The American Chicken Business: State of the Industry 2005

Remarks by Tom Shelton, Chairman of the National Chicken Council

Food Editors Seminar of the National Cooking Contest
Charlotte, NC

Good afternoon. I am pleased to offer today a brief report on the state of the chicken industry. I am happy to say that because of strong consumer demand, continuing product innovation, and the fact that chicken is uniquely suited to the lifestyle of Americans today, the state of our industry is excellent.

Social and demographic trends in recent years tend to favor our business. Consumer demand continues to be very good. People simply like chicken. We estimate that American consumers this year will purchase approximately 26 billion pounds of chicken — an amazing 87 pounds for every man, woman and child in the U.S.

As you know if you have attended some of these seminars in the past, the consumption figure has continued to increase over the years. Americans are now eating twice as much chicken per person as they did in 1977.

Most of the chicken Americans eat is still cooked and eaten at home. A solid majority of the chicken people eat — approximately 58 percent — is purchased at grocery stores, club stores, and other retail outlets at which people buy food for home preparation and consumption.

The average family of four will put more than two hundred pounds of chicken in the grocery cart this year. That number has been going up steadily in recent years. For example, in 1990 a family of four purchased about 145 pounds of chicken at the grocery store, and 180 pounds in 2001. That is a lot of chicken to take home from the store! Clearly Americans are still willing to prepare their own meals, especially if it includes chicken. The death of home cooking has been greatly exaggerated!

As we all know, however, the typical American household is a busy place in which both adults are most likely employed outside the home and family members have to juggle jobs, school, sports, and a host of other activities.

Mealtime has gotten caught in a squeeze. People still prepare most of their meals at home, but spend less time doing it.

Younger people in particular are much less likely to start a meal from scratch the way their mothers used to do it. Everyone appreciates a home-cooked meal, but many people don’t have the time to do it.

As a result, the definition of cooking itself is changing from scratch cooking to meal assembly.

The objective is to put a tasty and nutritious meal on the table, and chicken fills the bill perfectly. Chicken is tasty and nutritious, it’s economical, it’s easy to cook and hard to ruin.

Our industry has responded with a wide variety of convenience-oriented products, and that is one reason why demand for chicken has continued to grow. We are providing more partially and fully prepared individual items and entrees than ever before, both fresh and frozen. We are also adding more convenience through deboning of both dark and white meat, marination, sizing, and packaging.

In addition, chicken is a major player in the carry-home market, with items such as whole rotisserie-roasted chickens that consumers can buy fully cooked and take home for dinner.

Today, about half the total food dollar is spent outside the home, ranging from fast food, school and school cafeterias and other institutions to the finest white-tablecloth restaurants. The growth of out-of-home dining has also been very good for the chicken business.

Chicken is the most versatile food at the center of the plate and easily adapts to a wide variety of presentations. Chicken choices at restaurants have continued to grow and diversify as Americans eat more meals out-of-home.

Restaurants and Institutions magazine takes a survey every two years to see what is really on the menu at restaurants of all types nationwide, including fast food, institutional services, casual dining, family restaurants, and fine dining. We worked with the magazine to pull out data specifically about chicken from the 2003 survey, the latest available.

What do you suppose is the single most prevalent chicken item on the menu at restaurants nationwide? It is a classic combination item with leafy green vegetables beneath and chicken on top. Yes, Caesar salad with chicken is the Number One chicken item at restaurants in the United States. Two-thirds of restaurants of all types have Caesar salad with chicken on the menu.

Data from other sources indicate that Caesar salad with chicken is actually gaining in popularity. Our friend Harry Balzer at NPD Group keeps track of these things. He says that during the 12 months ending in February 2005, restaurant orders of all types were up only two percent over the prior 12 months, but that orders for Caesar salad with chicken were up nine percent. With that type of growth, I’m sure we will see it on even more menus.

Chicken strips and tenders are the second most-prevalent item, on the menu at 50 percent of all restaurants, followed by chicken noodle soup at 44 percent and grilled chicken breast sandwich at 43 percent. Chicken wings and grilled chicken breast are both on the menu at 39 percent of restaurants.

If you consider only casual dining restaurants — places like Chili’s, TGI Friday’s, Olive Garden, and many others — chicken wings are at the top of the list. Some 66 percent of those establishments put chicken wings on the menu. Typically they are served as an appetizer. Our impression is that chicken wings are among the most popular appetizers in the U.S.

The runaway success of chicken wings as appetizers has been a tremendous opportunity for our industry. We estimate that last year more than 18 billion chicken wing segments were sold in foodservice — about 60 wing pieces for every person in the U.S.

At quick-service restaurants — defined as fast food and other places with counter service — chicken strips and tenders are the #1 item, on the menu at 87 percent of those establishments. Not far behind are grilled chicken breast sandwich at 82 percent and breaded chicken breast sandwich at 81 percent. Chicken nuggets are on the menu at 61 percent of quick-service restaurants.

In closing, overall demand for chicken in both retail and foodservice has continued to grow. Demand for chicken was especially strong last year due to the impact of low-carbohydrate diets. Even when the diet fad largely faded in the middle of 2004, demand for chicken remained strong, giving chicken companies a very good year last year. The current year has gotten off to a good start and is so far continuing to look like a strong year.

As always, chicken company executives are looking for ways to increase of share of the market. We know that we already have an excellent product that is popular with consumers in the United States and around the world. We continue to develop products that will complement today’s changing lifestyle and meet the demands of consumers for food that is quick and easy to prepare. All the trends in our domestic market continue to point to good times ahead for the chicken business.

Tom Shelton is an industry veteran and CEO of Case Foods, Inc., a diversified chicken production and processing company. He was elected chairman of the National Chicken Council in October 2004.

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