Chicken Wings Fall From Favor as Consumers Start to Trade Down

Chicken wings may be reprising their role as a bellwether of meat inflation. 

An early favorite when the Covid-19 outbreak prompted many consumers to eat more meals at home, chicken wings soared in demand and more than doubled in price. That eventually led consumers to stop buying and restaurants like Wingstop to switch to thighs.

Now, “the weakest part of the bird has been the wings, which is very interesting because last year wings were really the highlight,” Fabio Sandri, chief executive officer of Pilgrim’s Pride Corp., the second-biggest US chicken producer, said Thursday on an investor call.

Sliding wing prices could be a harbinger for more declines in meat markets, with consumers beginning to reduce restaurant visits and buy less of pricey beef and pork and more of cheaper poultry cuts such as legs. Elevated protein prices are a major contributor to the worst food inflation in four decades.

“We’re seeing some trade-down, from very expensive cuts into more affordable cuts,” Sandri said. “Chicken is the biggest benefitter of that trade-down.”

The switch should lift Pilgrim’s Pride. The Greeley, Colorado-based company, majority owned by JBS SA, the world’s biggest meat producer, reported better-than-expected second-quarter earnings. Still, its shares reversed from earlier gains to slump as much as 4% -- the largest decline in over a month -- as data showed the US economy contracting slightly for the second straight quarter.

https://www.bnnbloomberg.ca/chicken-wings-fall-from-favor-as-consumers-start-to-trade-down-1.1798417