It's two pieces of bread, a piece
of fried chicken, dill pickles and a squirt of mayo. Who would have thought
such a humble sandwich could set off a fast-food war. In fast food, Chick-Fil-A has
long dominated the chicken sandwich. This simple sandwich is part of what
propelled Chick-Fil-A to its spot as the third biggest fast-food
chain in the U.S., despite being closed on Sundays. Chick-Fil-A's race to the top has
scared even McDonald's, whose U.S. franchisees asked corporate to develop
a worthy competitor to Chick-Fil-A's sandwich. In the summer of 2019, a formidable
opponent to Chick-Fil-A emerged — and it wasn't McDonald's. Popeyes Louisiana Kitchen introduced its
crispy chicken sandwich and conflict started to brew. The sandwich challenged Chick-Fil-A's dominance
in the chicken sandwich category and fast foods' biggest
names got into the battle. Popeyes sold out of the chicken
sandwich in about two weeks. During that time, analysts say
other chicken chains, including Chick-Fil-A, lost customers
to Popeyes. Americans are ordering and eating more
chicken now than ever before. In a highly competitive industry like
fast food, brands are racing to stake their claim. Chains that have
long relied on chicken like Chick-Fil-A and Popeyes are in
prime position for victory. Others, like hamburger-focused McDonald's, have
missed out on dollars spent by chicken hungry fans. One thing is clear: Fast-food customers
want chicken sandwiches and the trend doesn't seem to be slowing. Now the big chains are duking it
out to deliver, despite supply chain issues and fierce competition. Part of Chick-Fil-A's brand messaging has
been that it didn't invent the chicken, just the chicken sandwich,
but American studies professor Psyche Williams-Forson says people have been eating
this type of sandwich as long as they have been
eating bread and poultry. There's evidence that lots of early
colonial households who could afford the ingredients to make bread and would
have any kind of bird, would eat bread and bird together. How they did that? You know, it's not necessarily known. And of course, on through the centuries, we
end up with what we know to be the sandwich and the
chicken sandwich at that. And competition around the chicken
sandwich isn't exactly new either. Ebony magazine searched black newspaper archives
and found ads for the chicken sandwich, going back to
as early as 1936. Chick-Fil-A's founder S. Truett Cathy
invented the chain's original chicken sandwich in 1964. That sandwich was made of a boneless
chicken breast, breaded and fried in peanut oil, and served on a
toasted buttered bun with pickles. The first Chick-Fil-A opened in 1967 and
the chain has been closed on Sundays since then. Despite that, Chick-Fil-A is the third
biggest restaurant chain in the U.S. by system wide sales and reported
more than $10 billion in revenue in 2018. For comparison, Popeye's
pulled in $3.7 billion in sales in 2018, making
it the 25th largest U.S. chain. When Popeye's parent
company, Restaurant Brands International, quietly discussed a new menu item in
its May 2019 Investor Day, it didn't know that the product's launch
would cause such a frenzy. It was the first time in its
nearly 50-year history that Popeyes offered a chicken sandwich that
was available nationwide. In the past, its menu tended
to focus more on bone-in products. This sandwich is a white meat breast
fillet, pan-battered and breaded in a buttermilk coating served on
a brioche bun. There is one version with regular
mayonnaise and another with spicy mayo. Popeyes rolled out its sandwich
on August 12th, 2019. One week later, this sandwich set
off a virtual confrontation between some of the biggest names in fast food. Chick-Fil-A tweeted an equation suggesting
that its sandwich was the original and the best. Popeyes had a simple, but
pointed response to Chick-Fil-A. Y'all good? Their check-in prompted other
chicken brands to get into the conversation. Soon, Wendy's and Shake Shack
jumped into the Twitter feud, too. This is what people love to see. They love to see kind of folks going
at it and in a fun and competitive way, of course. This is the reality
TV series happening in real time with real companies in real dollars and
real delicious food at stake. Those tweets set off a social
media firestorm and nearly doubled Popeyes Twitter followers from
100,000 to 180,000. A marketing group estimated that
Popeyes received over $65.1 million dollars in equivalent advertising
value for media mentions between August 12th and August 27th. The sandwich's impact was bigger than
just raising Popeyes profile with consumers. It was also a boon to
Popeye's bottom line, thanks in part to the chicken sandwich, sales at stores opened
more than a year grew by 9.7 percent in the third quarter
of 2019, compared to .5 percent growth in Q3 of 2018. One analyst estimated that Popeyes sold
about a 1,000 chicken sandwiches a day and that the sandwich accounted for
about 30 percent of sales while it was available, at least. After about two weeks with the
chicken sandwich on the menu, Popeyes around the country
started selling out. It simply ran out of chicken fillets. Fans started posting pictures of handwritten,
sold out signs on Popeyes' doors and drive-thru menus. Popeyes was even hit with a lawsuit
by an angry customer for selling out of the sandwich. You saw Popeyes' market
share more than double and then you did see a dip in foot
traffic share at Chick-Fil-A, McDonald's, Burger King and Wendy's. You know that the
the actual infamous y'all good tweet happened just as Wendy's was launching
their spicy chicken sandwich and and just as Burger King was
launching the Impossible Whopper nationally. So it sort of took the steam out
