Playing Chicken

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Playing Chicken

By Bob Phillips - 02/20/2016

Chicken is one of America’s favorite foods. In convenience stores, chicken programs have long been strong in the Deep South and Southeast, and they are slowly starting to build in popularity in areas north and west as well.

According to the latest Convenience Store News Foodservice Study, published in August 2015, average per-store sales of chicken grew by $17,296 in 2014 — a healthy 7.2-percent increase vs. the previous year. That put chicken at No. 4 among prepared foods in the channel.

Long-time convenience store industry expert Paul Pierce, with prior experience at such convenience store chains as 7-Eleven Inc. and MAPCO, corroborated CSNews’ research, citing that chicken breakfast sandwiches/wraps as a percentage of breakfast entrees grew from 3.1 percent in 2014 to 3.3 percent in 2015, and they grew from 3.6 percent to 4.2 percent as a percentage of breakfast handheld sandwiches.

In fact, Pierce, the new vice president of national sales for convenience distributor Eby-Brown Co. LLC, noted that chicken breakfast sandwiches/wraps have moved into the top 10 in the overall breakfast sandwich category, currently sitting at No. 9.

A study conducted by Tyson in 2014 showed that chicken products such as tenders, nuggets and strips offered a similar sales profile to other popular grab-and-go convenience store food items, such as breakfast sandwiches and hot dogs.

“Chicken is a great addition that allows convenience store retailers to increase their hot food offerings,” said Rob Ramsey, senior manager, channel marketing for Tyson Convenience. “It also provides them with additional items for the afternoon snacking daypart.”

The Broaster Co., another major player in this category, sees a strong trend toward chicken in the convenience channel. The Beloit, Wis.-based company manufactures pressure fryers and other chicken/foodservice-related equipment and distributes fresh product through a network of local distributors.

“Being in the business of branded chicken products, both on the fresh side with our Broaster Express line as well as the grab-and-go side of the business, we have seen a strong trend in foodservice in c-stores,” observed Chad Vendette, director of marketing at The Broaster Co. “With declining margins in gasoline, cigarettes, beer and other things, c-store operators are trying to boost profits and foodservice is a good way.”

UNIVERSAL APPEAL

A big reason why convenience stores are taking a serious look at chicken is the product’s target market: people who breathe. Chicken is widely consumed across the globe, traversing geographic, cultural and religious customs.

What better way to appeal to your current customers (and bring in new customers) than offering a variety of chicken products in your foodservice operation that fulfill their needs? This can be done via any platform — grab-and-go, made-to-order, fried or fresh chicken products.

“Convenience store retailers have an opportunity to offer a chicken program that appeals to their specific customers’ needs,” advised Tyson’s Ramsey. “For example, portable handheld offerings like chicken tenders or boneless wings fit behaviors prominent among many convenience store consumers.”

Through research and direct experience, Broaster has found the chicken market to be “extremely broad,” Vendette agreed. “It encompasses everyone from travelers to manual laborers to moms grabbing something quick for their kids. It really seems limitless.”

In fact, chicken has too many things going for it to ignore, industry insiders contend.

“It has a very wide appeal, there are many ways to prepare it, and there aren’t many religious or cultural restrictions on chicken consumption,” noted Vendette. “That increases its appeal.”

He sees on-the-go motorists as the primary consumer of chicken tenders from c-stores, making this an ideal product to promote at the fuel pumps to entice a person who thought he or she was just stopping to fill his car’s tank to perhaps step into the store to fill his own tank.

“People on the move need some quick protein and don’t mind that it’s fried,” said Vendette.

A chicken meal fits virtually everyone’s budget, too. “A few chicken tenders and potato wedges, and for $3.99 you’re out the door,” he continued. “And I can’t think of a more car-friendly food outside of a banana.”

WIDE WORLD OF FLAVORS

While some consumers are looking for just the basics, others — particularly teens and millennials — are what Vendette calls “big dippers.” They want a variety of seasonings and sauces to spice up their orders. This means c-stores offering chicken should provide accoutrements that appeal to a broad range of tastes and ethnic preferences.

“Chicken nuggets, wings and tenders lend themselves to on-trend, customer-driven customization,” he said. “This can include incorporating a variety of ethnic or regionally based sauces/glazes that customers can use to enhance the basic product offering.”

Sriracha still seems to be the hot flavor of late, but Chad Prast, senior category manager of fresh foods and dispensed beverages for convenience store chain Murphy USA Inc., said he can see sriracha slowing down in 2016 as other spicy flavors take over.

Mathew Mandeltort, Eby-Brown’s director of foodservice, agrees with the strategy of offering flavors that appeal to the widest possible customer base. Such flavors may include the following condiments, depending on the ethnic makeup of a store’s neighborhood:

  • Regional barbecue sauce
  • Teriyaki sauce
  • Sweet chili sauce
  • Buffalo sauce
  • Salsa
  • Cheese
  • Korean barbecue sauce

These condiments can be offered through a variety of methods, including squeeze bottles, portion-control packets or cups, and available either for dipping or full coating.

“Also, retailers would benefit from exploring different breaded/battered coatings such as tortilla crumbs, beer batter, parmesan crust, panko (Japanese bread crumbs), coconut, sriracha, or even whole-grain for retailers looking to take a better-for-you position,” said Mandeltort. “Though this increases the number of SKUs, it may be a good strategy to employ for LTOs [limited-time offers] as a means to avoid category fatigue and keep customers engaged with new, innovative products.”

