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Fast-food giant Popeyes has been stashing chicken for months amid a nationwide shortage and price hikes — to ensure it has a healthy reserve of poultry ahead of the debut of its new nuggets later this month.
The Miami-based chain, which is owned by Restaurant Brands International, has been building its reserve of frozen chicken for over six months ahead of the rollout of its new nuggets on July 27, Popeyes Americas President Sami Siddiqui said in an interview with Fortune.
“Demand is very high right now, and consumer spending is surging” as the country emerges from the pandemic, Siddiqui told the news site. “We’re planning appropriately.”
“We work really closely with our suppliers,” he added. “Supply chains are ramping up.”
The strategy is a major split with the norms of the industry, which prefers to keep inventory lean in normal times. It also shows how companies are trying to protect their supply of chicken during the Great Poultry Crisis of 2021 that’s seen prices soaring and restaurants pull items off their menus.
Executives from various fast-food joints have explained that a meat-processing slowdown last year caused by pandemic safety measures along with a surge in demand for recently debuted fried chicken sandwiches are largely behind the shortage.
Popeyes, which is owned by Restaurant Brands International, sparked the so-called chicken sandwich wars in 2019 with a $3.99 sandwich that was so popular it sold out at many restaurants. That prompted other chains to seek to compete, including burger joints like McDonald’s, Burger King and Wendy’s.
Executives at Tyson Foods, one of the world’s largest producers of poultry and other meats, have also blamed the shortage of chicken on underperforming roosters that aren’t producing as many chicks as expected.
The national labor shortage has also hampered meat processors’ abilities to meet demand.
The National Chicken Council, a trade association based in DC, has resisted calling the situation a shortage, though they’ve acknowledged tightness throughout the supply chain due to a variety of factors.
With supply limited, prices are soaring.
Chicken prices for producers jumped 2.1 percent to an all-time high in May, marking the eighth straight monthly increase.
Companies are searching for ways to reduce their chicken costs.
Wingstop, for example, announced last month that it’s launching a virtual brand called “Thighstop” in a bid to get customers to order crispy chicken thighs instead of the traditional wings, which have seen a particularly strong surge in demand and price during the pandemic.
Wingstop chairman and CEO Charlie Morrison said at the time that the wholesale price of a pound of wings has risen from 98 cents a year ago to $3.22 today.
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