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Eggheads is the go-to podcast for egg industry professionals who are interested in leadership and innovation in the egg world. Host Greg Schonefeld explores the evolving world of modern egg farming, from the latest in cage-free innovations and organic certifications to navigating the economics of large-scale production. Whether you're an egg producer, supplier, or involved in poultry genetics, this show provides the insights and expert discussions you need to thrive in the industry. Crack open the science, strategies, and stories behind the egg industry’s biggest challenges and opportunities.
Silvin Faulstic...: Our mission really is to end chick culling globally, and that might sound very bold and it is a little bit also how we started, but the way things developed right now, we realize it wasn't stupid back then actually, and we are able to follow through with it.
Greg Shonefeld: Hi, there. Welcome back to Eggheads. I'm your host, Greg Shonefeld. What does it take to revolutionize an industry while addressing one of its most deeply ingrained ethical challenges? Last year in a conversation with Robert Jahman, we explored the science and promise of in-ovo sexing. Today we're taking that conversation a step further to understand how this technology is not only developed but scaled to meet the demands of a global industry.
Silvin Faulstic...: So I'm Silvin Faulstich. I'm business development manager for Respeggt Group, trying to help ending chick culling globally.
Greg Shonefeld: Silvin brings a unique perspective from inside the effort to end chick culling worldwide, balancing the technical, economic and cultural challenges that come with driving change in a deeply established system. Respeggt Group is working to make innovation not just possible, but practical. They can also appreciate a good egg pun. Can't we all?
Silvin Faulstic...: Probably everybody who works in the egg industry is pretty familiar with all the puns intended with the eggs and...
Greg Shonefeld: Oh yeah, we love them over here.
Silvin Faulstic...: It seems there is no limit to it, right?
Greg Shonefeld: We explore the evolution of in-ovo sexing technology, what it takes to implement it in large scale hatcheries, and how Respeggt Group is tackling the challenge of educating consumers and building global partnerships. Silvin's path to Respeggt took some unexpected turns. Starting in IT, he later reconnected with his roots in the food industry drawn to the sense of purpose he once felt in agriculture as well as the opportunity to tackle big challenges. Since joining Respeggt in 2019, he's played a key role in scaling their mission globally. So in 2019 you're getting that call and you're outside the industry At that time, were you familiar with the issue of chick culling at that time and what in-ovo sexing was when you first started that conversation?
Silvin Faulstic...: Yes and no. Probably to the extent that everybody else in Germany, maybe in Europe was familiar with. I had a basic understanding that there might be an issue, but obviously I was completely unaware of how complex egg supply chains, how diverse the egg industry is and what it would actually mean in technical terms and also economically, what the extent of the issue. So I had to learn a lot also, but I realized that's a nice thing to take on a nice topic and that's why the decision was kind of easy to make.
Greg Shonefeld: Silvin first approached the issue of chick culling with only a basic understanding of its complexity. Respeggt began as a research at the University of Leipzig and quickly evolved into a company offering innovative in-ovo sexing solutions.
Silvin Faulstic...: We wanted to create a framework that is kind of let's say the highway for different technologies and we wanted to build the basis for it so everybody can put their vehicle on this highway. Respeggt was founded as a kind of in-ovo sexing provider for in-ovo sexing technologies, all that were available at that time. We also brought this promise, this consumer guarantee that if in-ovo sexing is being done, that the consumer can trust in the process that we respect the animal welfare for the chickens. So that's why we jumped from the technological view, let's say more into an overall view on the topic and respecting animal welfare and the fate of the male chicks.
Greg Shonefeld: So I mean the idea there was really, it was formed to tackle this issue of chick culling and in-ovo sexing that I guess that was kind of the immediate vision of the company.
Silvin Faulstic...: That's absolutely correct, yes, that our mission really is to end chick culling globally, and that might sound very bold and it is a little bit also how we started, but the way things develop right now, we realize it wasn't stupid back then actually, and we are able to follow through with it. But yeah, that's the main purpose of our business. But over time, obviously we also needed to adjust for making it economically viable. So a mission and an ideal doesn't work if you cannot implement it in an economically viable way, and that's what we've been working on and what we've achieved over the last years as well.
