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65% of Americans Opposed
to Factory Farm Animal Cruelty


September 1, 2002
New York Times
GRASS-ROOTS BUSINESS

A Marketing Cry: Don't Fence Them In
By ALEX MARKELS

DENVER -- WHEN it comes to the family business, Jack Osborne and his
daughter, Cyd Szymanski, are putting the chicken before the egg.

Deploring what Ms. Szymanski calls "concentration camp" growing conditions
on factory egg farms, she, her father and her brother are marketing eggs
gathered from uncaged hens. As it happens, that has plunged her into a
rivalry with her uncle, Hollis Osborne; he heads Moark L.L.C., one of the
nation's largest egg producers, now owned in part by Land O'Lakes.
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With the rest of the industry hurt by overproduction, the family's egg
distributor, Colorado Natural Eggs, is profiting by focusing less on
economies of scale and by giving chickens room to roam.

Outside Longmont, 35 miles north of here, Jack Osborne, 69, stood in his
kitchen < lined with wallpaper and knickknacks depicting his favorite fowl <
raised his hands and cut a 6-by-8-inch cube into the air. "It's inhumane to
put a chicken in a cage this small," he said with a grimace. "You can't even
lift your wings."

Raised on a Missouri chicken farm, Mr. Osborne said he became frustrated as
the business that he and his brother, Hollis, started in the 1950's grew
into a huge operation that stuffed more and more chickens into cramped
cages. He said he was convinced that a more humane approach could still make
a profit, and in the late 1970's was among the first to advocate larger
cages. Then he came up with a different idea: cage-free hens.

"Hollis thought I was plumb nuts," Mr. Osborne recalled. "He said, `Aw,
there's no market for that.' "

So he quit and headed for Colorado, where he founded his cage-free operation
in 1991, recruiting his daughter to sell the eggs to natural-food stores.

The business, based here, was slow to take off. But he and Ms. Szymanski,
45, an animal-welfare advocate with a knack for marketing, soon made inroads
with supermarket chains like Albertsons and Kroger, which placed their Nest
Fresh brand next to eggs supplied by Moark, which says it has $400 million
in annual revenue.

Until recently, though, the two businesses were not really rivals. "Cage
free" eggs, at around $2.79 a dozen, typically cost more than twice as much
as other eggs; in the past, they were bought mostly by dedicated
natural-foods shoppers. But after a potent media campaign by animal-rights
groups about the growing conditions of farm animals, some buying habits
started to change.

"Americans are becoming more focused on issues that affect food quality, and
the treatment of farm animals is a big part of that," said John Zogby,
president of Zogby International, a pollster in Utica, N.Y. In a May survey,
it found that nearly 65 percent of Americans support federal laws to protect
farm animals from inhumane procedures.

Since People for the Ethical Treatment of Animals raised consumer
consciousness in the late 90's with its campaigns to push McDonald's,
Safeway and other chains to buy products according to its animal-welfare
guidelines, Colorado Natural said its sales have grown more than 20 percent
annually, to about $4 million last year.

DRIVING door to door in an Audi station wagon with a license plate reading
"EGGLADY," Ms. Szymanski now markets eggs to a half-dozen supermarket chains
in the Rocky Mountain states. Although phobic about the birds after a
childhood surrounded by their incessant pecking (now, she likes to be around
the eggs, but not the chickens), she champions their welfare. "They're
intelligent, sentient, social animals," she said, standing in front of her
company's processing factory here, under a sign reading "Eggs With a
Conscience."

"Part of my mission is to publicize the industry's track record of cruelty
and the pain caged operations inflict on these animals."

For some time, traditional producers have been beset by health concerns over
cholesterol in eggs and forsaken by busy consumers who have turned to
quicker breakfast foods. The industry has not had a cohesive marketing
effort since the "incredible edible egg" campaign began more than two
decades ago.

Hard times have forced thousands of small farmers out of the business,
pushing the remainder to build ever-bigger farms, sometimes housing millions
of chickens each.

