking eggs is messy and shipping fragile eggs are difficult.

Just as the ready-to-drink category revitalized the beverage category, we start by selling a better product that is “ready-to-pour”. No one needs to crack eggs anymore, and there are many producers of liquid eggs.

2. Make it shelf stable

Aseptic containers are readily available. Select a package with a large pour spout and shrink-wrap the closure to offer safety and security and it creates a great artistic pallet for branding and graphics.

3. Deliver added-value

If we add-value; adding unique flavors and omelet ingredients, we differentiate ourselves as a ready-to-pour product and added value products can be branded and sold above commodity margins, making your product an impulse-based product with a higher perceived value.

This allows you to you eliminate the risk of commodity price fluctuations and enter the marketplace with a brand you can own that possesses a unique and valued difference at a higher price point. With a customer-valued point of difference, you no longer fight the commodity price war and can make reasonable profitable margins.

4. Large particulate filling capability

Now if you have access to a large particulate filling line, you can add tiny bits of sausage, pepper and onion to your liquid egg base and you have a ready-to-pour liquid omelet.

5. Add flavor profiles

From here all we do is to select several flavor profiles for our “Ready-to-Pour” omelet product line. We’d make them with real cheese, real eggs and premium pork sausage. Think of a Mexican Chorizo with jalapeno peppers, sausage egg and cheese, a Cajun sausage, egg and rice, or a Texas style eggs, bacon potatoes, sausage and cheddar.

6. Now brand the line and go to market

To wrap it up we simply name, brand and position the product and take it to market.

The Formula for Success

This is how to take an unprofitable commodity product and turn it into a profitable impulse-driven value-added product and go from the red to the black on your balance sheet.

We did the same thing for Jimmy Dean Foods, converting the price-volatile raw pork sausage business into a stable and higher profit margin business by selling prepared value-added food items as opposed to selling just the commodity raw meat. The brand grew from $300M to $1B+ following this formula.