Wednesday, July 20, 2005

Chicken. Is it the new hamburger?

McDonald’s announced it’s joining a flock of competitors from the other side of the road. In a bid to keep their newfound sales momentum alive, they’re greatly expanding their chicken-based menu items. To quote from the Chicago Sun-Times:

”The new sandwiches are larger than McDonald's McGrill or Crispy Chicken sandwiches. They consist of chicken on a honey wheat roll served with leaf lettuce and Swiss cheese. Three kinds will be available -- the Classic, the Ranch BLT and the Club -- and customers will be able to buy crispy or grilled versions of each. McDonald's, the world's largest restaurant chain, will unveil the products today in New York City and sell them nationally beginning on Aug. 2.”
"It's an upgrade," said Malcolm Knapp, a New York-based restaurant consultant. "It's going to appeal to the higher income demographic."

McDonald’s is on a health kick and they’re fueling it with salads and new chicken dishes. Why chicken? It seems to be attracting new customers because they perceive it as "healthier."
McDonald’s Chicken Selects helped turn around a sales slump.

But McDonald’s chicken sandwiches usually have about as many calories as a Big Mac. Their healthy image might be because they’re served on those honey wheat rolls, instead of the boring and bland white bread buns used with their burgers. An extra flavor boost comes from the addition of things like bacon and Swiss cheese, excellent sources of additional fat and cholesterol.
Chicken now represents over 30% of McDonald's sales. "It's almost hard to overstate how important (chicken) has been," said Wade Thoma, V.P. of Menu Management. "Most of our growth has been through innovations within chicken."

Because chicken is such a hot item at McDonald's, it’s driving Burger King and Wendy's, ersatz burger chains all, to fire their biggest marketing guns at each other creating a chicken war with chicken salads, sandwiches and the fowlest of other fare. Wendy’s is generally credited with starting the three down this path with the successful introduction of products like their spicy chicken sandwich several years ago.

With the three biggest burger barons slugging it out for market share, the National Chicken Council is delighted to report that quick service restaurants now serve 25% of all chicken consumed in the United States up from 17% in 1995.

Stepping up the fast food row warfare, McDonald's tosses its new sandwiches into the fray, Burger King battles back with BK Chicken Fries, their answer to McDonald's and Wendy's chicken strips, and a product that platoons nicely with their TenderCrisp chicken sandwiches and salads.

Wendy's had the field to itself for a long time with Homestyle chicken strips and Chicken Temptations sandwiches. Now they’re in a defensive mode, forced to fight back with new products which might include flavored chicken strips and deli-style sandwiches snatched form Arby’s play book. The chain will also promote a Monterey Ranch chicken sandwich next month as a limited time offer.

But wasn’t the big player in the poultry wars an outfit called KFC? Or more recently Kitchen Fresh Chicken? Let’s use their most current name: Kentucky Fried Chicken. And how about a tasty regional player called Chic-fil-A?

Kentucky Fried Chicken is no stranger to protecting its turf with price wars. They’re shooting back with chicken salads and a 99-cent sandwich which seems to be a big seller. Maybe they need to add a lean ground beef patty to their menu and sell it as a healthy alternative to fried chicken.

Those Chic-fil-A folks in Georgia are refusing to do battle with the burger barons. Instead, they seem to be trying to expand their weak breakfast business by taking on another big gun (Starbucks) by introducing new “Café Blends” coffee. The company describes the coffees online as “Three rich roasts all the way from Central and South America that do anything but blend in. They're the warm spot in any morning.”

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