STARTUP COSTS

The initial investment for a chicken program can be steep depending on your goals, strategy and execution. However, if you are just looking to test the waters, tenders are the way to go. “You’re talking between $50,000 and $100,000 to get into the fried chicken business,” advised foodservice consultant Joseph Chiovera of XS Foodservice & Marketing. Most of that investment is in equipment and, most importantly, installing an adequate ventilation system that will meet code. “That’s your biggest startup cost. And chicken fryers are quite expensive,” continued Chiovera, pointing to Henny Penny and BKI units, which can range from just under $1,000 to more than $20,000 depending on the brand, grade and style of the unit.

Then, there’s all the moving parts associated — frying station, dumping station, the bins needed to clean the chicken, bins to store the chicken, a dedicated sink area to wash the chicken safely and, of course, your oil and oil-removal products. “And don’t forget the cost involved in powering the fryers. You probably don’t have that power in the store already,” he added. “So from scratch, you’re probably talking between $30,000 and $60,000 to get into the business.”

From there, retailers have to then merchandise the category and train their people how to safely handle raw ingredients. “It’s not for the faint of heart,” Chiovera cautioned.

Translation: Although the initial investment for a fried, bone-in program may be worth its while in Mobile, Ala., it wouldn’t necessarily be the right move in Rutland, Vt.

TENDER MERCIES

While it’s true that a heavy investment may be required for a full fried chicken program that includes bone-in, wings and tenders, which could run side-by-side with other made-to-order programs (sandwiches, subs, etc.) and grab-and-go items, such a steep initial investment is not at all necessary for c-stores just wanting to test the chicken market.

“A chicken tender offering is one of the easiest first steps a convenience store retailer can take when expanding their foodservice offerings,” explained Tyson’s Ramsey. “For the convenience store consumer, chicken tenders work well as they are handheld, portable and familiar given they are already part of the quick-service and fast-casual landscapes. For convenience store retailers, chicken tenders are an item that heats easily and offers a quality product.”

Broaster’s Vendette agrees tenders are probably the way for many c-stores to start. “Startup costs with a tenders program can be less because of the equipment requirements, but a bone-in program is not that much more expensive,” he noted. “Where a bone-in program becomes a decision point is: Are you willing and capable of handling fresh chicken?”

There is a shelf-life issue with fresh-cooked chicken, not to mention health code requirements that vary from state to state. “If a c-store has already been doing [a fresh program, fresh-cooked chicken] fits in perfectly,” Vendette said. “If not, they have to get the methods in place to make sure they are handling it and producing it correctly.”

As for his estimate on exactly how much of a financial investment is required for a viable c-store chicken program, he noted that Broaster produces a wide variety of equipment, giving c-store retailers an array of options from which to choose.

“On the low end of the spectrum, an operator who is looking to see if the program works before committing to a full-package program can get in for a relatively low number,” according to Vendette. Startup costs for such a retailer could be less than $10,000. “Mid-four figures,” he said. “That includes equipment, some food and minimal branding.”

Vendette recalled one retailer close to Broaster’s Beloit home base that started precisely that way. This retailer “was a bit skeptical at first,” he acknowledged.

Since Broaster sells its chicken products through local distributors, the retailer’s distributor explained the enormous potential upside of a successful chicken program, so he went in with a minimal investment. “Within a year, [chicken] was his overall best-selling item and increased his store traffic,” Vendette shared. “After that, he bumped up the program and bought more equipment and signage and branding.”

Tyson’s Ramsey also noted that another benefit of launching a chicken program is that it won’t require a large dedicated footprint. “Chicken makes a great additional offering to any existing hot grab-and-go operation,” he said. “Convenience store retailers can easily add fully cooked chicken to the menu with a small investment in an oven and a warming cabinet, beyond what’s necessary to meet local health codes.”

GETTING THE WORD OUT

Once you’ve made your investment, either in a low-cost tenders program or a higher-end bone-in program, how do you get the word out in your community?

Well, for starters, industry experts simply advise: Let them know what you’ve got.

Some stores might do best appealing to customers looking for a full meal for their families. This could mean offering products like full-size chicken sandwiches or an eight-piece chicken dinner with sides — products you might normally associate with supermarkets.

“Additionally, convenience store retailers should promote other factors that impact consumers’ decisions about where to purchase on-the-go foods by highlighting product quality, freshness and value,” Ramsey pointed out.

Branded visibility goes a long way in the consumer’s mind, noted Vendette. In c-stores, “you don’t have a lot of browsers; they’re usually on a mission. And a properly branded program helps the consumer be comfortable in making that impulsive decision.”

“Retailers would benefit from exploring different breaded/battered coatings such as tortilla crumbs, beer batter, parmesan crust, panko (Japanese bread crumbs), coconut, sriracha, or even whole-grain for retailers looking to take a better-for-you position.”
— Mathew Mandeltort, Eby-Brown Co.

“Chicken nuggets, wings and tenders lend themselves to on-trend, customer-driven customization. This can include incorporating a variety of ethnic or regionally based sauces/glazes that customers can use to enhance the basic product offering.”
— Chad Vendette, The Broaster Co.

“A chicken tender offering is one of the easiest first steps a convenience store retailer can take when expanding their foodservice offerings. For the convenience store consumer, chicken tenders work well as they are handheld, portable and familiar given they are already part of the quick-service and fast-casual landscapes. For convenience store retailers, chicken tenders are an item that heats easily and offers a quality product.”
— Rob Ramsey, Tyson Convenience