McDonald's plans to switch to cage-free eggs

NEW YORK - McDonald's (MCD) says it will switch to cage-free eggs in the U.S. and Canada over the next decade, marking the latest push under CEO Steve Easterbrook to try and reinvent the Big Mac maker as a "modern, progressive burger company."

Under pressure to revive slumping sales, McDonald's has already announced a number of changes since Easterbrook stepped into his role earlier this year. In March, the Oak Brook, Illinois company said it would switch to chickens raised without most antibiotics. And in April, it said it would raise pay for workers at company-owned stores, which represent about 10 percent of its domestic locations.

The decision to switch to cage-free eggs signals a growing sensitivity among customers to animal welfare issues. That has been fueled in part by places like Chipotle that have made animal welfare standards part of their marketing.

The news from McDonald's, however, was not warmly embraced by all activists.

"With this announcement, McDonald's is replacing real action with more PR," Sriram Madhusoodanan, director, Value [the] Meal campaign at Corporate Accountability International, said in a statement. "A growing number of people are calling for changes like this and more -- from the corporation's marketing to its labor practices -- to be implemented today, not in a decade."

Animal welfare activists also have long called for the banishment of battery cages, which confine hens to spaces so small they're barely able to move. For at least the past 10 years, the Humane Society of the United States has pressed McDonald's to switch to cage-free eggs at the company's annual shareholders meeting, said Paul Shapiro, the group's vice president of farm and animal protection.

"It's a real watershed moment," Shapiro said of the decision by McDonald's. "It makes it clearer than ever that cages just do not have a future in the egg industry."

The Humane Society has been actively campaigning to get Costco Wholesale (COST) to follow up on its 2007 pledge to switch to cage-free eggs, with Steve-O, best known for his role on MTV's Jackass, the latest celebrity to call on the retailer to stop selling eggs from caged chickens.

"When I need a pack of 300 AA batteries or a box of 1,000 veggie burgers, I know I can count on you," Steve-O wrote in a letter to Costco CEO Craig Jelinek last week. "However, I and horrified at how birds are warehoused - packed so tightly they are being choked by the corroded wires of their cages. I'm not excused from occasional gross behavior, but there is no excuse for forcing living beings into this kind of misery."

Regulatory changes could also be making it easier for companies to agree to change. In California, a law now requires that egg-laying hens be given enough space to stretch, turn around and flap their wings.

Among the companies that have said they will switch to cage-free eggs are Subway and Starbucks (SBUX), although neither of those chains has laid out a timeline for when they expect the transition to be complete.

Already, McDonald's says it buys about 13 million cage-free eggs a year in the U.S. But that is still less than 1 percent of the 2 billion eggs it uses annually to make menu items such as Egg McMuffins. Overall, only about 6 percent of the nation's egg-laying hens are cage-free, according to the United Egg Producers. Chad Gregory, CEO of the industry group, said he expects that figure to climb.

Marion Gross, senior vice president of the North American supply chain at McDonald's, said the company is working with its existing egg suppliers to convert housing systems for hens. Gross said she thinks the change will be "truly meaningful" to customers.

"They know how big we are, and the impact we can make on the industry," Gross said.

McDonald' is also likely to increase its egg purchasing over time; starting Oct. 6, the company plans to offer select breakfast items all day in the U.S.