Red Robin going cage-free

Chickens spend their entire lives in battery cages.

The effort to end the use of battery cages to raise egg-laying hens took another step forward in June. Red Robin Gourmet Burgers (NASDAQ: RRGB) announced that it intends to serve only cage-free eggs in its more than 300 company-owned restaurants by the end of 2010. When the Greenwood Village-based company announced its plan in late June, it said that by July, one-third of all its eggs would be cage-free.

The company worked with the Humane Society of the United States (HSUS) to develop the policy, according to Paul Shapiro, senior director, Factory Farming Campaign for HSUS. The organization helped Red Robin and other restaurant chains such as Burger King and Wendy's, to find suppliers that can provide eggs from "cage-free" chickens.

When a company such as Red Robin, with more than 300 locations in 40 states and $869 million in revenue in 2008, switches to cage-free eggs, there is a cost premium, according Shapiro. Each dozen eggs costs about 20 percent more. That equals about 1 cent per egg. Even so, interest in cage-free eggs is growing among large chains. Three years ago cage-free eggs made up 2 percent of the market. That number has tripled since and will grow further, Shapiro says. He points to California's Prevention of Farm Animal Cruelty Act, which prohibits the confinement of hens in battery cages, as a main driver.

Cage-free, according to HSUS, means the chicken is able to walk, spread its wings and lay eggs in a nest, though not necessarily go outside. Battery cage-raised hens on the other hand, spend their entire lives in 67 square inches of space, according to HSUS.

Red Robin is also in the process of working with pork suppliers to phase in gestation crate-free pork at company-owned locations.