Commercial food suppliers struggle with product and labour shortages
Popeyes, the fast-food chain that drew attention for its popular fried-chicken sandwich in 2019, is stockpiling poultry as it prepares to launch a new nugget product at a time of industrywide chicken shortages.
The business, owned by Restaurant Brands International Inc., has been building its frozen-chicken inventory for more than six months, Popeyes Americas President Sami Siddiqui said in an interview. The company wants to be confident it has sufficient supplies when the nuggets roll out nationwide July 27.
The stockpiling, a departure from the industry’s typical lean-inventory strategy, underscores the measures companies are taking to ensure steady supplies amid rising demand for dining out in the U.S. Restaurants are reporting shortages and higher prices for chicken and other key ingredients as supply chains struggle to catch up.
“Demand is very high right now, and consumer spending is surging” as the country emerges from the pandemic, Siddiqui said. “We’re planning appropriately.”
Popeyes stumbled in 2019 after it failed to anticipate the demand for its chicken sandwich and temporarily ran out of the product, even at a time of abundant poultry supplies. When it was available, the sandwich caused traffic jams and even led to fist fights at some locations.
While it would be tough to match the frenzy that product created, the new buttermilk-battered nuggets use a recipe similar to that of the chicken sandwich. Popeyes has been testing the nuggets this year in markets including Austin, Texas, and Denver, and the company has focused on staffing and training to ensure employees are prepared. Popeyes didn’t specify how much additional inventory it has taken on.
Chicken prices for producers jumped to an all-time high in May, gaining 2.1 per cent in the eighth straight monthly increase. The surge comes after rivals including McDonald’s Corp. and Yum! Brands Inc.’s KFC have started selling their own revamped chicken sandwiches.
“We work really closely with our suppliers,” Siddiqui said. “Supply chains are ramping up.”