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Tuesday 4th October, 2022

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American chicken craze
American chicken craze

Insight

American chicken craze

Eddie Goitia examines why customers are flocking towards the emerging chicken brands, and whether this hot trend has wings for future franchising

For those of us who are parents or older siblings, let’s be honest. Over the years, how many times have we quickly snuck away a chicken McNugget from a small child’s Happy Meal? Your parental or sibling guilt is quickly overcome by the satisfaction of that tasty, little fried morsel.

Over the last several years, it seems that America – as well as other countries around the world – has fallen in love with chicken all over again. We’ve witnessed what seems to be an overnight sensation in chicken demand and chicken offerings. In the last two years, chicken sandwiches, chicken fingers and chicken nuggets became more popular than ever, and the franchise scene has seen remarkable growth in this segment.

We must wonder why this overnight sensation has resulted in a new craze when chickens – and especially fried chickens – have been around for so very long. About 10 years ago, some franchising experts speculated that the demand for fried chicken was stagnating among American consumers. However, I’m here to say that the craving for new fried chicken offerings in America is on the rise and will continue to grow for years to come.

We Americans have always loved fried chicken, and now that it’s being done differently, we dig it even more.

U.S.-based franchise market Intelligence firm, FRANdata, has been carefully tracking this growing chicken craze. According to FRANdata’s CEO, Darrell Johnson, “Fast food chicken is one of the fastest growing segments in franchising across food sectors. Within the past five years, we’ve seen 41 new fast food chicken concepts enter franchising.”

This segment’s evolution is also influenced by multiple market trends. “The growth of multi-national chains and the rise of doorstep delivery are significant drivers of this growth. We see a wide range of companies, from startup/mom-and-pop QSR shops to regional brands, employ the franchising business model,” adds Johnson.

As shown in the chart by FRANdata, new franchise brands entering the chicken fast food segment increased significantly in 2021 with continued growth into 2022 (Fig 1).

Fig 1

And, according to FRANdata, between 2018 and 2021, the average number of franchised locations in the chicken fast food segment has increased at a compound annual rate of 20 per cent (Fig 2, overleaf ).

Fig 2

Within this feeding frenzy, we’ve seen new and innovative brands aggressively competing for market share. We’re beginning to see that the chicken sandwich, chicken finger and chicken nugget segment is emerging as a powerful new trend in F&B franchising.

Blazing a trail

We could go on and on about the super growth of Chick-fil-A over the last decade and what they’ve done to expand the market and more than triple their systemwide sales from 2010 to 2020.

When the big boys start testing new chicken concepts, you know that the niche is hot. Take the example of Yum! Brands, which opened its test store for a new brand, Super Chix, in April 2014. However, the following year, Yum! decided to spin it off and concentrate on its core chicken brand, KFC.

Under new ownership, Super Chix expansion is now underway with 17 locations currently open. By year-end, 21 are slated to be open, and more than 340 franchise rights are now sold in nearly every state. What makes Super Chix so popular, after mega giant Yum! Brands cast it aside? In summary, the new leadership of Super Chix succeed in executing on every competitive angle and delivering a premium fried chicken product. They were also on trend. The Super Chix brand was in the perfect market position at the right time.

Super Chix and other new chicken concepts understand that meeting the flavor-craver expectation is where the market opportunity lies. These new consumers desire chicken sandwiches and chicken fingers with flavor-filled sauce options.

Taylor Christensen, chief marketing officer at TCAV Investments, franchisee of Super Chix, explains why the brand appeals to prospective franchisees: “We had two crucial aspects to choosing a chicken concept to franchise, which simply came down to the food and executive support. Chicken brands like Super Chix that have a dedication to high-quality food and sharp operations will develop a devoted fanbase.”

“This will not only raise the return on investment but will give franchisees a sense of pride for the offerings they are bringing to communities. Super Chix has developed a cult-like following as a result of its amazing food and skilled operations. The brand is fun and engaging which has given us a leg up in our hiring and growth,” adds Christensen.

