Flying high

by Steve Bjerklie
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Has the world gone mad? Snoop Dogg thinks he can replace Oprah Winfrey. Teenage vampire movies rule the box office. The U.S. dollar can’t buy even a bite of a croissant in Paris. But perhaps the ultimate sign that the world, or at least the poultry market, has indeed gone crazy is this: pieces of boneless, skinless chicken breast meat are being sold in some restaurants, including fast-food giant Wendy’s, as “boneless wings.” Imagine filet mignon marketed as oxtail or pork chops sold as pig’s feet. It’s that weird.

“What’s going on now is truly extraordinary,” says Richard Lobb, spokesman for the National Chicken Council. In the past, breast meat has sold for as much as a 90-cent-per-pound premium over wings, but over time the premium has eroded to nothing and then to negative territory.

“Last time I checked, which was this morning, the market price for wings was $1.56 a lb., which may be the highest price for wings ever. Skinless, boneless breast were at $1.31 a lb. – and that’s an uptick,” Lobb adds. Bill Roenigk, senior vice president and chief economist for the council, underscores Lobb’s point: “The demand for wings from casual dining restaurants, carryout stores and retail groceries is extremely strong. Even export demand is adding to the market strength.”

A year ago, the price spread between breasts and wings was about 40 cents per lb. in favor of breasts; Lobb describes the price flip-flop as a “jolting drop” for the industry. On the foodservice side, the sudden price reversal has wing-specialty restaurants scrambling to secure supplies while at the same time struggling to keep a lid on menu prices for what has traditionally been a value-priced item. That’s why restaurants are willing to buy and rebrand breast meat as boneless wings: it broadens the supply, and they’re actually making money on the strange misnomer.

Wings, says Lobb, “are just something people really like.”

Processors ‘winging it’

But even as wing prices have taken flight into the stratosphere, pleasing processors who are making money from a part of the carcass that used to be a break-even item at best, the wing boom is hiding broader problems in poultry pricing that worry industry executives. Processors interviewed for this article all asked that NCC do the on-the-record speaking for them, but quietly, each of them acknowledged the real situation isn’t that wing prices are flying high but the rest of the bird is, well, not getting off the ground. “There’s been a real drop-off in prices for everything else besides wings,” said one Southeastern processor. “And the thing is, the price of wings isn’t high enough to carry the whole chicken.”

“It’s a very complex picture,” adds Lobb. “Just because you push down on one thing doesn’t mean another thing is going to come up.”

Inside the plant, the wing boom hasn’t changed production, processors say, because a bird is a bird – the wing market, no matter what it does, can’t change the basic physiology of a poultry carcass. Where breeders can manipulate genetics and growth to respond to certain market signals – producing large-breasted chickens and turkeys, for example – the wing market isn’t demanding bigger or fatter wings, just more of them. Yet wings will always come into the plant at the same rate they always have: two by two.

“The challenge for this industry has always been that while we can modify our raw material somewhat, we can’t really change it. It is what it is. In a perfect world, we’d be making money on wings, breasts, thighs and feet – but I’ve never been in a perfect world, have you?” asks another processor. He chuckles: “Even then, we’d probably complain.”

The “affordable luxury”

A wing is a three-part item, featuring the drummette, the flat and the flapper, with the drummette, which has the most meat, setting the price. With a higher skin-to-meat ratio than any other part of the chicken, wings are higher in calories but carry more flavor than other chicken parts (An export market in China has developed for the nearly meatless flapper).

The true history of chicken wings as a stand-alone appetizer is intertwined with both fact and legend, and no one at this point can seem to agree on either the facts or the legend except that the birthplace of “Buffalo wings” is indeed Buffalo, N.Y. A restaurant name, John Young’s Wings ‘n Things, was registered in Buffalo in 1970, though some origin stories place the wing at the Anchor Bar in Buffalo as early as 1964. The city of Buffalo has taken advantage of its place in wing history and has hosted the National Buffalo Wing Festival since 2002. Last year’s festival drew more than 90,000 people who consumed 40 tons of wings. The festival actually began as a lark: in the 2001 film “Osmosis Jones,” the character Frank DeTorre, played by Bill Murray, makes plans to attend “the Super Bowl of junk food,” the National Buffalo Wing Festival – except no such festival yet existed. Inspired by the movie, a native Buffalonian, Drew Cerza, now known as the “Wing King,” got the festival off the ground.