Greg Shonefeld: And I understand Germany was the first country to ban chick culling. That took place in beginning of 2022. Was there already kind of a movement in Germany by that time? Do you know what the environment was like in these years kind of leading up? I mean you guys were kind of ready with the technology when this ban went in place, but you had to start before then. How did someone know to do that?
Silvin Faulstic...: So our founder of the company, he saw the methodology let's say at University of Leipzig and he realized, well, that is something that can actually solve an issue, which is not very popular yet. But for some reason this issue was brought up in media and in the public discussion, more and more killing male chicks or killing day-old male chicks is done because the male chicks don't have any economic value to the industry. But according to German animal welfare law, you are not allowed to kill any living creature, let's say, just because a lack of economic purpose. So that ended up in a lawsuit and it was being decided that it's actually correct and therefore, that male chick-hulling is against German animal welfare law. But back then there was no market ready or economically viable. There were a lot of research in it. So this is how everything kind of came together.
Greg Shonefeld: So Respeggt became market ready in 2019, helping demonstrate the in-ovo sexing could work both technically and economically. This progress contributed to the 2022 ban on chick culling in Germany, which provided critical support, but also introduced challenges as legislation and industry practices didn't always align.
Silvin Faulstic...: So the first challenge we probably had was scaling it up and bringing it up to speed so it would work in an actual hatchery environment. Looking at Germany or Europe alone, we have different sizes and volumes of tail chicks being hatched in European hatcheries looking at the US, it multiplies by a factor of 10. So speed and throughput, obviously it was a challenge and on a university level, if you have a theory and you test it and you realize it works, but then bringing it into a stage or a status where it works fast and accurate, and reliably over time, those were our challenges we started with. So I listened to the podcast episode where you talked to Robert Jahman and he also showed all the different technologies and there's basically two ones image based and liquid based, and we are one of the liquid based, and when we started, we were taking a sample from the inside of the egg using a needle.
So we don't do this anymore, and that is one of the major learnings. Opening the egg and going inside is actually very bad idea because yeah, it might contaminate the inner of the egg. So it wasn't necessary to realize that the methodology works, but the next step was right away to eliminate the needle and not touching the inner of the egg anymore, which today we don't have any contact with the inner of the egg anymore. Yes, we open the egg shell, but there's nothing touching the inner of the egg anymore. So that was one thing.
Greg Shonefeld: So basically you're able to extract the liquid that you need without penetrating the egg.
Silvin Faulstic...: It depends how you would define penetrate. So we use a high precision laser and the laser burns a small, tiny hole into the egg shell. Yes, we do open the egg shell to access the allantoic liquid. That is simply necessary if you use a liquid based technology, but the hole is 0.01 inch in diameter, so it's a very tiny hole and the heat of the laser disinfects the edges and the X stays open for about 10 to 12 seconds while we take the sample and then it is being sealed.
But you ask about the challenges, sealing the egg was one of the learnings we had. Yeah, we have to seal it because that would improve hatchability, that ultimately what we needed to achieve is adding this technology into existing egg supply chains without disrupting the process too much or basically at all. So we needed to keep up hatchability rates. Obviously there can be no contamination. It needs to be accurate and it needs to fast. So those were all the steps along the way, which we first implemented and then fine-tuned. And which brings us to where we are today with being one of the most accurate technologies and also the earliest.
Greg Shonefeld: Yeah, I understand you're accurate to a very high percentage. Can you share that?
Silvin Faulstic...: Absolutely. So when we started, we were looking at different percentages. So I think in 2019 we were already very well performing with about 2% error rates, but we've been able to bring that down to less than half a percent today. So today we have accuracy of 99.5%. So that's the beauty of using a liquid-based technology. We are using the allantoic liquid. And the allantoic liquid is kind of the keeper of the truth of the egg because it has DNA and DNA knows with a yes or no certainty, whether it's male or female, our job is to read it correctly. So that's why we decided to go for liquid-based and while we can achieve these high accuracies right now because it's just in there, we just need to read it correctly.
