B1 Intermediate US 26 Folder Collection
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It's two pieces of bread, a piece of fried chicken, dill pickles and a
squirt of mayo. Who would have thought such a humble sandwich could set
off a fast-food war.
In fast food, Chick-Fil-A has long dominated the chicken sandwich.
This simple sandwich is part of what propelled Chick-Fil-A to its spot as
the third biggest fast-food chain in the U.S.,
despite being closed on Sundays.
Chick-Fil-A's race to the top has scared even McDonald's, whose U.S.
franchisees asked corporate to develop a worthy competitor to
Chick-Fil-A's sandwich.
In the summer of 2019, a formidable opponent to Chick-Fil-A emerged — and
it wasn't McDonald's.
Popeyes Louisiana Kitchen introduced its crispy chicken sandwich and
conflict started to brew.
The sandwich challenged Chick-Fil-A's dominance in the chicken sandwich
category and fast foods' biggest names got into the battle.
Popeyes sold out of the chicken sandwich in about two weeks.
During that time, analysts say other chicken chains, including
Chick-Fil-A, lost customers to Popeyes.
Americans are ordering and eating more chicken now than ever before.
In a highly competitive industry like fast food, brands are racing to
stake their claim. Chains that have long relied on chicken like
Chick-Fil-A and Popeyes are in prime position for victory.
Others, like hamburger-focused McDonald's, have missed out on dollars
spent by chicken hungry fans.
One thing is clear: Fast-food customers want chicken sandwiches and the
trend doesn't seem to be slowing.
Now the big chains are duking it out to deliver, despite supply chain
issues and fierce competition.
Part of Chick-Fil-A's brand messaging has been that it didn't invent the
chicken, just the chicken sandwich, but American studies professor Psyche
Williams-Forson says people have been eating this type of sandwich as long
as they have been eating bread and poultry.
There's evidence that lots of early colonial households who could afford
the ingredients to make bread and would have any kind of bird, would eat
bread and bird together.
How they did that?
You know, it's not necessarily known.
And of course, on through the centuries, we end up with what we know to be
the sandwich and the chicken sandwich at that.
And competition around the chicken sandwich isn't exactly new either.
Ebony magazine searched black newspaper archives and found ads for the
chicken sandwich, going back to as early as 1936.
Chick-Fil-A's founder S. Truett Cathy invented the chain's original
chicken sandwich in 1964.
That sandwich was made of a boneless chicken breast, breaded and fried in
peanut oil, and served on a toasted buttered bun with pickles.
The first Chick-Fil-A opened in 1967 and the chain has been closed on
Sundays since then.
Despite that, Chick-Fil-A is the third biggest restaurant chain in the
U.S. by system wide sales and reported more than $10 billion in revenue in
2018. For comparison, Popeye's pulled in $3.7
billion in sales in 2018, making it the 25th largest U.S.
chain. When Popeye's parent company, Restaurant Brands International,
quietly discussed a new menu item in its May 2019 Investor Day, it didn't
know that the product's launch would cause such a frenzy.
It was the first time in its nearly 50-year history that Popeyes offered a
chicken sandwich that was available nationwide.
In the past, its menu tended to focus more on bone-in products.
This sandwich is a white meat breast fillet, pan-battered and breaded in a
buttermilk coating served on a brioche bun.
There is one version with regular mayonnaise and another with spicy mayo.
Popeyes rolled out its sandwich on August 12th, 2019.
One week later, this sandwich set off a virtual confrontation between some
of the biggest names in fast food.
Chick-Fil-A tweeted an equation suggesting that its sandwich was the
original and the best.
Popeyes had a simple, but pointed response to Chick-Fil-A.
Y'all good? Their check-in prompted other chicken brands to get into the
conversation. Soon, Wendy's and Shake Shack jumped into the Twitter feud,
too. This is what people love to see.
They love to see kind of folks going at it and in a fun and competitive
way, of course. This is the reality TV series happening in real time with
real companies in real dollars and real delicious food at stake.
Those tweets set off a social media firestorm and nearly doubled Popeyes
Twitter followers from 100,000 to 180,000.
A marketing group estimated that Popeyes received over $65.1
million dollars in equivalent advertising value for media mentions between
August 12th and August 27th.
The sandwich's impact was bigger than just raising Popeyes profile with
consumers. It was also a boon to Popeye's bottom line, thanks in part to
the chicken sandwich, sales at stores opened more than a year grew by 9.7
percent in the third quarter of 2019, compared to .5
percent growth in Q3 of 2018.
One analyst estimated that Popeyes sold about a 1,000 chicken sandwiches a
day and that the sandwich accounted for about 30 percent of sales while it
was available, at least.
After about two weeks with the chicken sandwich on the menu, Popeyes
around the country started selling out.
It simply ran out of chicken fillets.
Fans started posting pictures of handwritten, sold out signs on Popeyes'
doors and drive-thru menus.
Popeyes was even hit with a lawsuit by an angry customer for selling out
of the sandwich. You saw Popeyes' market share more than double and then
you did see a dip in foot traffic share at Chick-Fil-A, McDonald's, Burger
King and Wendy's. You know that the the actual infamous y'all good tweet
happened just as Wendy's was launching their spicy chicken sandwich and
and just as Burger King was launching the Impossible Whopper nationally.