The classic preparation includes frying or roasting, then covering the wings and drummettes in a goopy, sticky sauce. Traditional Buffalo wing sauce is made from vinegar, cayenne pepper and butter, but wings these days can be found floating in just about any kind of thick sauce. With former Dallas Cowboy quarterback, Troy Aikman as its pitchman, Wingstop, a wing-specialty chain based in Richardson, Texas, features “original hot, Cajun, mild, teriyaki, lemon pepper, Hawaiian barbeque, garlic parmesan and “atomic” sauces. The Wild Wing Café in Marietta, Ga., serves 25 different sauces for its wings.

Just as the preparations have multiplied exponentially, so, too, have the number of wing-specialty restaurants. NCC’s Lobb ticks off a few: Minneapolis-based Buffalo Wild Wings Grill & Bar with more than 600 locations; Wingstop, also more than 600; Atlanta’s WingZone takeout and delivery has more than 100 units in 20 states; Buffalo Wings & Rings, 60 units, based in Cincinnati; and Hurricane Grill & Wings, West Palm Beach, Fla., 30 units in Florida. Alliger’s House of Wings in Pennsylvania is one of the oldest wing restaurants, dating back to 1983. Hurricane Grill and Wings is newer, having been founded in 1995, and counts 30 units in Florida and Nevada. World of Wings, or WOW, offers “New Orleans inspired” wings at units nationwide.

The big bird in the room and the real market driver may turn out to be Pizza Hut: In the near future, as many as 5,000 Pizza Hut units will feature a stand-alone counter inside called WingStreet. Already, WingStreet is in 3,000 Pizza Huts.

“The wings-only concept has been very strong,” Lobb says, adding that his list doesn’t include the several dozen casual-dining chains, sports-bar franchises and other kinds of establishments (e.g. Hooters) that serve wings by the flock.

According to the National Restaurant Association, chicken wings, like a Starbucks latte, are considered an “affordable luxury,” which is why wings tend to do well in a down economy. “They’re an affordable treat, a reward for people at the end of the day or week,” comments Mike Donohue, vice president of the association. Their price-point allows for an experience that’s a cut above a fast-food meal but won’t further stress already stressed-out bank accounts. Lobb says he went into a sports bar recently with a friend for an evening of wing snacking and came out for less than $40 for the two of them.

Perhaps unsurprisingly for a food identified as a sports-bar appetizer, demand for wings soars in the weeks prior to the Super Bowl – four percent of all wings are sold on game day, according to restaurant industry numbers. Last year, wing restaurant owners feared a wing shortage as prices jumped upward at the same time that Pilgrim’s Pride, which processes up to a quarter of the chicken sold in the U.S. and is a major wing supplier, declared bankruptcy. Wing prices tend to increase three to four cents per pound leading up to the big game, but last January wing prices flew up 10 cents a pound.

Tom Hensley, president of Gainesville, Ga.-based Fieldale Farms, affirmed to attendees during a presentation at the 2009 International Poultry and Feed Expo that the football season finale is, indeed, a windfall for wing producers. “I wish we had a Super Bowl every week,” he said just days before the 2009 NFL showdown this past February.

More staying power?

Processors are perhaps understandably cautious about placing too many hopes on wings to lift the poultry market as a whole – the current wing boom is nothing new, in fact. “Back in 2004, wing prices went through the roof,” points out Lobb, “so we’ve seen this before. Back then, when McDonald’s decided to feature wings, the whole market went crazy.” He says the current boom, however, “will have more staying power than the previous one,” because demand is wider spread among restaurants and because the popularity of wings has shown no sign of diminishing.

According to NCC data, more than 13 billion chicken wings (2.8 billion pounds) will be marketed as wings (as opposed to the wings on whole chicken or breast quarters) in 2009. Of this total, 9.5 billion wings (2.0 billion pounds) will be sold through foodservice channels. Another 3.5 billion wings (800 million pounds) will be sold in retail grocery stores. The doubling in size of the basic chicken over the past 40 years – today’s average chicken weighs five pounds; in Julia Child’s day the standard was two-and-a-half to three pounds – hasn’t impacted wings much, Lobb notes. “The big birds happened primarily because of the market for deboned chicken,” he says, aided by high prices for breast meat. Though breast prices have fallen steeply, the deboned market remains strong, driven by nuggets. Genetically increasing the size of birds didn’t add much meat to wings, however.

Nonetheless, he says that in recent conversations he’s had with processors he’s sensed a bit of optimism that was absent earlier in the year, and wings comprise part of the reason. “At our annual conference this year” – held in early October – “I heard processors say they were feeling better and were more comfortable with their prospects than they were a year ago.” For one thing, production should be lower this year than last, which will help boost prices. But wings, too, are helping. “Wings right now are a very strong note in an otherwise challenging market,” he comments. “They haven’t brought about any big structural or processing changes, but they are bringing in some much-needed income.”

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