Rapid growth in pastured eggs using hundreds of farms

A flock of Highland Brown hens search for bugs on a farm in southern Missouri. Access to pasture and forest qualifies these hens as pasture raised. 

But managing poultry was a new venture for this farm.

Tanner Pace, Pace Valley Farms  “Vital Farms projections, they give us projections on new growers. And it was just something that we thought would diversify us even more. Because it's not if it's when there's going to be ups and downs.”

Pace also runs a cow-calf operation with his parents. Experience with livestock made adding 20,000 hens a natural fit in 2019.

Tanner Pace, Pace Valley Farms “When we did first one, people looked at us like we were crazy. It's kind of not normal for Howell County, Missouri. Usually you, you do what grandpa did, you do what dad did, and that's how it goes. Kind of a step of faith.”

Vital Farms which has been selling specialty eggs since 2007. The firm has been steadily increasing the number of farms it partners with as demand for its eggs has grown. Much of the demand comes from the company’s uncommon model.

Pete Pappas, Vital Farms “We have a very unique proposition within the egg community. We are an opportunity for farmers to own and operate independently. We're a buy-sell model where farmers have an opportunity to manage and operate independently. We sell them our chicks they own those chicks, and then we buy the eggs from them. We are there to coach, mentor, help from the moment they receive those chicks to the moment those chicks go out of production. So along that journey, for the 80 weeks in which they, are, operating that farm, we're there by their side to make sure that they can be as successful as possible.”

The primary attraction for consumers is that Vital Farms eggs are pasture raised. The hens are cage-free and can leave the barn during most of the day, returning to their roosts in the barn at dusk. Each barn is surrounded by a series of paddocks, which are rotated every 21 days. 

Pete Pappas, Vital Farms “We believe, very rigorously in a high definition and high standard of animal welfare.  That is the differentiator for the Vital Farms brand. And what differentiates us from any other, egg brand in the marketplace, to be quite honest with you, you might believe that eggs are eggs. Some people believe that eggs are a commodity. We beg to differ.” 

From a grower standpoint, the primary difference from commodity eggs is the lack of a tournament model where farmers compete against other farmers, and the lowest performing farms find their contracts cancelled.

Pete Pappas, Vital Farms:  “We’ll provide the support regardless of how that farm is producing. Now, we are going to do anything that we can to support that farm to ensure that their farm is as productive as possible.”

Producers working with Vital Farms commit 25 acres of paddock for the hens, and each farm is limited to two barns, or 40,000 layers. Vital Farms sources its eggs from what it describes as the “Pasture Belt”, where grass can be grown year-round, a region from eastern Oklahoma and Kansas through Tennessee, Kentucky, and southern Ohio

Vital Farms has seen dramatic growth over the last five years.

Pete Pappas, Vital Farms: “When I came here, I think we were a $100 million brand. We, by the end of this year will be $1 billion brand. In five years time. You don't have an opportunity to do that very often.”

The 10-fold growth in sales required expanding from 200 farms in eight states to over 600 farms in nine states.

Processing and packaging of Vital Farms eggs occur at Egg Central Station in Springfield, Missouri. After an expansion that included a third processing line, five  million eggs pass through the facility daily, nearly double the throughput from 2024.

Mike O'Brien, Vital Farms  “So as we brought on new farms, partnering with more farm families, we also at the same time intentionally grew the capacity here at the plant. But we knew we had to gain an exponential number, right? We needed to get 30, 40, 50%. So we took down a portion of the plant that was coolers, and we dedicated that to a third line. It let us double our overall capacity through the course of the year.”

A second processing plant is under construction in Indiana, which will allow eggs tko be sourced from the eastern part of the Grazing Belt.

In an industry that strives to reduce its supplier count, Vital Farms views dispersed sources of eggs as an advantage. 

Mike O'Brien, Vital Farms “We partner with 600 family farms. And critically, where those family farms are located is also important. So that distributed model also spreads. If there's a terrible storm in one state, you have farmers all over the other states, bird flu breakout, whatever it might be. It's not a bunch of chickens in one building. They're spread out across all these states, across all these farms, out on pasture.” 

Each carton of eggs can be traced back to the farm where the eggs were laid.

  Vital Farms is one of the largest certified B Corps in the food industry, which requires meeting social and environmental performance standards.

      The commitment to small farms and pasture-raised hens is part of Vital’s  marketing strategy. As a growing swath of Americans put more focus on how their food is sourced, specialty eggs become more attractive and justify their premium prices.

Specialty eggs can be a profit center for retailers, becoming more valuable than commodity eggs which are often sold at a discount to drive foot traffic. 

The rapid growth in demand for Vital Farms eggs has created a new revenue stream for hundreds of small family farms. Pace has broken ground on his second barn

Tanner Pace, Pace Valley Farms “You know, whenever we first started with Vital, they ran on happy hens. And at first I thought, yeah, okay. But truthfully, seeing them out here, scratching in the pasture, you know, just living where they naturally want to live is, is pretty, pretty satisfying.”

For Market to Market, I’m Peter Tubbs