So it sort of took the steam out of those promotions for for a few short
days. But the positive impact of Popeye Sandwich wasn't limited to just
that chain. The third quarter is the most important part of the year for
fast-food companies because it includes the summer months, a crucial
selling season. It was a very successful third quarter for fast food in
general. I think it was probably the most fastest sales growth in several
years. And the chicken sandwich has some responsibility for that sector
wide growth. Hype around Popeyes' national release of its chicken sandwich
actually benefited its competitors.
Chicken-focused fast food restaurants like KFC and Chick-Fil-A saw traffic
spike in late August 2019.
Over a typical summer weekend, Popeyes, Chick-Fil-A, Zaxby's and KFC would
get about 8.3
million visitors, according to foot traffic analytics platform Pacer.ai.
But at the peak of the Chicken Sandwich War, the chains had 10.1
million visitors over a weekend.
And now Popeyes has brought its sandwich back.
Its nationwide launch on November 3rd, 2019 saw huge crowds.
Traffic at Popeyes that day rose almost 300 percent higher than normal.
One analyst estimated at busy Popeyes locations sold up to 1,500 chicken
sandwiches per store every day for the first 10 days the sandwich was
back, effectively doubling sales volume at those stores.
And Popeyes' competitors are racing to keep up.
In July 2019, McDonald's U.S.
franchisees asked the company to add a southern-style chicken sandwich to
rival Chick-Fil-A's.
Franchisees said McNuggets and McChicken sandwiches weren't enough to
compete in the premium chicken sandwich category.
On an earnings call, McDonald's said it missed out on some business in
chicken.
In December 2019, Mcdonald's started testing a crispy chicken sandwich,
officially entering the chicken sandwich wars.
Well they said on their conference call that they actually lost share
during in the chicken segment, but they gained share in the burger
segment. So clearly, this is an issue for them that they're looking to
correct. The franchisees have been asking for a premium chicken sandwich
for some time. You know, the sandwich isn't likely to be hand-breaded,
hand-battered the way it is at Popeyes.
So McDonald's will have to find a way to win on their core advantages,
which is speed, convenience and value.
The war is far from over.
And if I were to make a longer-term prediction, I would not predict that
Chick-Fil-A would be a loser in that chicken war overall.
There's so much momentum behind the growth of that company and so much
brand equity that it just resonates with consumers young, old and
everywhere in between in a lot of ways.
For decades, hamburgers have been Americans' sandwich of choice on
fast-food menus.
Now chicken sandwiches are stealing some of the spotlight.
Chicken sandwiches remain number two, but they are gaining ground with
consumers faster than burgers are.
According to market research firm NPD Group, for the year ended February
2019, four billion chicken sandwich servings were ordered at U.S.
restaurants. During the same time period, burgers were more popular with
8.6 billion ordered, but chicken sandwich orders were up four percent
while burger orders stayed flat.
On average, diners still purchase burgers more frequently than they
purchase chicken sandwiches.
But burger makers shouldn't rest too easy.
In general, chicken consumption is on the rise.
From 1960 to 2018, per capita chicken consumption has risen 235 percent to
93.8 pounds a year.
During the same time period, per capita consumption of beef has fallen 9.6
percent. 1991 was the last year people ate more beef than chicken.
In 2018, Americans ate about 94 pounds of chicken compared to 57 pounds of
beef. That's a pretty dramatic difference in that, you know, and that's a
reversal from 40, 50 years ago.
This was not always the case.
And it goes to show what technological progress and changes in consumption
habits, those combination of factors can do to change our diets.
Analysts point to three main factors that have contributed to higher
chicken consumption: health concerns, technological advances and a growing
population. The National Institutes of Health and the World Health
Organization have linked red meat consumption to heart disease and cancer.
Some have pointed to white meat like chicken and fish as a healthier
alternative. Technological advances have also made it possible to produce
larger chickens more quickly, and the price of chicken has fallen in
recent years. If you look at what's happened to the price of chicken
relative to say beef, it's fallen by about 45 percent over the last 20
years. So today chicken is about a third of the price of beef at the
retail level. A similar thing has happened for pork.
So today, chicken is about half the price of pork.
But in the chicken sandwich war, not all chicken is created equal.
Some pieces are better for sandwiches than others.
Most fast food chains rely on breast meat for its sandwiches, which is
typically more expensive than chicken wings or thighs.
Fast-food restaurants have offered chicken items for years, but analysts
say this social media feud attracted a new generation of consumers.
Certainly the generation that follows social media might might go into a
fast-casual restaurant.
You know, maybe your Chipotle consumer or your Shake Shack consumer
doesn't really look to traditional fast food as having a, you know, high
quality, upper-level experience and so by having a product that is of
that, you know, that that rivals the chicken shack will bring in a
generation that's probably never eaten a Big Mac before.
Burger orders may be flat.
But despite attracting a new audience, analysts don't think chicken
sandwiches will pull ahead of burgers any time soon.
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McDonald's Popeyes, Chick-Fil-A And The Chicken Sandwich Wars

26 Folder Collection
day published on April 20, 2020
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