American fried-chicken craze puts strain on poultry supply

KFC says it is struggling to keep up with demand for its new chicken sandwich. The restaurant chain is among others that have added chicken options to their menus, straining the U.S. poultry supply. (AP)

The popularity of chicken -- from sandwiches and tenders to nuggets and wings -- is fueling such demand for fried poultry that America is starting to run short.

KFC says it's struggling to keep up with soaring demand for its new sandwich, while North Carolina-based chicken-and-biscuits chain Bojangles reported outages of tenders across its 750 locations.

"We're experiencing a system-wide shortage. But they will be back soon," Bojangles' corporate Twitter account said earlier this week in response to a customer frustrated by being unable to find the company's chicken tenders.

Chicken, which is the most popular meat in the United States, is finding a new level of demand after Popeyes introduced a sandwich in 2019 that went viral and sold out in weeks. The frenzy has now caught on at other chains, as well, with McDonald's and KFC, owned by Yum! Brands, reporting this week that their new fried-chicken sandwiches are selling beyond expectations.

"Demand for the new sandwich has been so strong that, coupled with general tightening in domestic chicken supply, our main challenge has been keeping up with that demand," Yum Chief Executive Officer David Gibbs said in a Wednesday conference call.

KFC saw its comparable-store sales soar 14% in the most recent quarter in the U.S., in part because of its new chicken sandwich that's selling twice as much as past new sandwiches.

McDonald's, which also reported higher-than-expected first-quarter sales, did not mention any supply constraints when it reported earnings Thursday but did say sales of its new chicken sandwich line are "far exceeding expectations."

Poultry companies have been struggling to keep up with demand from quick-service restaurants. The biggest challenge for Pilgrim's Pride, the second-biggest U.S. chicken producer, is labor, according to CEO Fabio Sandri. The company expects to pay $40 million more this year to compensate and retain workers, Sandri said Thursday.

Wingstop's chairman, Charles Morrison, whose business is built on chicken, also mentioned the problem this week.

"Suppliers are struggling, just as many in our industry are, to hire people to process chicken, thus placing unexpected pressure on the amount of birds that can be processed and negatively affecting supply of all parts of the chicken in the U.S., not just wings," he said in a conference call.

Some food companies may be able to capitalize on the opportunity: To try to capture some of the red-hot demand, Beyond Meat is planning to start selling a plant-based chicken product this summer, Bloomberg News reported this week.