Yet the specialty category < including cage-free and organic eggs, as well
as eggs fortified with supplements like omega-3 fatty acids, which have
various health benefits < has grown fivefold since 1997. While that is still
only about 5 percent of the market, "cage-free is the fastest-growing
segment, and it's got the highest margins," said Donald D. Bell, an industry
economist at the University of California at Riverside.

That is mostly because of a three-year glut of caged hens, pushing farm
prices below producers' break-even point. Although cage-free eggs are more
expensive to hatch, their high profit margins < from 15 to 25 cents a dozen
< more than make up the difference. "If there's any money to be made in the
egg business these days, it's in these specialty eggs," Mr. Bell said.

That fact has not been lost on big producers like Moark, which has responded
by introducing cage-free and other specialty varieties. Since teaming up
with Land O'Lakes, the giant dairy co-op, in 1999, it has introduced All
Natural Farm Fresh eggs under the Land O'Lakes label. The eggs are from
caged hens fed with what the company calls a "whole-grain diet" free of
antibiotics. "It's becoming a big seller, especially in the Northeast," said
Paul Osborne, Hollis's son, who is Moark's vice president for marketing and
a spokesman for the company.

The All Natural brand has also made inroads in Colorado, where Ms. Szymanski
said some grocers pulled her most profitable eggs, the extra-large and jumbo
cage-free varieties, off of shelves last year to make room for it. "My
cousin promised me he wouldn't compete with us because we're family," Ms.
Szymanski said recently. "But he knocked out my two highest-margin items."

Even worse, Ms. Szymanski contends that Land O'Lakes priced its eggs just
below her Nest Fresh brand and used similar wording on the packaging.

"Land O'Lakes has got this great name and reputation, but that egg isn't any
more `natural' than a regular egg," she said.

Industry experts say Land O'Lakes All Natural eggs are little different from
standard eggs. "They use the same corn, soybeans and vitamin feed mix," said
Dean Hughson, an egg industry consultant. "They're basically selling a
regular egg with a fancy carton."

Paul Osborne disputes that. "We feed the hens a different way and put only
younger hens on the feed," he said. "So the best-quality egg goes into that
carton."

He says the eggs, as he promised, do not compete directly with Colorado
Natural's. Yet he said the growing popularity of cage-free eggs was making
it increasingly difficult to maintain that promise. "I don't sell cage-free
eggs in Denver, but I am selling them in other areas," he said. "As demand
grows, we'll produce more, although I personally think it will remain a
niche market."

Jack Osborne says that is just the sort of talk he used to hear from Paul's
father, Hollis. Jack points to Europe, where animal-rights groups have
persuaded legislators to pass some laws banning caged chickens. "The same
thing will happen here," he said. "It may take a little longer. But American
consumers aren't so different from the folks over in Europe. They prefer to
buy farm eggs, not `harm' eggs."

OPENING the door to the chicken house at his ranch near Longmont, he proudly
points to a flock of 14,000 egg-layers milling about the barn. "See? They
got sunlight and natural air, and they've still got their beaks," he said,
adding that many farmers cut off the beaks to keep chickens from pecking one
another. "Have you ever seen a chicken with its beak cut off? It's a darn
awful sight."

Worried that consumer sentiment could force mandatory changes in the United
States, the United Egg Producers, a trade group, is promoting adherence to
new voluntary standards that, among other things, would increase cage space.

"We're committed to giving our hens more space," Paul Osborne said. He added
that all of Moark's 14 million hens would be covered under the guidelines.

Jack Osborne recalls similar promises producers made to the Humane Society
of the United States in the early 1980's. "Then egg prices went back up and
everyone forgot about it," he said. "Hopefully, this time, consumers will
know a fox when they see one."

For Colorado Natural, there is reason for optimism. Last month, King Soopers
supermarkets replaced Land O'Lakes All Natural eggs with Colorado Natural's
newest cage-free variety, featuring an omega-3 supplement. Asked the reason
for the change, a grocery clerk said demand for the Land O'Lakes eggs
"wasn't so hot."

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