Greg Shonefeld: The other option is image-based. And while image-based technology offers higher throughput, it's limited to brown genetics, making it suitable for specific markets, but not universally applicable. So Respeggt chose to focus on liquid-based technology, which provided the accuracy and reliability needed to reach today's standards. This decision allowed them to refine their approach and achieve broader adoption across diverse markets. You guys just released a very new generation of your technology that kind of changes the process some. Can you go through that a little bit?
Silvin Faulstic...: So one of our challenges along the way were also to adjust for the needs of the industry. And you can imagine, it's quite a complex bit of technology and it needs to work reliably. So we had quite fast generation changes of our technology. So we first started with a needle, let's say we had a laser cabin opening, well first the needle, then the laser cabin, and that all was around for, I don't know, sometimes less than half a year. And we realized, okay, we need another approach to it. So some of our technological generations were around for one year and then we brought out the next one already.
Greg Shonefeld: You're like an iPhone.
Silvin Faulstic...: We're kind of in that development cycle. Yeah, correct. The current set of technology that we're using is the Respeggt [inaudible 00:11:33] and that is still around, but one of the learnings from the near path, let's say, is that we need a higher level of automation. So we do have a lot of automation already happening or going on on the device, but for hatcheries to adapt the technology and to make it as easy for them to use it is also very important automate the handling between the different stations. So our technology consists of the extracting the sample, running a PCR analysis and then sorting the X on that trace and all that needed to be automated.
That is just the feedback we got from many different corners from the industry. And so currently we have two sets in our portfolio, which is still the modular approach, which is just the three units being separately able to be used and to be placed in every hatchery layout. That's the beauty of it. It's very flexible. But we are about to release the completely integrated and automated setup, which will be available in a couple of months because that is what hatcheries need. They just need to have it all running, just put in a tray of X, having it done everything by itself, and you take out a completely female tray of X and put them back into the incubator.
Greg Shonefeld: So if I'm understanding correctly, the original tech is, it's around this extraction process, which as you talked about before, that evolved from say, penetrating an egg with a physical object to a laser extraction method. Well now what you're doing is almost establishing a production line that's all automated with that extraction one point in the line.
Silvin Faulstic...: Exactly.
Greg Shonefeld: And so basically you can put a tray of eggs that you don't know the sexing of that tray of eggs and it comes out the other end split out between male and female.
Silvin Faulstic...: Exactly. That is the ultimate goal and that is our current development pipeline, let's say.
Greg Shonefeld: Okay.
Silvin Faulstic...: I don't know if that fits it, but maybe I can draft a little bit the process just generally. Sure.
Greg Shonefeld: Yeah.
Silvin Faulstic...: So what we do is for the liquid based analysis, you need to harvest a little sample of allantoic liquid, allantoic fluid. The allantoic bubble, let's say expands around the day nine, 10, 11. So it starts to be able to be harvested on day eight of incubation until day 12, let's say. Then it grows back or it shrinks again. So this is our operating window. So what we need to do is we take out the eggs from the incubator around day nine, can be done between days eight and day 12. We put them into our sampling machine, which is the [inaudible 00:14:09].
We open the eggshell with the laser, we suck out the liquid sample using under pressure and suction pipetting. We take out the sample, we close the hole again, then we have the sample now. We collect all the samples in the sample well plates. We run a PCR analysis on them, and as soon as we have the results, these results are automatically transferred to the sorting robot where now the trays are being transferred to, and the sorting robot now makes out of the original mixed trays of female-only trays. So this is the process, how it works.
Greg Shonefeld: Wow.
Silvin Faulstic...: Exactly. So like you said, yeah, we are transforming this into just one tray input. Everything happens in line, the technology remains the same, but outcomes are completely female tray at the end.