of those promotions for for a few short days. But the positive impact of
Popeye Sandwich wasn't limited to just that chain. The third quarter is the
most important part of the year for fast-food companies because it includes
the summer months, a crucial selling season. It was a very successful
third quarter for fast food in general. I think it was probably the
most fastest sales growth in several years. And the chicken sandwich has
some responsibility for that sector wide growth. Hype around Popeyes' national
release of its chicken sandwich actually benefited its competitors. Chicken-focused fast food restaurants like
KFC and Chick-Fil-A saw traffic spike in late August 2019. Over a typical summer weekend, Popeyes,
Chick-Fil-A, Zaxby's and KFC would get about 8.3 million visitors, according to foot
traffic analytics platform Pacer.ai. But at the peak of the Chicken
Sandwich War, the chains had 10.1 million visitors over a weekend. And now Popeyes has
brought its sandwich back. Its nationwide launch on November
3rd, 2019 saw huge crowds. Traffic at Popeyes that day rose
almost 300 percent higher than normal. One analyst estimated at busy Popeyes
locations sold up to 1,500 chicken sandwiches per store every day for the
first 10 days the sandwich was back, effectively doubling sales
volume at those stores. And Popeyes' competitors are
racing to keep up. In July 2019, McDonald's U.S. franchisees asked the company to add
a southern-style chicken sandwich to rival Chick-Fil-A's. Franchisees said McNuggets and McChicken
sandwiches weren't enough to compete in the premium
chicken sandwich category. On an earnings call, McDonald's said it
missed out on some business in chicken. In December 2019, Mcdonald's started
testing a crispy chicken sandwich, officially entering the
chicken sandwich wars. Well they said on their conference
call that they actually lost share during in the chicken segment, but
they gained share in the burger segment. So clearly, this is an issue
for them that they're looking to correct. The franchisees have been asking
for a premium chicken sandwich for some time. You know, the
sandwich isn't likely to be hand-breaded, hand-battered the way it
is at Popeyes. So McDonald's will have to find a
way to win on their core advantages, which is speed,
convenience and value. The war is far from over. And if I were to make a
longer-term prediction, I would not predict that Chick-Fil-A would be a loser
in that chicken war overall. There's so much momentum behind the growth
of that company and so much brand equity that it just resonates
with consumers young, old and everywhere in between in
a lot of ways. For decades, hamburgers have been
Americans' sandwich of choice on fast-food menus. Now chicken sandwiches are stealing
some of the spotlight. Chicken sandwiches remain number two, but
they are gaining ground with consumers faster than burgers are. According to market research firm NPD
Group, for the year ended February 2019, four billion chicken sandwich
servings were ordered at U.S. restaurants. During the same time period,
burgers were more popular with 8.6 billion ordered, but chicken sandwich
orders were up four percent while burger orders stayed flat. On average, diners still purchase
burgers more frequently than they purchase chicken sandwiches. But burger makers shouldn't
rest too easy. In general, chicken consumption
is on the rise. From 1960 to 2018, per capita chicken
consumption has risen 235 percent to 93.8 pounds a year. During the same time period, per capita
consumption of beef has fallen 9.6 percent. 1991 was the last year
people ate more beef than chicken. In 2018, Americans ate about 94 pounds
of chicken compared to 57 pounds of beef. That's a pretty dramatic difference in
that, you know, and that's a reversal from 40, 50 years ago. This was not always the case. And it goes to show what
technological progress and changes in consumption habits, those combination of factors can
do to change our diets. Analysts point to three main factors
that have contributed to higher chicken consumption: health concerns, technological
advances and a growing population. The National Institutes of
Health and the World Health Organization have linked red meat consumption
to heart disease and cancer. Some have pointed to white meat like
chicken and fish as a healthier alternative. Technological advances have also
made it possible to produce larger chickens more quickly, and the
price of chicken has fallen in recent years. If you look at what's
happened to the price of chicken relative to say beef, it's fallen by
about 45 percent over the last 20 years. So today chicken is about a third
of the price of beef at the retail level. A similar thing
has happened for pork. So today, chicken is about
half the price of pork. But in the chicken sandwich war,
not all chicken is created equal. Some pieces are better
for sandwiches than others. Most fast food chains rely on breast
meat for its sandwiches, which is typically more expensive than
chicken wings or thighs. Fast-food restaurants have offered chicken
items for years, but analysts say this social media feud attracted
a new generation of consumers. Certainly the generation that follows social
media might might go into a fast-casual restaurant. You know, maybe your Chipotle consumer
or your Shake Shack consumer doesn't really look to traditional fast food
as having a, you know, high quality, upper-level experience and so by
having a product that is of that, you know, that that rivals the
chicken shack will bring in a generation that's probably never eaten
a Big Mac before. Burger orders may be flat. But despite attracting a new
audience, analysts don't think chicken sandwiches will pull ahead of
burgers any time soon.
