Foodservice operators who can make adjustments to their menu are often at an advantage. The Chicken Big Mac is an example of a foodservice operator adjusting its menu in favor of more affordable proteins, says Circana's Chris DuBois, Executive Vice President of Fresh Foods practice.
As chicken continues to be a more affordable protein option than beef, you can expect to see more foodservice establishments “substituting” chicken for beef, according to DuBois. He spoke about protein price trends during the webinar, “What’s at the Center of the Plate This Holiday Season,” hosted by CoBank.
The price of beef is now at the top of the “price thresholds.” And with many consumers opting to eat at home instead of eating out for affordability reasons, that also creates a challenging environment for restaurants and other foodservice establishments.
“What’s driving the foodservice cost gap and what’s driving the retail piece? It’s really all about the cost of a meal,” said DuBois. “If you go to McDonald’s, it’s not cheap. If you go to Panera, it’s not cheap.”
Some restaurant businesses are thriving, DuBois said, while others such as Red Lobster, have filed for bankruptcy.
The restaurants that can make menu adjustments -- such as relying less on more expensive proteins like beef and more on less expensive proteins like chicken -- are often the ones that do well financially.
“A lot of times you’ll see proteins being substituted. The Chicken Big Mac was not just a random experiment. That’s a way of substituting different proteins that can drive a better cost of goods, in a sense. So more and more you’re going to see chicken substituted for beef at foodservice,” DuBois said.
EDITOR’S TAKE:
After several years of inflationary pressure and higher prices for most items in the grocery store or restaurants, consumers are making difficult decisions about substituting items in their daily diet. We have reported many times about short supply conditions in the beef industry that have led to higher prices at the producer and consumer levels. It now appears that some consumers and restaurant owners have reached that threshold where, despite strong preferences for beef, they are deciding to opt for lower (relatively speaking) priced protein, such as chicken. This is not an unusual phenomenon. When push comes to shove, something is going to give and the next level preference takes over. Ultimately, expanding demand for chicken, for instance, will drive prices for that choice higher. Lower demand for beef will eventually lead to a lower equilibrium price. In the meantime, be sure to promote your inventory on AgTruckTrader.com®. That way both poultry and beef producers will see what you have to offer!