Greg Shonefeld: Silvin just articulated a very complicated process in less than 60 seconds, pretty good for an elevator pitch. What all that means is this, Respeggt technology has evolved from basic liquid extraction to a fully automated production line. Eggs are put on a tray and run through a conveyor with samples collected and traced to each egg, all while determining the sex of each egg with an incredible precision. By the end of the line, a tray of mixed eggs is sorted into female only trays ready to go back into the incubator. It's a seamless blend of precision engineering and innovative science, and frankly, really, really cool. So getting into the deal, you recently struck up with Hendrix, a large genetics company in the US. So was that level of automation, was that a key driver to being able to now establish this partnership? I mean, in other words, you said you were getting feedback from the hatcheries, man, we need these things automated. Was that kind of a big barrier to entry?
Silvin Faulstic...: Yes and no. It certainly helps having any party involved knowing in which direction we are steering. But the major advantage now for us is also that we can start with the set that's available with the modular setup, which is very flexible. A huge challenge in the US for basically most of the existing hatcheries really is the availability of space. So you cannot just go there and say, well, I want to have this bit of technology. Let's pour some concrete and just put it up there. Hatchery managers need to fit it in with the available space. Some are lucky and are maybe about to build a new hatchery or something, but usually you would need to fit it into existing structures.
So there it is really important to have technology that fits in there that is maybe also not all screwed together, but flexibly can be put into separate rooms throughout the hatchery layout, let's say. So that is really something that helps. And the tech basically is the same, the accuracy is the same, the reliability is the same, but having the outlook of being able to automate it in the near future certainly also helps operations in the US, which are essentially larger than in Europe to be willing to adopt this technology. Yes.
Greg Shonefeld: The adoption of in-ovo sexing technology faces unique challenges in the US compared to Europe where legislation has driven change coming into the US where the general public isn't highly aware of chick culling can be an additional challenge. But as Silvin notes, the absence of public awareness and regulations also offers an advantage that Germany didn't have. It allows the industry to adopt at its own pace. One key factor is the role of genetics companies is hatcheries can only work with the options provided to them. Respeggt's ability to support both brown and white egg markets covering specialty and commodity segments positions it well for faster adoption, transparency, and performance and data also has been crucial in gaining trust in building partnerships both in Europe and now in the US.
Silvin Faulstic...: It is kind of a blessing at this stage for the US not to have any legislation in place because the industry can adopt in a way that is best for the industry, and that is what we see happening right now. So no matter which country you look at, you always have a certain share of white and brown genetics. So that's an important aspect. And we see one of our competitors being in the US now, which is focusing on the brown genetics on brown eggs, which happens to be the specialty eggs in the US as well. But in the cooperation with Hendrix, obviously it is very important that our technology offers the opportunity to do all genetics, all colors, and to be suited to provide brown specialty egg market as well as the commodity egg market. And usually if we look at the speed, how fast technological advancements spill over from somewhere in Europe to the US, it takes 10 to 15 years sometimes. For in-ovo sexing, it really happens at a much faster rate.
And that might also be the reason for Hendrix to choose for technology that is not only able to do the specialty market segment, but also the commodity white X segment. As Hendrix has a very strong white genetic, which is seeing an increase in being used in many countries in the world, which for now tend to be a brown market, they slightly shift towards using more white genetics. So that is for sure one of the reasons, another reason to make it easy for hatcheries for any kind of operation to adopt new technology is to be honest and to be transparent on your performance parameters. And that is something we are also able to provide. We really provide an insight into what kind of performance do we actually yield in an operational productive environment in a hatchery in Europe. And that is ultimately also what in many cases or most cases, convinces our partners, our clients to adopt our technology because if we say 99.5% accuracy, we like to be able to achieve it in more than most of the time. So that's really our goal and we are able to provide data insights into that.
