- US-dollar broiler sales are up sharply, with relatively small declines in volume — sales for the 52 weeks ended July 10 totaled $14.5 billion, up 9.9% year over year
- Chicken is experiencing very high inflation combined with limited merchandising ability. That means consumers are looking for ways to save on chicken, too
- Organic is a “monster trend”, especially among millennials who are active buyers of organic chicken. Organic accounts for about 6% of category sales, up from about 2% five years ago
Chicken is proving to be an increasingly resilient revenue driver.
Despite price increases, greater consumer interest in protein choices, and supply shortages causing store shortages, dollar chicken sales have risen sharply with relatively small volume declines.
In fact, chicken sales for the 52 weeks ended July 10 totaled $14.5 billion, up 9.9% year over year, Chicago-based market research firm IRI reported. Sales in pounds were 5.17 billion, down 2.3% for the period. The average total price per pound rose 31 cents to $2.80.
“Chicken is usually a popular target in recession times because of its cheap price per pound compared to some other big proteins,” said Anne-Marie Roerink, director of 210 Analytics LLC, a San Antonio-based market research and marketing firm, Strategies Firm and creator of the Power of Meat 2022 report by FMI – The Food Industry Association.
“However, given the supply situation, broiler is experiencing very high inflation combined with limited outlets,” she said. “This means consumers are looking for ways to save on chicken, too.”
Among the meat product segments in the July CPI, chicken saw the highest increase in price inflation with unadjusted increases of 17.6% year-on-year (YoY) and 1.4% mom (MoM), compared to increases of 7.2% and 0, 4%, or for the entire meat category, the US Bureau of Labor Statistics reported. In the chicken segment, there were increases of 15.9% year-on-year and 1.9% m-m for fresh whole chicken and 18.6% year-on-year and 1.1% m-m for fresh and frozen chicken parts.
economy and availability
Increasing buyer interest in a wider range of parts is helping to sustain chicken sales activity. While pound sales of breasts – the most popular chicken part, accounting for 57.6% in the category – fell 4.9% last year, volumes of legs and thighs increased 1.5% and 1% respectively, as more consumers embraced cheaper dark meat. said Chris DuBois, senior vice president of protein practice at IRI.
Shoppers’ focus on cutting costs is spurring interest in chicken thighs, which have an average price per pound of $1.26, up just 13 cents from last year, IRI reported.
Chicken thighs, on the other hand, average $2.41 a pound, up 30 cents. Chicken breasts and wings have an average price per pound of $3.65 and $3.67, up 42 cents and 62 cents, respectively, over the last year.
According to Roerink, grocery retailers are also helping shoppers manage their budget by offering cheaper bulk packaging options along with a wider selection of thighs and ground beef.
“There is a strong demand for family packs that can be saved and used over time,” she said.
Still, retailers must overcome periodic stockouts if they want to maximize revenue, DuBois noted, adding that the supply shortages are due to factors such as avian flu-reducing flock size, higher feed and freight costs, labor issues and stronger market demand.
“There’s bottlenecks everywhere, so no one gets as much chicken as they want,” he said.
Offer more value
At the same time, grocers must “get the prices right” and feature chicken in their weekly newsletters, as this protein option remains a key competitive differentiator and business magnet, DuBois pointed out. Merchandisers will also benefit from offering an attractive range of value-added products, he said.
“It’s important to offer innovative flavors to millennials who want to try new things,” explained DuBois.
Value-added chicken is a key focus at PCC Community Markets, a chain of 16 Seattle-area stores. The range has generated double-digit sales increases over the past three years and includes top sellers such as marinated and seasoned chicken breasts, chicken skewers and wings, said David Sanz, meat and seafood distributor at PCC. Newer items include Greek marinated chicken breast skewers and lemon garlic chicken breast skewers.
In addition to the lower prices of traditional selections compared to other proteins, chicken offers consumers more convenience when preparing meals, Sanz reported.
“Most people feel confident when they’re cooking chicken and don’t have to think too much about how they’re doing it,” he explains. “Many other proteins feel difficult to cook or rather daunting to prepare.”
PCC is also seeing stronger online sales of chicken, Sanz said, noting that e-commerce “is the key to increasing sales.”
According to IRI’s DuBois, the average chicken shopper buys nearly 20% more variety online. “Chicken is winning the e-commerce battle and that will continue for the next 10 years as it makes huge strides and changes the way consumers shop,” he said.
Retailers are also benefiting from Millennials’ strong interest in chicken products. This shopper segment is most likely to buy chicken and will surpass the spending power of baby boomers over the next decade, DuBois said. Millennials are already buying 20% more chicken than the average US household. They also over-buy dark chicken and under-buy beef and other proteins.
“This suggests that chicken will grow even more over the long term compared to other proteins,” DuBois said.
Millennials are also active buyers of organic chicken, which accounts for about 6% of category sales, up from about 2% five years ago.
“Organic is a monster trend and is growing faster than the regular chicken category,” DuBois said. “It’s a strong part of the premium chicken segment and buyers are willing to pay the higher prices. Organic is also a big factor in bringing younger shoppers into stores and they are the ones who will generate larger shopping baskets.”