KFC, Other Chains Hunt for Elusive 4-Pound Chicken

Some fast-food chain executives say the smaller-size birds that are often used for sandwiches and chicken-on-the bone offerings are more tender and flavorful than their bigger counterparts. Chick-fil-A, the biggest U.S. chicken chain by sales, has long relied on small birds for its sandwiches.

However, rising demand in recent years from restaurants and places like convenience stores—coupled with chicken companies’ longtime focus on more profitable big birds—is driving up costs for restaurant operators. 

“What happened was the chicken sandwich…it just became much tougher for us to find that small bird,” said

Dan Shapiro,

chief executive of food-service chain Krispy Krunchy Foods. The company sells small bird products at roughly 2,700 convenience stores and some stadium concession stands in the U.S.

KFC, the second-biggest U.S. chicken chain by sales, said in internal messages to U.S. franchise owners earlier this year that it expected fresh chicken on-the-bone used for the chain’s trademark buckets to drive cost increases for franchisees this year. The chicken company, owned by

Yum Brands Inc.,

YUM 0.32%

said that contributing to the supply imbalance were poultry producers converting plants to handle larger-size birds, instead of the smaller varieties used for KFC’s fresh poultry orders.

“This shift in supply has put pressure on both product availability to support our business as well as product cost,” KFC’s supply cooperative said in a message to operators in March.

A KFC spokeswoman said the chain was confident its suppliers would meet its demand for chicken. Chick-fil-A Chief Executive

Andrew Cathy

said in an interview earlier this year that it had adequate supply of small birds and expected that to remain so in the future.

Some restaurants are pressing their suppliers to expand production of the lighter-weight chickens. KFC said it was in discussions with its suppliers to help meet its chicken on-the-bone needs though the chain recently approved use of a slightly larger bird in several markets across the country because of costs and short supplies of smaller birds.

Chicken suppliers such as

Tyson Foods Inc.,

Pilgrim’s Pride Corp.

and Wayne-Sanderson Farms, have been hesitant to produce the smaller chicken over the years because the birds are less profitable than larger ones that produce more meat per bird, according to poultry executives and industry analysts. 

The costs to produce a 4-pound bird and an 8-pound bird are similar, but when chicken prices go up, the larger, meatier bird is more lucrative for processors, said Tom Elam, president of FarmEcon LLC, an agricultural consulting firm. 

Chicken processors shifted toward producing larger birds years ago, tightening the supply of the smaller 4-pound chicken, executives said. The number of small chickens slaughtered weekly is down from nearly 30% of the market in 2005 to about 15% in 2023, according to U.S. Agriculture Department data.

Chicken meat generally was in short supply coming out of the pandemic, as demand outpaced production across the industry, sending breasts and wing prices soaring. In recent months, meatpackers have staffed up processing lines, and prices have fallen for the more widely produced big birds. 

Boneless, skinless breast-meat prices for big birds, the poultry industry’s flagship product, fell from $3.50 a pound in May of last year to about $1.50 by March, according to research firm Urner Barry. 

Restaurants buying the tinier birds haven’t gotten the same price break, as the cost for small-chicken boneless breasts has remained relatively high since January 2021, peaking at about $4.30 during the summer of 2022 before falling to about $2.50, according to Urner Barry. 

Even though smaller birds are generally less volatile in price, reconfiguring plants to process a smaller bird is expensive and risky because chicken companies rake in higher profits when large-bird prices rise, said analysts and chicken officials. 

Chicken companies usually produce small birds at dedicated facilities for specific customers. For instance, Wayne-Sanderson Farms, the third-largest U.S. chicken processor, converted some of its facilities in southern Alabama to small-bird production to meet demand for an individual customer several years ago, it said.

Pilgrim’s Pride, the second-largest chicken company, said in 2022 that it was expanding its plant in Athens, Ga., to process more small birds. CEO

Fabio Sandri

has said the expansion will increase the plant’s small-bird capacity by 20% to 30%. A company spokeswoman said it bases its investments on customer needs and what consumers want.

Mr. Sandri said on a February quarterly earnings call with analysts that Pilgrim’s small-bird business, which includes birds under 5 pounds, has helped boost company profits as large-chicken prices decline. 

“We continue to see more and more demand,” he said about small birds.

The shortfall of small chickens has increased competition, and prices, for the available supply, restaurant operators said. 

While Krispy Krunchy hasn’t had shortages yet, Mr. Shapiro, the CEO, said he was concerned that in a few years the large fast-food chicken chains will hog the tight supply of small birds. He said the company is exploring different alternatives for the small bird meat. 

“We’ll have to see what things look like as we go into 2024,” he said.

