“This is only the fourth time in five decades that production has gone down,” said Bill Roenigk, senior vice president and chief economist for the National Chicken Council. We are finding that 2011 was one of the worst financial years in the industry’s history.”
Roenigk explained that a dearth of corn for feed and higher prices for the supply that is available are resulting in a 6% reduction in the number of hens this year.
“October of 2010 was a good time for the industry and we were gearing up to produce more chicken for 2011,” Roenigk said. “Then the USDA said that there was not as much corn as anticipated so prices went up.”
This year, the USDA projects that chicken production in 2012 will be down another 3%, although “realistically, I believe that it could drop as much as 4%.”
But convenience store retailers, such as Pam Evans of Workman Oil’s Apple Markets and Chris Carter of Shout and Sack, are still projecting growth for their chicken sales for 2012.
“Apple Markets is well known for our fresh fried chicken and, if we base our sales year to date, I feel we will see growth in this category,” said Evans, foodservice director for Apple Markets, which has 47 locations in central and southwest Virginia and eastern Kentucky. “Even if poultry prices rise, it will not affect our overall chicken sales.”
In fact, the stores have expanded their traditional fried and baked offerings to large chicken tenders and chicken sticks, which “have proven to be a huge success for us,” Evans said.
Business Still Booming
Chris Carter, owner of Vinita, Okla.-based Shout and Sack, said that even if he has to raise prices “a little,” he will continue to build his chicken business.
“We’re seeing a lot of our growth from white meat, popcorn chicken and strips,” he said.
Bone-in and boneless wing sales are also expected to continue to soar this year, Roenigk said. “If operators see bone-in wing prices rising higher than they want to pay, boneless, actually breast meat marinated to taste like spicy wings, cost less—a good way to help them manage food costs,” he suggested.
Approximately 15-20% of wings sold are boneless, especially by quick-service restaurants that focus on wings, Roenigk said.
Customize Your Menu
Whether it’s sandwiches, tenders, wings, fried, breaded or sliced, customers have affordable options which can offer them a new experience during each trip to the convenience store. Equally important for operators is that chicken’s reach extends across all three dayparts, which further enhances menu flexibility.
A Technomic survey revealed that consumers are eating chicken more frequently than any other type of meat, but they still want a wider variety of menu options. Those interviewed suggested that opportunities exist for new items, especially for the breakfast daypart. More than 25% of those taking part in the survey said they would very likely order chicken breakfast sandwiches at retail establishments if they found them on menus. Surprisingly, the figures were even higher when it came to turkey, with 29% responding that they would most likely order breakfast sandwiches or burritos featuring turkey.