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Chicken is the new beef — and becoming the crown jewel of fast food menus

Where’s the beef chicken?

Food chains are pushing chicken, as the cheaper protein is easier for consumers' tightening wallets, aligns with healthy eating trends, and allows companies more room for innovation.

From Chipotle (CMG) to Burger King (QSR), chicken was the star of the show in the latest earnings reports. Bernstein analyst Danilo Gargiulo said restaurants are realizing they can "combine a lower price point than might attract a decent consumer base with a decent level of flavor profiles."

For Chipotle, limited-time offers like Chicken al Pastor boosted results against a difficult macro consumer backdrop, with store foot traffic up 5.4%. Despite higher prices, its regular chicken burrito costs roughly $9 to $10 depending on location, which many still perceive as a value option.

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Burger King introduced a fiery buffalo royal crispy chicken wrap at $2.99 in the quarter, which contributed to its US same-store sales growth of 3.9%.

Burger King is bringing the heat to its fan-favorite wraps with an all-new Fiery Buffalo Royal Crispy Wrap (Courtesy: Burger King)
Burger King is bringing the heat to its fan-favorite wraps with an all-new Fiery Buffalo Royal Crispy Wrap (Burger King)

Meanwhile, Shake Shack (SHAK) offered a free chicken sandwich with a $10 purchase every Sunday in April, capitalizing on Chick-fil-A being closed on that day of the week.

The CEO of Dine Brands, which owns IHOP and Applebee's, even hinted at a limited-time value promotion around chicken next quarter to Yahoo Finance.

That increasing competition is hitting traditional chicken-only chains.

"At KFC US, same-store sales were pressured from unfavorable weather events and chicken value promotions from QSR competitors," David Gibbs, CEO of KFC's parent company Yum! Brands (YUM), recently said on an earnings call.

More companies will likely look to innovate in this space as diners struggle with stubborn food inflation.

"Price competition was really a challenge," CFRA analyst Siye Desta told Yahoo Finance. "A lot of people have less of a budget, ... [and they think] the trade-off isn't worth it to pay that much more for beef."

Since the pandemic, beef prices have been more inflationary and volatile than chicken. According to the latest Consumer Price Index data, whole chicken cost roughly $1.99 per pound, while ground beef fetched $5.13 per pound.

Taco Bell (YUM) saw US sales increase by 2% as the brand launched a Chicken Cantina menu with slow-roasted chicken. Popeyes' (QSR) US same-store sales jumped 6.2% last quarter as it pushed out a new wing offering.

Chicken wing chain Wingstop (WING) said innovation around flavor leads to repeat visits. "Indulgent Wingstop occasions [is] something that consumers are starting to really appreciate, as they see others taking price," its CEO Michael Skipworth told Yahoo Finance.

In its latest quarter, Wingstop saw US same-store sales leap 21.6%.

Gargiulo said limited-time offerings like Wingstop's hot honey sandwich also incentivize consumers to order the product.

"I can always have the burger, but ... when [a flavor is] only today and you're driven by curiosity and ... you feel that chicken can be healthier [and] cheaper, ... you're swapping beef with chicken," Gargiulo explained.

And this is only the beginning of a larger shift, as chicken is "associated more with health and wellness," Gargiulo added.

Classic burger maker McDonald's (MCD) is facing some pressure on the burger side, Gargiulo pointed out, which they're countering by offering more chicken items.

"We are gaining market share in both chicken and beef," McDonald's CEO Chris Kempczinski said on a call with investors following its Q3 2023 results. At its investor day last December, it shared plans to bring its chicken sandwich, the McCrispy, to all markets by the end of 2025, while expanding into wraps and tenders.

Chicken now makes up $25 billion dollars in systemwide sales for the Golden Arches, equal to the beef segment, JPMorgan analyst John Ivankoe said in a December note to clients. McDonald's chicken nugget sales reel in $10 billion in systemwide sales and are growing at a rate of more than 10% annually since fiscal 2019.

Ivankoe added that the global chicken market is twice the size of beef — a factor to consider for fast food conglomerates looking to expand overseas.

Tyson Foods (TSN), which supplies a majority of quick-service restaurants in the US, said chicken will likely be used as a tactic to lure in customers. The company sells 19 billion to 20 billion nuggets per year.

"Traffic at QSR has been under a little pressure," Tyson CEO Donnie King told Yahoo Finance. "They're going to quickly respond to do something about that traffic, and getting chicken on a menu there or [promoting] chicken is, in my mind, a very likely scenario."

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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