Write to Patrick Thomas at [email protected] and Heather Haddon at [email protected]

Some fast-food chain executives say the smaller-size birds that are often used for sandwiches and chicken-on-the bone offerings are more tender and flavorful than their bigger counterparts. Chick-fil-A, the biggest U.S. chicken chain by sales, has long relied on small birds for its sandwiches.

However, rising demand in recent years from restaurants and places like convenience stores—coupled with chicken companies’ longtime focus on more profitable big birds—is driving up costs for restaurant operators. 

“What happened was the chicken sandwich…it just became much tougher for us to find that small bird,” said

Dan Shapiro,

chief executive of food-service chain Krispy Krunchy Foods. The company sells small bird products at roughly 2,700 convenience stores and some stadium concession stands in the U.S.

KFC, the second-biggest U.S. chicken chain by sales, said in internal messages to U.S. franchise owners earlier this year that it expected fresh chicken on-the-bone used for the chain’s trademark buckets to drive cost increases for franchisees this year. The chicken company, owned by

Yum Brands Inc.,

YUM 0.32%

said that contributing to the supply imbalance were poultry producers converting plants to handle larger-size birds, instead of the smaller varieties used for KFC’s fresh poultry orders.

“This shift in supply has put pressure on both product availability to support our business as well as product cost,” KFC’s supply cooperative said in a message to operators in March.

A KFC spokeswoman said the chain was confident its suppliers would meet its demand for chicken. Chick-fil-A Chief Executive

Andrew Cathy

said in an interview earlier this year that it had adequate supply of small birds and expected that to remain so in the future.

Some restaurants are pressing their suppliers to expand production of the lighter-weight chickens. KFC said it was in discussions with its suppliers to help meet its chicken on-the-bone needs though the chain recently approved use of a slightly larger bird in several markets across the country because of costs and short supplies of smaller birds.

Chicken suppliers such as

Tyson Foods Inc.,

Pilgrim’s Pride Corp.

and Wayne-Sanderson Farms, have been hesitant to produce the smaller chicken over the years because the birds are less profitable than larger ones that produce more meat per bird, according to poultry executives and industry analysts. 

The costs to produce a 4-pound bird and an 8-pound bird are similar, but when chicken prices go up, the larger, meatier bird is more lucrative for processors, said Tom Elam, president of FarmEcon LLC, an agricultural consulting firm. 

Chicken processors shifted toward producing larger birds years ago, tightening the supply of the smaller 4-pound chicken, executives said. The number of small chickens slaughtered weekly is down from nearly 30% of the market in 2005 to about 15% in 2023, according to U.S. Agriculture Department data.

Chicken meat generally was in short supply coming out of the pandemic, as demand outpaced production across the industry, sending breasts and wing prices soaring. In recent months, meatpackers have staffed up processing lines, and prices have fallen for the more widely produced big birds. 

Boneless, skinless breast-meat prices for big birds, the poultry industry’s flagship product, fell from $3.50 a pound in May of last year to about $1.50 by March, according to research firm Urner Barry. 

Restaurants buying the tinier birds haven’t gotten the same price break, as the cost for small-chicken boneless breasts has remained relatively high since January 2021, peaking at about $4.30 during the summer of 2022 before falling to about $2.50, according to Urner Barry. 

Even though smaller birds are generally less volatile in price, reconfiguring plants to process a smaller bird is expensive and risky because chicken companies rake in higher profits when large-bird prices rise, said analysts and chicken officials. 

Chicken companies usually produce small birds at dedicated facilities for specific customers. For instance, Wayne-Sanderson Farms, the third-largest U.S. chicken processor, converted some of its facilities in southern Alabama to small-bird production to meet demand for an individual customer several years ago, it said.

Pilgrim’s Pride, the second-largest chicken company, said in 2022 that it was expanding its plant in Athens, Ga., to process more small birds. CEO

Fabio Sandri

has said the expansion will increase the plant’s small-bird capacity by 20% to 30%. A company spokeswoman said it bases its investments on customer needs and what consumers want.

Mr. Sandri said on a February quarterly earnings call with analysts that Pilgrim’s small-bird business, which includes birds under 5 pounds, has helped boost company profits as large-chicken prices decline. 

“We continue to see more and more demand,” he said about small birds.

The shortfall of small chickens has increased competition, and prices, for the available supply, restaurant operators said. 

While Krispy Krunchy hasn’t had shortages yet, Mr. Shapiro, the CEO, said he was concerned that in a few years the large fast-food chicken chains will hog the tight supply of small birds. He said the company is exploring different alternatives for the small bird meat. 

“We’ll have to see what things look like as we go into 2024,” he said.

Write to Patrick Thomas at [email protected] and Heather Haddon at [email protected]