The poultry sector faces growing challenges

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Poultry is the crowd-pleaser protein and has long been featured among value offerings, but this dependable stalwart has suddenly faced growing challenges recently.

“Poultry used to be [the] number-1 choice of consumers — whether at a supermarket or a restaurant,” says chef Colin Burslem, director of Culinary for B.C.’s Joseph Richard Group (JRG), which operates a number of traditional and virtual restaurant brands. However, inflated prices have created challenges when featuring poultry on menus.

“I happened to stumble across a menu from 2011 (from a place I worked at prior), [and] we could put a pound of chicken wings on the menu for $12.10 [then]. Now, for the raw product alone — before we do any preparation to it — we’re looking at anywhere from $10 to $12 [our cost]; sometimes even $15 to $17 per kilo [our cost] for chicken wings.”

Given these economic realities, Burslem notes, “We’ve had to re-train staff to look at that product as a premium product, not just an economic product anymore.”

With these inflated prices, operators are having to balance guest expectations with food costs and margins. As an example, Burslem says operators have to consider whether it’s realistic to expect guest to pay $20 for a pound of chicken wings at a local pub. “Or, is it [about] trying to find other wins on the menu, like a chicken-breast sandwich, and getting better margins on that and then relaying that savings to other items on the menu?”

Overall, the current environment has meant chefs and operators have had to get creative. “We’ve had to look at alternative ways of purchasing the product, whether it’s doing a bulk buy on something and offering a frozen chicken wing versus a fresh chicken wing, or considering a random chicken breast versus a large-sized chicken breast,” Burslem adds.

There have been a number of factors contributing to challenges and fluctuating pricing for chicken products, including recent bird-flu outbreaks and flock loss in western Canada due to extreme weather (including extreme heat and flooding).

These supply challenges have led to an increased reliance on imports, which, given the state of the Canadian dollar, further inflates costs.

In fact, these supply challenges led McDonald’s Canada to temporarily put its commitment to using Canadian chicken on hold in 2021. In an August 2022 announcement, the company stated: “To ensure the availability of chicken menu items at our restaurants across Canada, we continue to temporarily source Chicken McNuggets from a McDonald’s supplier in the U.S., in addition to the Chicken McNuggets that continue to be produced in Canada.”

“Across the board, we’ve seen unprecedented highs in poultry [pricing],” says Burslem. However, he notes things have been shifting recently. “It’s been encouraging in the last few months…to see some pricing come down. But, as prices have come down, it hasn’t been across the board — it’s been one-offs and opportunity buys that we’re seeing.”

Despite these challenges, Vince Sgabellone, Foodservice Industry Analyst for Circana (formerly The NPD Group), notes chicken has remained a major feature for restaurant meal occasions. “Despite all the ups and downs, the average share of occasions that includes chicken [at full-service restaurants] is holding pretty steady,” he explains.

Plus, looking at DoorDash Canada’s 2022 end-of-year trend report, it seems pretty clear that chicken remains a star protein for delivery diners, too. Chicken claimed multiple spots on the report’s ‘Top 10 Most Ordered Foods in Canada’ list, with fried chicken taking second, chicken wings ranking fifth and chicken rice bowls in seventh. And, looking at rankings of top items in each province and major city, it’s quite clear that chicken is ubiquitous — whether it’s chili chicken, butter chicken, chicken shawarma, chicken lettuce wraps or a crispy-chicken sandwich.

And, the versatility of chicken is more than anecdotal. According to Technomic Ignite menu data, the fastest-growing flavours paired with poultry over the past year included Havarti (up 50 per cent), lemon grass (up 26.9 per cent), mango (up 26.8 per cent) and peri peri (up 25.7 per cent).

“Several of these are global flavours, as global influences overall are increasing on menus,” notes Katie Belflower, associate editor, Technomic. This trend also overlaps with curry dishes ranking among the top poultry menu items last year.

Sgabellone points to Mexican, South Asian and Southeast Asian as key global flavours that are trending. However, he notes, you can find a wide array of international flavours of chicken throughout Canada. “You can look up and down any busy restaurants strip and there’s anything and everything.”

Closely tied to this trend, Burslem observes, “We’re seeing a move towards pre-marinated, pre-prepared products.” He points to Mediterranean, North-African and Moroccan flavours as significant focuses, as well as Caribbean flavours with sweeter aromatic spices being used in marinades for chicken.

A glance at menus will confirm the continued appeal of chicken prepared with international flavours. Earls’ most recent menu additions include the Earls Chicken Biryani, served with spiced basmati rice, green cardamom, cilantro raita and lacha bread ($25.75). And, JRG’s Townhall pubs feature a Buffalo Chicken Taquitos appetizer featuring corn tortillas, roasted chicken, cheese, roasted corn, black beans and salsa crema ($16.75).

Chipotle Mexican Grill has even broadened the Mexican flavours it offers with the recent introduction of Chicken al Pastor for a limited time — featuring a marinade made with Chipotle’s signature adobo, morita peppers and ground achiote and a splash of pineapple.

But, overall, Sgabellone says, “The flavour trend that we see at the top of the list continues to be spicy (or hot, or pepper)…That seems to still have some good momentum and will likely continue.”

Nashville Hot is among the recent trending takes on this and can be seen on Swiss Chalet’s menu in its Nashville Hot Crispy Chicken Sandwich. Burger’s Priest also features a Hot N’ Honey Chicken sandwich with lettuce, tomato and pickles.

Similarly, JRG’s Townhall Abbotsford features a Memphis Hot Chicken Bites appetizer on its menu, which features buttermilk-brined chicken breast, signature honey hot sauce, Alabama white sauce, sliced jalapeño and pickles ($16.50).

Birds of a feather
Of course, chicken isn’t the only poultry on Canadian plates. However, these other proteins have not been spared the challenges of the day. Burslem notes inflated prices have made turkey less feasible to keep on menus.

“[Turkey] was a very economical choice for menus for a long time. And now we’re seeing pricing that’s pushing it off of menus. A turkey club sandwich used to be something seen on pretty much every restaurant menu, now it’s just priced right out.”

He notes JRG still offers turkey breast on some of its menus, such as Tavern on the Green’s Ledgeview Club House sandwich (citrus-brined turkey breast, bacon, lettuce, tomato and whole-grain mustard aioli on ancient grain bread ($20)), which remains the venue’s top-performing sandwich. But, he notes, “I’m always mindful of what price we ought to charge to get that on [the menu].”

Despite all this, some other poultry products are gaining ground. As Belflower explains, Technomic data showed turkey sausage (up 25 per cent) and duck breast (up 20.6 per cent) to be the fastest-growing poultry items on Canadian menus between Q4 2021 and Q4 2022.

When it comes to poultry outside of chicken, Burslem notes that consumer interest comes down to confidence, with many people hesitant to try new things that are outside their comfort zone.

And, with the current economic uncertainty, there may well be increased hesitancy to spend money on a meal or menu item that they’re not confident they’ll enjoy.

Burslam also notes, that while he could see something like a duck breast doing “really well,” when operating at a large scale, it’s important to consider the byproducts of your demand. “What about the rest of the duck? What’s happening to the wings; what’s happening to the legs?” he says. “So, I’m always trying to think whole-animal when we’re [introducing new proteins].”

Looking ahead, we can expect to see continued innovation with poultry menu items because new experiences hold value for consumers. “They’re looking for something new, something exciting, something they haven’t tried before, something they can indulge themselves with,”
says Sgabellone.

BY DANIELLE SCHALK

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