Greg Shonefeld: I understand that there is a cost associated with this. Maybe it's a couple cents more per egg or per dozen I guess by the end of it, but it is something that if the public knows when they're at the shelves and they're aware of the issue and they want to support this benefit, there'd be a lot of people here willing to pay that extra price. I guess what do you do in the meantime? Is there a way to know when you go to a grocery store, if this is an in-ovo sexed egg or one that participated in chip culling or not, will there be some method of knowing that in the short term?
Silvin Faulstic...: Well, thanks for that question, Greg. You're making it very easy for me to follow my note. Yeah, it's a very valid question and a very important question, especially given the very low share of people knowing about the issue, knowing about the structure in egg supply chains. And yes, there is a way of telling, there is a way of seeing whether eggs are in-ovo sexed or not. So for Germany, it's an easy one because we have a law now. So every egg basically needs to be either in-ovo sexed or the male needs to be raised. And retailers in Germany now use labeling to show this on the egg package. Although it is a law, the labeling is still around. And when we started in 2019, we didn't have a law, but we were one of the first, and we actually one of the only companies that have a label in place because we realized we need to educate consumers, we need to educate retail, we need to educate the entire supply chain basically on this issue, and that you can prevent it.
And by putting a label on the egg box, you tell that to the consumer and you give them a choice to decide for more animal welfare and to also fund it a little basically. Right? And we see similar things happening in the US right now. So I think the first eggs in the shelves will also be somehow recognizable by some kind of labeling on it. So that's important if you want to have consumers on board with this change along the way, scaling it up and making it economically viable. When it comes to cost, this needs to be acceptable for the entire supply chain. So what we think in our heads and what we create as complex technology cannot result in couples of dollars plus, let's say. That might have been an issue in the beginning, but that was also one of the challenges we had back then when we still have. Our goal is to bring costs down to the lowest possible level where it can be economically operated.
But we are at the point already, when you look at the point of sale as a consumer, it is already less than one cent per egg plus it is, especially with the highly specialized breeds you have today that lay very many eggs in their lifetime. So the cost really gets diluted and all the amount of eggs and can be easily recovered by just putting a small price premium on the egg package on the dozen of eggs in the egg shelves. So it is not even a prohibitive price anymore. And that's also the way it could eventually scale up to the commodity egg because cost has become so low that it is possible today.
Greg Shonefeld: This process doesn't rely on specific price increases to gain adoption. Instead, Respeggt focuses on hatcheries as their primary customer, letting them integrate the technology and determine how costs are passed along the supply chain. In Europe, for example, the added cost is less than a cent per egg, making it an accessible solution that aligns with existing market structures.
Silvin Faulstic...: The hatcheries are so well-connected, they know all the clients, all the, so we can leave the structure as it is, the market as it is, and we just add this opportunity, this technological solution to it, but all the rest can just run the same way it used to be. And that's important, especially if you put in new complex technology into a market, then it sometimes can scare off anyone because it looks so difficult to use. But our job is to make it as easy to use as if it would be a regular process. And I think we are on the right way there.
Greg Shonefeld: So then what's next?
Silvin Faulstic...: I want to be honest. So we were really much focusing on Germany first when we started this thing up, but then we realized, oh, well the issue doesn't stop at the German borders. And so the first step beyond Germany was basically the Netherlands. Well, the Netherlands are neighbors and there's a huge exporting market from the Netherlands to Germany. So it was kind of logic that technology would go there. The Netherlands want to provide the German market. There's also no legislation in the Netherlands. Another step which happened then quite fast was a Norwegian hatchery adopting our technology. So Norway is not so much exporting to Germany and also doesn't have a legal ban on chick culling, but they just realized, well, it is an issue we have in the industry and there's a solution available now, so why not use it? So that was the next step. And then we realized we need to extend our mission from ending chick culling in Germany to ending chick culling on a global scale. And that's when we kind of broadened our view over the big pond into the US and North America in general.
