The Exchange

Wings' world: Once an afterthought, chicken wings score with the masses

If you're an average American, you'll eat in the neighborhood of 90 chicken wings this year.

Whether you do that in one sitting or not, each wing you consume will get us all closer to reaching the National Chicken Council's expectation that, collectively, 27 billion wing segments consisting of drumettes and flats will be sold in the U.S. in 2014. That's north of 3 billion pounds' worth.

Since the Anchor Bar in Buffalo, N.Y., started it all in 1964, the wing has become a finger-food staple. Restaurant data research firm GuestMetrics noted that, in 2012, chicken wings were a menu star. While food sales at restaurants that year grew nearly 1%, chicken wings markedly outpaced the group, climbing 10.7%. Of that, 7.3% came via a higher number of orders, whereas 3.4% was a result of price hikes following an increase in wholesale purchasing costs.

Tom Super, vice president of communications at the NCC, a trade association for the chicken industry, says several factors have contributed to wings getting where they are today, including their affordability and changes in consumer preferences.  "But then pubs and bars, and to some extent pizza places, found out that they could put them on the menu and other items would increase in sales as well," he says.

Yes, wings, which began as a cheap byproduct to breast meat, are prepared all salty and hot, which just happens to make greater quantities of items such as beer seem like a good move. At the same time, wings make for easy sharing among family and friends, and that "social" aspect comes up repeatedly in talking to wing people. The sports bar operator Buffalo Wild Wings (BWLD) has capitalized on these truths perhaps like no other, recently surpassing 1,000 stores. And about 22% of its restaurant sales come from alcohol.

A seller that's evolved into one of the biggest players in the arena isn't even about wings, historically speaking. That would be Pizza Hut, the largest U.S. pizza chain by unit count. It launched WingStreet in 2003, and it's now surpassed 5,000 locations. Last year the company, part of Yum Brands (YUM), sold customers more than 616 million wings. It wants to go bigger.

"We're in this business for the long haul," says Jared Drinkwater, senior director of marketing at Pizza Hut. "We want to continue to aggressively grow it."

To do so, it will be up against substantial competition. Rivals Domino's (DPZ) and Papa John's (PZZA) sell wings. There's the aforementioned Buffalo Wild Wings. Wingstop is expanding. There are smaller chains such as Wing Zone and Bonchon. Brinker International's (EAT) Chili's sells wings. Pizza Hut's sister company KFC does, too. McDonald's recently (MCD) rolled out Mighty Wings. Local wing purveyors can be found everywhere. It's starting to feel like wing mania knows no end.

Chicken for all times

The days around the Super Bowl reign supreme for wing consumption. This year, the NCC projected 1.25 billion wings would be consumed in conjunction with the NFL championship game. However, Super says that, more recently, wings demand has been holding steadier throughout the year. These days, they're associated not only with football's biggest game but also March Madness and then summer grilling season. Once that ends, we're already back into football.

Buffalo Wild Wings may be helping this connection considerably, practically acting as a proxy advertiser for the entire industry. The vast majority of American towns don't have one of its stores, but what they do have are other bars and restaurants sporting their own TVs and local patrons who think wings and games go together.

Also clearly important here are the facts that Americans are eating more chicken the per capita estimate is 85 lbs. this year vs. 34 lbs. in 1965 and that wings are a fairly cheap protein choice. The latest Consumer Price Index, for instance, notes that fresh and frozen chicken part costs rose 2.2% year over year in February, a lesser climb than beef and veal, pork, seafood and even fresh whole chickens. Wholesale wing prices did advance considerably through 2011 and 2012, peaking above $2/lb., but they've come back down to about $1.30.

For the most part, chickens are raised for their breast meat in the U.S., not specifically for wings, Super says. This year, the NCC is expecting production to rise, in part owing to lower feed costs. Naturally, that means the supply of wings is going to be tied directly to production. "You're not going to increase your production of a whole bird just to produce the wings," Super says. Clearly, though, what once was an afterthought is now a major player.

Wings Hut

As for Pizza Hut, Drinkwater says it's always going to be about pizza primarily, yet wings have snagged a substantial slice of the pie at a company that had $5.7 billion in domestic system sales last year. For its 500 or so corporate stores, he says, around one in every four pizza orders is accompanied by an order of wings.

Though he wouldn't provide specific numbers regarding the revenue performance of WingStreet, Drinkwater says the wings business has had regular positive same-store sales growth. That suggests wings may be more necessary than ever to the chain, considering Pizza Hut's overall U.S. comparable sales were down 2% last year.

Pizza Hut is now, for the first time, undertaking a national ad campaign. "We felt like we needed at least 80%, if not more, of our system fully converted into WingStreet equipment and restaurants to turn on the switch nationally," Drinkwater says.

Millennials, an important group for restaurants who are widely seen to be in constant search for healthier foods or new flavors, have also played into the greater penetration of wings, Drinkwater says. Additionally, because chicken is broadly viewed as healthier than red meat, that's probably helped wings gain greater favor, says Rebecca Miller, director of brand marketing for WingStreet.

"I think that's a big reason why we've seen wings and chicken in general skyrocket over the past few years," she says. "And we expect it to continue to grow."

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