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NH business concerned about changes to organic food rules

Union Leader Correspondent

January 29. 2017 8:46PM
Jesse Laflamme, CEO of Pete and Gerry's Organic Eggs, stands outside the company's headquarters recently holding his company's product. (JOHN KOZIOL/UNION LEADER CORRESPONDENT)

MONROE — With national retailers and quick-serve restaurants pledging to sell and use only cage-free eggs within the next decade, Pete and Gerry’s Organic Eggs is getting ready for an inevitable sales boom.

But the family-owned business, which sold 60 million packages of eggs nationwide last year, is also watching what happens in Washington, D.C., as President Donald Trump has promised an across-the-board rollback of government regulations, including one that Pete and Gerry’s CEO Jesse Laflamme says would expand the provisions for the care of laying hens and, by extension, further codify the meaning of the word “organic.”

The bottom line, said Laflamme during an interview last week, is that consumers could become confused about what a truly “organic” egg is. Pete and Gerry’s could lose market share if cage-free eggs are allowed to be produced on an industrial scale by companies that might meet the technical definition of organic, but not the spirit, he said.

In the final days of the Obama administration, the U.S. Department of Agriculture adopted rules requiring poultry producers to, among other things, give chickens enough room to move freely and spread their wings, as well as have access to fresh air, good ventilation and direct sunlight.

The rules are part of the voluntary opt-in for egg producers who want to be certified organic, and because they are voluntary, they have been praised in the past by Republican lawmakers as examples of “good regulations,” Laflamme said.

Should Trump roll back the animal welfare protections for egg producers, however, then agri-businesses in the Central and Midwest states could be designated as “cage free” even though they would house 1 million to 5 million or more hens in multi-story facilities.

Laflamme said some of those facilities house the hens in stacks of cages, which are not considered “cages” per se because they allow the hens to exit and re-enter, albeit with some effort.

By contrast, Pete and Gerry’s hens — most of which are owned and live on 120 family farms in 12 states — reside in single-level hen houses, not in platforms, and have access to both natural light and fresh air, Laflamme said.

Laflamme estimated that some 200 million hens will be needed to meet demand annually in the U.S. That has created a housing shortage for hens that some large producers are filling in ways that some consumers may not think is wholly organic.

“We want ‘organic’ to mean more to consumers, (rather) than less,” said Laflamme, adding that Pete and Gerry’s and other smaller producers were concerned “about the broad brush of deregulation” that could be coming from the Trump White House.

Cage-free eggs sell at premium prices. Hannaford sells Pete and Gerry’s Organic Large Brown Eggs for $4.99 a dozen. The grocery chain’s private label brand of conventional large brown eggs sells at $1.29 a dozen.

Jennifer Gornnert, the director of the new state Division of Regulatory Services, and the head of the organic-certification program, said while she personally thinks cage-free eggs are a good idea, she is not sure the Granite State is poised to take advantage of the national demand for them.

“Poultry was a huge industry in New Hampshire a long time ago,” she said last week. She added, however, that now “Pete and Gerry’s is probably the only real large producer anymore.”

“We don’t have the infrastructure” for large numbers of hens to lay cage-free eggs, she said. “We don’t even have a place in-state for somebody who wants to slaughter their chickens for meat,” Gornnert said.

Asked about the possible ramifications of reduced or reversed animal-welfare standards by the USDA, Gornnert said it would be inappropriate to speculate about them since they have not been formally announced.

All cage-free eggs are not created equally, Laflamme says, and if the rules for the well-being of organic livestock are curtailed or eliminated, then “more and more eggs will be produced on factory farms.”

To counter that possibility, Pete and Gerry’s will stand on its core branding as an egg company that does right by both its customers and its hens, and in the second quarter of 2017 the business will also launch a marketing campaign in New England via TV, radio and digital platforms.

The goal is to effectively communicate “with consumers in our space who believe in animal welfare and want a product that they can believe in,” said Laflamme.

The organic egg industry is growing by 10 percent annually, Laflamme said, and Pete and Gerry’s two product lines have each grown 50 percent a year since 2013.

Every day, Pete and Gerry’s processes 3 million eggs — 1.3 million of them at its headquarters and main plant here on Buffum Road, and the balance at a plant in Greencastle, Penn. The company has 150 employees between the two sites, and its products are carried by over 9,000 retailers throughout the majority of the states.

“We can’t rest on our laurels,” Laflamme said. “We really need to rely on our marketing to get people to buy into our stories, to buy into our values.”

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