Responding to higher beef prices and the projected growth of the poultry industry, many quick-service restaurants are adding more chicken dishes to their menus, creating an entirely new sense of competition for fast-food diners.
Barry Barnett, Church’s Chicken senior vice president in charge of global supply chain and purchasing, said the lines that define the categories of quick-service restaurants are becoming more blurred as beef supplies tighten. His comments were made at the International Production and Processing Expo on January 30 in Atlanta.
While Barnett said this is news that is welcomed by the poultry industry, he added that it poses challenges for companies like his, which is the world’s third-largest fast-food chicken chain. He cited a troubling economic forecast that predicted a 2.2 percent decline forecast for chicken restaurants. Part of that anticipated drop can be attributed to people dining away from home less as their disposable income decreases. However, he also said increased competition from eateries best known for hamburgers is also something that cannot be ignored.
Before the beef industry started experiencing reduction in herd sizes and subsequent economic struggles, Barnett said there were two distinctly different categories of fast-food establishments. There was the traditional chicken quick-service restaurant category, which included Church’s, KFC, Zaxby’s, Chick-fil-A, Louisiana Kitchen and Bojangle’s. At the same time, there was the burger quick-service restaurant category, which included McDonald’s, Wendy’s, Hardee’s, Carl’s Jr., Jack in the Box, and Barnett’s former employer, Burger King.
“Now what we are seeing is a new blended chicken category,” said Barnett, a 30-year veteran of the restaurant business. “As commodity prices continue to rise for feed products, beef prices continue to rise. It’s forcing a lot of chains like McDonalds and certainly Burger King to create and develop new chicken-based products.” Both introduced new lines of chicken products to their menus in 2012.
While the establishments once known best for their beef products are re-inventing themselves, the traditional chicken restaurants are feeling the urge to do the same. Church’s, which also operates the chain known as Texas Chicken in overseas markets, is in the middle of an image makeover, updating the appearance of many of its restaurants. But it is also modifying its menu. Once anchored by the strength of its bone-in chicken, Church’s is now introducing new products that include chicken tenders, chicken bites and tender crunches. Those new entrees are a key component to the continued success of Church’s Chicken, Barnett said.
“We have to continue to innovate in terms of new product offerings, and really try to understand what the consumer expectations are. As consumers frequent our restaurant or others, they are always continuing to search out and find new menu items,” Barnett said.
That mentality is particularly relevant to Church’s. In most cases, it is just as easy for a customer to eat at one of the new “blended chicken” restaurants as it is to go to Church’s. Eighty-five percent of Church’s restaurants are within a close proximity to a McDonalds, 63 percent are near a Burger King, 61 percent of its locations are near a KFC, and 54 percent are close to a Wendy’s and a Taco Bell.
Church’s Chicken is in its 60th year of business. Church’s Chicken and Texas Chicken restaurants are located in 21 countries, with a heavy concentration in the southern United States, as well as Asian, Middle Eastern and former Soviet countries.