Chicken sandwiches remain the star of inflation-era menu

AP
AP

Summary

  • Despite rising poultry prices, stores are betting millions of dollars in research and advertising on the meal

Whatever you come in hoping to eat, restaurants want it to be chicken.

Big chains are advertising it, cooking up new flavors and pushing poultry hard at the register in these inflationary times. Restaurant owners say they can often make more profit per order on white meat than beef. And consumers are still buying up crispy chicken sandwiches, industry data show.

Panera Bread, Popeyes Louisiana Kitchen and other chains have added new chicken sandwiches to their menus in recent months to attract consumers. KFC, Wendy’s Co. and Burger King have each spent tens of millions of dollars advertising their chicken sandwiches on national television this year, according to ad-measurement firm iSpot.tv Inc. McDonald’s Corp. and other chain executives have pointed to poultry items as a means to boost sales among U.S. consumers.

Panera Chief Executive Niren Chaudhary said introducing the chain’s first chicken-breast sandwiches in March helped attract more men looking for a substantial meal than the company has traditionally attracted, and the items are now the chain’s most popular sandwiches.

“The chicken-sandwich category is very crowded but there was room, definitely," Mr. Chaudhary said.

Big U.S. fast-food chains charged between roughly $1 and $7 for breaded chicken sandwiches earlier this year, according to market-research firm NPD Group.

Carolina Gomez, a 22-year-old salon receptionist from San Antonio, said she eats chicken sandwiches more than burgers, pizza or other types of fast food because she likes the variety of flavors and quality of options. Ms. Gomez says she buys one from McDonald’s when she is trying to save money and opts for sandwiches from independent restaurants when she is looking for something different. She fell for Popeyes after its spicy sandwich debut in 2019.

“Chicken sandwiches can cater to almost everyone," she said.

U.S. consumers spent $2.4 billion on breaded chicken sandwiches in the June quarter, according to NPD. The research firm said fast-food chains dished up 678 million chicken-sandwich servings during the period, up 3% from the previous three months.

Industry-research firm Technomic Inc. said 138 restaurant companies and convenience stores introduced chicken-sandwich specials in the first half of this year, while 111 chains rolled out specialty-burger promotions.

Some chicken suppliers are benefiting as a result, reporting rising profit margins for the first half of this year. Despite boneless, skinless breast-meat prices nearly tripling since the start of 2021, demand from restaurants has stayed hot in recent months. Pilgrim’s Pride Corp., the second-largest poultry company by volume, said last week that the appetite for chicken helped it post a $643 million profit for the first six months of this year, compared with a $66 million loss the same period a year earlier.

Investors and Wall Street analysts are bullish on continued demand for chicken. Shares of Pilgrim’s Pride are up more than 40% over the past 12 months.

Labor shortages in meat plants and continued problems hatching chicks among top poultry companies have constrained chicken supplies, pushing prices higher, according to executives and analysts.

“The chicken-sandwich wars continue to drive demand," said Diana Souder, a spokeswoman for poultry processor Perdue Farms Inc. During periods of high inflation, consumers often trade down to chicken from pricier meat options, including beef, she added.

After recovering from the economic shock of the Covid-19 pandemic, restaurants have been bringing more requests to processors to help develop chicken-sandwich ideas, said David Bray, head of poultry at Tyson Foods Inc., the largest U.S. chicken supplier.

For example, poultry processors might develop a spicier sandwich or tweak the appearance so customers can see the flakes of pepper in the breading to stand out, some industry officials say.

Some chains are discovering that merely offering a chicken-sandwich option doesn’t guarantee success.

Starbucks Corp. stopped selling a new breakfast chicken sandwich over quality concerns roughly a week after the item made its national debut. Some baristas said the middle of the sandwich was cold even after the fully cooked product was heated up, resulting in complaints. The company told employees in a notice in July to throw out existing sandwiches and warned that restaurants would have temporary shortages of new ones. The company voluntarily decided to yank the sandwiches and the quality concerns wouldn’t have led to foodborne illness, Starbucks said.

Burger King executives hoped a hand-breaded chicken sandwich introduced last year would help attract higher-income customers, but some franchisees said the new offering, called the Ch’King, hadn’t generated much more sales than the chain’s existing chicken sandwich—and was laborious to make. The company has since put its entire chicken menu under review, said José Cil, chief executive of Burger King parent Restaurant Brands International Inc.

Restaurants also are testing their customers’ love for their chicken sandwiches as they raise prices for them. Big chain fast-food restaurants increased the prices of breaded chicken-sandwich items by 5% on average in June versus the same month a year earlier, according to NPD Group.

Popeyes bumped up the price of its sandwich to $4.49 from $3.99 this year, though the company said it remained one of the lowest-priced options on the market. Chicken costs have risen for the chain and hit a 20-year high earlier this year, said Popeyes President Sami Siddiqui.

“It is the No. 1 topic on all of our franchisees’ minds right now," he said.

This story has been published from a wire agency feed without modifications to the text

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