(Adds analysis of cost after California move)
By Lisa Baertlein and Sruthi Ramakrishnan
Sept 9 (Reuters) - McDonald's Corp (NYSE:MCD)'s MCD.N 16,000 U.S. and
Canadian restaurants will serve only eggs laid by cage-free
chickens within 10 years, the company said on Wednesday.
McDonald's USA has been buying more than 13 million
cage-free eggs annually since 2011. The long-awaited switch is
happening as North American egg suppliers are slowly starting to
rebuild flocks after the worst bird flu outbreak in U.S.
history.
The move comes as McDonald's, the world's biggest restaurant
chain, is preparing to serve breakfast all day at U.S. outlets
in October. McDonald's USA, which is fighting sagging sales,
made waves in March by announcing a two-year plan to phase out
meat from chickens raised with antibiotics used to fight human
infections.
McDonald's buys about 2 billion eggs annually for its U.S.
restaurants and 120 million for Canada to serve breakfast items
such as Egg McMuffin and Egg White Delight. ID:nMKWl0MP3a
Fast-food rival Burger King QSR.TO already has committed
to using only cage-free eggs by 2017. Other large companies such
as Starbucks Corp SBUX.O , General Mills Inc (NYSE:GIS) GIS.N , Nestle,
Sodexo Inc EXHO.PA and Aramark ARMRKA.UL also are in the
process of switching.
Groups such as the Humane Society of the United States
(HSUS), Mercy for Animals and World Animal Protection have
successfully lobbied many companies to adopt animal welfare
practices. Such groups also have won commitments from nearly 100
major companies to phase out so-called gestation crates, which
are small cages for breeding sows.
Celebrities such as film star Ryan Gosling have teamed up
with HSUS to pressure Costco Wholesale Corp COST.O to
eliminate cage-confined chickens from the company's egg supply
chain. HSUS said Costco has committed to going cage free, but
has not set a timeline for its full transition. HSUS said Costco
rival Wal-Mart Stores Inc (NYSE:WMT) WMT.N also has not set a timeline.
U.S. companies, led by burrito seller Chipotle Mexican Grill (NYSE:CMG)
Inc CMG.N and other popular brands, increasingly are sourcing
their ingredients from suppliers who vow to use humane and
environmentally sustainable agricultural practices.
California voters in 2008 passed a law mandating that all
eggs sold in the state come from chickens given more spacious
living quarters. That law went into effect on Jan. 1 and other
states and countries since have followed Calfornia's lead.
So far this year, the price of a dozen eggs has averaged 67
cents more in California than in the Midwest, said Brian
Moscogiuri, market reporter for shell eggs and egg products at
Urner Barry.