And if you look at the globe of egg production, there's very interesting individual market dynamics. I'm sure you're aware of that as well. So some countries don't see this as an issue and therefore it might not make sense to go there. Other countries are very alike in terms of how the industry is structured. So it would make obviously sense to go there and offer this solution. And I think Europe and the US are quite alike in this regard, at least not in terms of size, but when it comes to acceptance or interest in animal welfare, at least for certain parts of the population. So yeah, I mean there's a lot to do still in the US so we've just started and scaling up is a next step. So to be able to provide or to supply the entire US market. Well, we need to keep working a bit more still.
Greg Shonefeld: And what is the biggest barrier to scaling up?
Silvin Faulstic...: You really need to have everybody on board along the supply chain because the egg industry, it has been around for centuries, let's say. And the way it works today is, I mean, it just works. It runs like charms, putting up new technology or just going there and saying, "Well, I have a new machine, you should use it because it's nice." And then you really need to explain why. And you need to educate everybody along supply chain, and you need to make it simple for everybody. But simple is not only the actual use, it also needs to be simple in the understanding. So that is really an important job to educate everybody on it and show that it is easy and show that it has an advantage and an added value. But you can put a lot of technology in any given operation, you need to be able to have a return on it. And that's also why it is important to have consumers on board, to have retailers on board to realize the added value.
And that's why labeling is so important. So you can actually use this added value throughout the entire supply chain and getting also paid for it. It's like you said earlier, if you compare it to the iPhone, again, the iPhone is nice, but everybody needs a bit of time, at least after getting a new one, to get the hang of it and to fully understand, first of all, it looks nice and shiny and techy, but you don't really understand what it's doing. And then you need to actually use all the potential it has and realize how you best use it and how you can make the best use of it.
Greg Shonefeld: Yeah, that is a good analogy. Respeggt Group, the apple of the egg industry.
Silvin Faulstic...: It's a bit bold though, so I didn't intend for this comparison, but if you say it like that, I also don't mind.
Greg Shonefeld: No, but it was a good analogy. Good. And everything you said there makes sense kind of in this global mission to end chick culling worldwide and moving into the US obviously a big step and congratulations for that. And I imagine you'll just kind of continue that journey and choosing the next step that makes sense, one step at a time.
Silvin Faulstic...: Absolutely. Yeah.
Greg Shonefeld: Respeggt's technology is driving real progress in the egg industry, providing a scalable, cost-effective solution to end the practice of chick culling. It's a reminder that addressing ethical challenges can also align with practical and economic realities. It also highlights how the industry is evolving, not just through technological advancements, but through a growing recognition of consumer values and a willingness to adapt. Change isn't always easy, but it's clear that progress is happening. A big thank you to Silvin for us today. His expertise and ability to clearly lay out such a complex process is a testament to the important work Respeggt is doing.
It was awesome to hear how their technology has already advanced and evolved in a relatively short period of time. We appreciate Silvin's insights and look forward to seeing how Respeggt's mission continues to take shape. Make sure you follow Eggheads on Spotify or Apple Podcasts and connect with us on Instagram and LinkedIn too. If you want to be a guest or have topic ideas, please send us a message. Until next time, I'm Greg Shonefeld, and we'll talk to you soon. Well, one more question I have for you, Silvin, is, how do you like your eggs?
Silvin Faulstic...: Oh, I'm a very indecisive kind of guy sometimes, especially when it comes to eggs. So every Sunday morning I ask myself the same question, but I tried all of them and I have the poached eggs are my favorite right now.
Greg Shonefeld: Good.
Silvin Faulstic...: And also the most difficult to make.
Greg Shonefeld: Oh, yeah. Do you make them yourself?
Silvin Faulstic...: Yeah, I try to. Yeah. They turn out sometimes better, sometimes worse, but yeah, it's not impossible. But the runny yolk is really nice. If you have it on an avocado toast in the morning, that's very nice.
Greg Shonefeld: But if I ask you a few months from now, I might get a different answer, it sounds like.
Silvin Faulstic...: It could be that I'm back to hard-boiled. I don't know. Yeah.