Poultry Powers Food Sales

Versatility makes chicken one of the most popular segments in foodservice. Chicago-based market research firm Mintel International reported new menu items in convenience stores and QSRs in 2010 were chicken-based as these retail segments expanded to compete with supermarkets.chicken sandwich

Mintel’s QSR report noted that 43% of respondents said they wanted healthier menu options at restaurants and convenience stores. More recently, Mintel also said chicken salads sold through all types of restaurants increased 24% during 2007-10.
The message is clear—if QSRs and foodservice-minded c-stores want share of stomach regardless of the economy, they have to pay attention to better-for-you options. Chicken and salads, and the combination of the two, are top of mind when consumers think “healthy.” And according to the National Chicken Council, Americans consume more chicken than anyone else in the world—more than 85 pounds per capita.

Laying the Groundwork for Chicken
Workman Oil of Forest, Va., has tied its foodservice fortunes to chicken for 15 years. Of its 47 Apple Market stores in Kentucky and Virginia, 11 have a Granny Smith deli with a fresh chicken menu. The Granny Smith signature is fried chicken, and Pam Evans, foodservice director, said chicken accounts for 70% of deli sales. Baked chicken is an option for the health-conscious.

Evans reports an increase in sales despite the economy, and pretty good margin—65% gross profit on every-day low price retail and at least 55% on monthly specials. Stores use point-of-purchase signage on marquees, pumptoppers and store windows to advertise for monthly features.

Apple Market stores use Henny Penny pressure fryers and breading. Portion sizes have not changed, said Evans, and though prices have risen, monthly bundling efforts are geared to the value-minded customer. Deals can include two pieces of chicken—breast and either a leg, wing or thigh—with two sides (vegetable, potatoes, cold salad, etc.), a roll and a 32-ounce fountain drink or any size coffee or fresh-brewed ice tea for one price.  Another special is chicken, chips and a drink for a bundled price.

“On the monthly bundling programs, we will always make at least 50% gross profit, with 5% added for waste or 55% total gross profit,” said Evans. “We feel this will offer the everyday ‘Joe’ who is watching what he spends the most for his dollar, which always turns into a win-win for all.”

Chicken Posts Strong Sales Gains

The U.S. retail poultry market gained 31% during 2005-10, topping an estimated $41 billion in 2010, according to Mintel International. Chicken has a healthy halo compared to red meat, thanks to its lower fat content. Additionally, its low cost has made it more attractive to cost-cutting consumers in the past five years. Lastly, its flexibility as a food ingredient lends itself to many applications in meals and snacks.

In the past year, however, competition from value-based restaurant meals began cutting in on poultry sales, and  threatens to hurt market growth unless manufacturers can keep poultry consumers engaged with innovative recipes and convenient, ready-to-eat preparations.

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