Shaq’s slam dunk

So, do we have a slam dunk in expanding franchises in this segment? Yes. Last year at the International Franchise Association conference in San Diego, the headliner speaker was basketball superstar Shaquille O’Neal. Beyond being a sports celebrity, Shaq is a veteran franchisee of Domino’s and Auntie Anne’s Pretzels. At the IFA, Shaq spoke about his newest franchise project — getting into the chicken segment with his new brand Big Chicken — which began franchising in 2019.

According to Big Chicken’s CEO, Josh Halpern, “The question isn’t necessarily whether or not it makes sense to jump into the chicken segment — the industry is booming and isn’t showing signs of slowing anytime soon. Instead, the important question to consider is what chicken concept to grow with.”

“For Shaquille, chicken is personal — when he thinks about chicken, he thinks about his childhood friends and family. Big Chicken is his passion project and we want to make sure we’re growing with partners who understand that and have the knowledge and background to deliver the quality experience and product our fans have come to expect,” adds Halpern.

Sauce and sandwich

What stands out in this chicken craze is that it comes down to the sauce and the sandwich, and the sides are truly secondary. Popeyes was a sluggish brand 10 years ago, providing good on-the-bone fried chicken fare, and then something magical happened. The perfect business storm converged – between social media and a new chicken sandwich product offering – which propelled Popeyes into the spotlight. Today, at nearly every chicken franchise system, you will find a quality fried chicken sandwich as a centerpiece of their menu.

Hey, but let’s not forget the sauce. The growing demand for flavor continues, and the chicken segment has not held back. Franchisors have learned that their customers want flavor variety, and franchisees must be prepared with the full offering.

International flavors

In addition to emerging American concepts, international chicken chains are presenting their unique flavors to the American consumer. Pollo Campero, originally from Guatemala, and Bonchon, from South Korea, are concepts with hundreds of locations globally. These two brands also spent decades carving niches in the US quick-service chicken market, and they have been rewarded with a loyal following of U.S. customers.

Another flavor-filled chicken recipe that is catching on in the U.S. market is Piri Piri, a spicy style of chicken with roots in Portugal and Africa. The most famous Piri Piri chain is Nando’s, a South African restaurant group, which boasts over 1200 locations worldwide. Although it offers franchises in South Africa, U.K. and Australia, Nando’s has opened over 40 company-owned locations in the U.S. market and is building a loyal clientele.

This growing influence of international chicken concepts is helping to shape the American chicken craze, and perhaps they are setting an example for future international concepts to brave the U.S. market. In the words of FRANdata’s Darrell Johnson, “Buoyed by wide-spread consumer enthusiasm, this sub-sector trend in fast food chicken is likely to continue for the foreseeable future.”

So what does the Chicken Craze mean for franchisees and franchisors?

For franchisees — Don’t be chicken and seize the moment

This growing segment means opportunities for emerging brands to catch the surging chicken craze and flavor trends. For potential franchisees sitting on the sidelines since the beginning of Covid, this may be the single greatest opportunity to jump into a burgeoning new F&B trend with staying power and solid return on investment.

For franchisors — Keep up with demand

While we see a growing opportunity to join the franchise chicken niche, there are also the supply and pricing pressures that create challenges. For this F&B segment, having the supply chain locked in has never been more important. The chicken demand has grown exceptionally and will continue to increase as franchise systems expand. Full-service restaurant groups have had to ante up their game by adding more chicken offerings, as beef prices have shot up and restaurant margins are continuously squeezed. Operators also continually seek to add new high-demand menu options with lower food costs.

Earlier this year, chicken giant KFC began offering plant-based chicken. While I haven’t had a chance to bite into this new “chicken-ish” product, my gut tells me it’s going to be a bigger leap than plant-based hamburgers. Who knows? Add a few flavorful sauces, and perhaps customers may decide that it “tastes just like chicken.”

The author

Eddie Goitia is a partner at FranLaunch USA, a franchise management firm that facilitates U.S. market entry for international franchisors and advises emerging U.S. franchisors on growth strategy. With over 30 years in F&B, Eddie served as the CEO of The Tilted Kilt, one of the largest pub franchise chains in the U.S. He also owned a multi-unit regional restaurant group with $10m in annual sales

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