Menu spotlight shifts to chicken as beef prices rise

May 23, 2012 | by Alicia Kelso

Foodservice market research firm Mintel has released new research that shows a resurgence of chicken items on restaurant menus. Chicken may be benefitting from the beef industry's rising prices, mad cow disease reports in California and bad press over "pink slime."

"In addition to the recent health-related issues surrounding beef, and the already high beef prices, we expect restaurants to start focusing their attention on other proteins," said Kathy Hayden, foodservice analyst at Mintel. "Steakhouses have been struggling in this rough economy and have tried to compensate by offering smaller cuts or more 'surf and turf' options. But ultimately, chicken menu innovation is giving restaurant-goers a fresh and less expensive option while dining out."

New data from Mintel Menu Insights shows the number of U.S. menu items with poultry as an ingredient has climbed an average of 12 percent in the past three years and is expected to continue to increase in the next one to two years. The greatest growth has come from the casual dining segment followed by fast casual establishments.

Rising beef prices a culprit

Mintel's data comes just days after Bloomberg reported that a shrinking beef supply has led to record prices.

The shrinking supply is mostly the result of drought-ravaged Texas, the biggest cattle-producing state. Recent farm losses have totaled more than $7.5 billion in the Lone Star State, which is predicted to reduce the U.S. beef output by more than 25 billion pounds this year, the lowest since 2005.

Additionally, the USDA predicts U.S. beef production to fall another 2.5 percent in 2013.

This trend has translated into rising costs for consumers at grocery stores and restaurants. Bloomberg reports that consumers will pay nearly 5 percent more for beef products this year.

And while some restaurants will pass these pricing hikes onto their guests, others are moving non-beef proteins into the spotlight.

For example, during McDonald's fourth quarter earnings call in January, CFO Pete Bensen said the company expects food costs to rise 4.5 to 5.5 percent this year. In 2011, the company experienced a 4.9 percent increase in costs, mostly due to the staggering rise in beef prices. In response, the company shifted promotional focus to chicken offerings and returned the McRib (pork) to the menu for a limited time.

Recent QSR chicken launches support predictions

According to Mintel's research, chicken fingers have experienced a 10 percent jump on menus from the first quarter of 2009 to the same period this year, mostly in the QSR space.

Buffalo wings have shown a 19 percent increase in the same timeframe, and menu mentions of chicken wraps are up by 35 percent.

"Chicken is a versatile ingredient," she said. "In the future, you can expect to see it used in more ways, from pulled chicken sandwiches and bowls to more home-styled meals, like pot pies and stews."

Coincidentally, chicken staple KFC is pushing pot pies in its latest marketing campaign. The protein has also taken center stage in the snacking daypart. For example, McDonald's Chicken McBites were launched in January, followed by Whataburger's Whatachick'n Bites and Burger King's Crispy Chicken Strips. Burger King also has unveiled new chicken wraps, available in honey mustard or ranch flavors.

Additionally, Wendy's recently launched its Spicy Guacamole Chicken Club, Jack in the Box introduced a new Chipotle Chicken Club Sandwich and Subway is currently campaigning for its Smokehouse BBQ Chicken Sub.

Chicken pizza toppings on the rise

Pizza also is jumping in on the trend, with a 26 percent increase of chicken as a pizza topping. Hayden expects the presence of chicken to continue expanding on restaurant menus across segments.

Papa John's rolled out a Buffalo Chicken Pizza in March. Jet's Pizza, Hunt Brothers, Snappy Tomato Pizza and Pizza 73 also recently introduced Buffalo chicken-topped pies.

Domino's and Papa Gino's include chicken in their artisan and specialty lines, respectively. And, earlier this week, the Pie Five Pizza Co. introduced a new Sweet Thai Pie, with sweet chili sauce (instead of marinara sauce), basil, diced chicken and a pepper medley 

Of course, with everything in the volatile commodities world, chicken isn't exempt from rising prices. A USDA Agricultural Projections report released in February suggested poultry prices will rise this year, but should stabilize in 2013.

Read more about supply chain news.

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Topics: Equipment & Supplies , Food & Beverage , Marketing / Branding / Promotion , Operations Management , Pizza Toppings , Trends / Statistics

Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine.
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