Kipster – how have they cracked it?

Supermarket chain Lidl has been selling Kipster's "climate neutral" eggs in the Netherlands since last month. Soon rooster burgers will also be available. According to Kipster they have the most animal, farmer and environmentally friendly chicken farm in the world. How have they cracked it?

The idea for Kipster (“kip” means chicken, and “ster” means star in Dutch) was hatched when sustainable entrepreneur Maurits Groen and poultry expert and university lecturer, Ruud Zanders met. Groen has been the driving force behind a number of sustainable initiatives and coalitions, including producing the Dutch version of Al Gore’s book and film An Inconvenient Truth. The two began to philosophize about what the most animal, farmer and environmentally friendly chicken farm could potentially look like. Driven by the question of how to feed the growing world population in an honest way, without endangering human, nature or animals. Together with farmer, Styn Claessens and media strategist, Olivier Wegloop, they laid their plans. And so Kipster was born: a climate-neutral poultry company located in Venray, the Netherlands. The response has been egg-cellent. We spoke to Maurits Groen to find out more.

How did you manage to set up such an innovative company in four years in a shrinking sector?
Groen: "Because the founders all came from different disciplines, we could look at the sector with different eyes. We ignored the iron-clad law that says 'everything is about the lowest cost'. This comes not only at the expense of animal welfare and the environment, but also the farmers’ margins."

What was the most important hurdle that you had to overcome to get this company started?
Groen: “The financing. We circumvented the traditional roads by signing a contract with Lidl's management in the Netherlands. They are our exclusive sales channel and buy all our eggs and roosters. Thanks to this contract we received credit from the bank."

Why Lidl?
Groen: "They are a discounter that sells their own brands. Their assortment is limited - they don't stock 30 types of egg - so the offering is clear. That's why we can tell our story about offering "the best egg."

Your eggs are neither organic nor free-range, but do have the highest attainable quality seal from the Dutch Animal Protection. How is this possible?
Groen: " There are a few other important aspects than just the nature of the feed and whether there is enough space per chicken. Kipster tries to do everything as best as possible: being animal-friendly, having the lowest footprint and lowest emissions. We ensure the chickens have good living conditions, we do not gas the baby roosters when they hatch and we generate more energy than we need ourselves. In addition, we feed our chickens with residual flows from bakeries and agriculture, so we do not need agricultural land to produce the feed and we immediately prevent waste. Our packaging is as environmentally friendly as possible, and we run an education and meeting centre."

You sell your eggs at a cost price that is 5 euro-cents lower than an organic egg at Lidl. How is this possible?
Groen: "Because we started from scratch, we could first outline our ideals and then organize everything as efficiently as possible and generate other revenue, based upon these. By using a clever combination of techniques and by always weighing up whether something makes sense or not, we manage to keep our eggs relatively cheap.
Lidl's five-year sales guarantee also plays an important role. Because of this deal, we have a proportionally lower risk and do not have to deal with brokering."

Most poultry farms gas the rooster chicks because they cannot earn money from them. How do you do this differently?
"We raise the rooster and sell the meat in the form of rooster burgers. This takes about 120 days, whereas the standard for meat chickens is 42 days. Lidl has also committed themselves to selling these. In doing so, they have stuck their neck out, but also score. Animal rights activists in the Netherlands who are usually very critical about the meat in the supermarkets now praise Lidl because of Kipster."

Is Lidl your only sales channel?
"We have now started with one farm of 24,000 chickens, producing about 8 million eggs annually. We want to grow further and sell more eggs and roosters. This can be done via Lidl in the Netherlands, but also abroad; Lidl is the largest supermarket chain in Europe. Besides retail, we are considering other sales opportunities such as manufacturers of sauces and ice cream, catering or gastronomy."

What is your further growth ambition?
"Growth is not a goal, but if you want to have as much impact as possible, you need volume. We want to get rid of the poultry system in which a 'race to the bottom' seems to be a law of nature. We are proving that consumers can buy eggs that are not only better for the chickens and the environment, but also for the position of farmers."

You do not just change a system just like that, everything is based on a certain way of thinking and working…
"Indeed, it is only possible step by step. You have to deal with livestock and long-term investments. In the Netherlands you can only start a new chicken farm if poultry rights are available. The switch from cage to free-range and free-range eggs took several years in our country."

Have you had interest from abroad?
"Yes, a lot. Kipster is particularly attractive in countries where little attention is currently paid to animal welfare, while the consumer wants alternatives. An example is the United States, where they still have battery-cage eggs. We are also talking to an American supermarket chain."

Are you not afraid that Kipster's concept will be copied by others?
“No. Actually that would be fantastic. We would like this to be the new way of producing eggs.”

Why is Kipster farmer-friendly?

This is a good question to ask Kipster’s farmer Styn Claessens. He learned all about poultry through his family’s free-range farm and knows what the sector’s pressure points are. Claessens: "Kipster is good for farmers in that we do not look at the lowest possible cost price, but at an honest, minimal yield. We work according to a fair deal with Lidl, where we are open about our business case. We do not have to wait for orders, but can simply deliver. As a result, we are less at the mercy of the vagaries of the market and the feed prices. Feed prices have a major impact on the margin in our sector. We have agreed with Lidl that we will compensate each other, within a certain band-width, if feed prices are higher or lower than expected. We will probably also be less dependent on fluctuations by working with alternative feed. We are now slowly switching to residual streams from bakeries, such as bread and rice cakes. We have to figure out what works and what does not work. There are no examples that we can follow. But pioneering is exactly what makes the farming profession fun. Especially if you know that it is also good for the environment, people and yourself."