Chicken sales at Taco Bell are up 50% over the past two years. | Photo courtesy of Taco Bell.
Wendy’s had a difficult second quarter, like much of the rest of the fast-food business. And, like much of the rest of the fast-food business, it is turning to chicken in a bid to save its sales.
Specifically, the Dublin, Ohio-based chain this week started selling a “Meal of Misfortune,” in collaboration with the Netflix program Wednesday and anchored by the chain’s chicken nuggets and featuring sauces, a Raven’s Blood Dark Cherry Frosty Swirl and themed packaging. And later in the summer it is planning to launch chicken tenders with a selection of six new sauces.
“It’s a very fast-growing protein within QSR,” Interim CEO Ken Cook told analysts. “And we really like how our product stacks up to the competition.”
Major chains, eager to generate consumer interest while protecting profits, are adding more chicken to their menus. The number of chicken items on quick-service menus has risen 2.5% over the past year, according to data from Restaurant Business sister company Technomic.
Just about everybody is doing it, including some of the largest chains in the country. Taco Bell, for instance, reintroduced Chicken Nuggets and introduced a Crispy Chicken Taco and Crispy Chicken Burrito. Chicken sales are up 50% over the past two years and the chain is hardly about to stop. Next year it plans to make Crispy Chicken a permanent menu item.
McDonald’s started selling McCrispy Strips in June. | Photo courtesy of McDonald’s.
McDonald’s in June introduced McCrispy Strips and then Snack Wraps. It has been preaching the gospel of chicken for years.
There are two reasons for this. First, chicken sells. Sales at limited-service chicken chains last year soared nearly 9% last year, according to Technomic. Fast-casual chicken chain sales rose 24%. None of that counts the growing sales of chicken at major fast-food burger chains like McDonald’s.
Whenever brands see results like that, they flock to the idea like moths to a lit fast-food sign. Which is why all these brands are also going after beverages. No idea is too good not to be copied over and over again.
Meanwhile, beef costs are soaring amid tight supplies of cattle and steady demand. At Burger King, for instance, beef prices were up in the “high teens year over year,” driving a mid-single-digit increase in commodity costs at the chain. That kind of inflation tends to encourage brands to look elsewhere, and chicken is not as expensive.
“It’s been a very interesting dynamic the last six months or so,” Patrick Doyle, executive chairman of Burger King owner Restaurant Brands International (RBI), told analysts last week. “With beef prices up, you’ve seen a lot of people running chicken promotions. Chicken is kind-of having a moment.”
The rush of companies into the chicken business could be putting some existing chicken chains on their heels. Same-store sales at KFC U.S. declined 5% last quarter. Popeyes’ same-store sales declined 0.9%. Wingstop just recorded its first negative quarter in three years. El Pollo Loco, however, generated 1.5% same-store sales growth, though pricing had more to do with that than traffic, which fell.
Doyle hinted on the RBI call that two privately-held chicken chains are seeing some same-store sales pressure. One of those is almost assuredly Chick-fil-A, which dealt with the first true sales pressure at existing stores in its modern history last year.
“The reality is that while people tend to look at things within the burger chains and the chicken chains and the pizza chains, there is a lot of competition amongst all of them for share of wallet from consumers,” Doyle said. “The people who are focused on chicken have been feeling everybody else play in that space.”
Yet even some of the existing chicken players are getting into the act. KFC, which has struggled in the U.S. for years, is testing a new concept called Saucy that specializes in chicken tenders and sauces.
The big question is whether all these chains can effectively sell all this chicken. Despite all this chicken on menus, same-store sales in the fast-food business have been weak all year. And with so many new items, consumers’ expectations have grown, so if a brand is going to add a new one to its menu, that chicken had better be good.
