Value-added chicken has its day in recession

August 11, 2009

Bad news for most is nearly always good news for someone.

Bad news for most is nearly always good news for someone. This truism favored value-added chicken during a recent 52-week period. American households' budgetary troubles made them eat at home more, and the higher demand led to higher prices per pound and dollar sales gains for this high-flying category.

The family desire for convenient, tasty center-plate chicken meals had households make room in their kitchens for cuts that were marinated, seasoned, stuffed, in strips, on kabobs, or in the form of roasters, fryers/broilers, or stewing chickens. All value-added chicken subcategories but one grew in U.S. dollar sales during the 52 weeks ended March 28, 2009, according to the Perishables Group, a Chicago-based market research firm that tracks and analyzes retail sales data of fresh foods in grocery stores representing 61.4% of national supermarket ACV share.

The two hottest subcategories were value-added whole chicken and wings:
•    Whole chicken was the only one to increase both dollars and volume while the average retail price rose in the latest 52 weeks. Dollar sales rose by 22.9% to $17.1 million from $13.9 million a year earlier, while volume soared by 20.8% to 8,043,614 pounds from 6,657,987 pounds a year ago. Concurrently, the average retail price rose by 1.8% to $2.13 from $2.09.
•    Chicken wings posted the highest percentage volume growth (109.5% to 6,837,040 pounds from 3,263,809 pounds the year before) while the average retail price dropped by 17.8% to $2.49 from $3.02 in the prior year. The result was a hefty 72.3% surge in dollar sales to $17.0 million from $9.9 million in the previous 12 months.

The rest of the value-added chicken category turned in mixed results:
•    Chicken breasts rang up a 3.5% dollar sales increase to $136.7 million from $132.1 million a year earlier. A 6.3% retail price rise to $4.42, up from $4.16 a year ago, drove the overall dollar growth, since shoppers shifted to less expensive cuts and volume slipped by 2.7% to 30,936,097 pounds from 31,783,116 pounds the year before, the data show.
•    Meanwhile, the two least costly chicken parts - legs/drumsticks and thighs - represent the smallest contribution to total category sales, and they eked out comparatively small dollar sales gains in the latest 52 weeks. For example, the legs/drumsticks posted the third-highest poundage at 9,634,072 pounds on a 4.5% gain, but its low $1.45 price (down 0.5% from $1.46) enabled it to post only a 4.0% gain in total dollar sales to $14.0 million. By contrast, thighs rang up a meager 0.8% dollar sales gain to $3.3 million, on the strength of a 12.4% retail price rise to $1.95 (up from $1.73), since volume fell 10.3% to 1,695,211 pounds.
•    The 'other' chicken subcategory was the only loser in total dollar sales, down 7.7% to $53.8 million. Nonetheless, it held its number two category position despite a 13.9% volume decline to 10,354,769 pounds and a 7.2% retail price rise to $5.19.