Evolution of a product

At Moe’s Southwest Grill, an Atlanta-based regional chain specializing in freshly made, customized burritos, signature ingredients are a big selling point. “We worked with one chicken supplier to develop the right cut size, flavor profile, marination level and packaging,” says Daniel Barash, senior director of operations and product development for Moe’s. “Our customers can choose any protein they want in any of our menu items, but 60 percent choose chicken.” Barash goes through these steps to make sure that the fresh, boneless, marinated chicken breast is consistent in quality and taste.

Check specs at plant. Start at the processing end, examining the chicken to make sure the cut size, flavor profile, color, texture and aroma meet standards. If something is off, Barash suggests working with the supplier’s food scientists to reformulate.

Store the product in-house. Place chicken under the same storage conditions used at your locations to test how it holds up.

Test in store. Using a “small” sample (20 pounds), cook chicken for varying lengths of time in several menu applications; taste for flavor, texture and consistency.

Ramp up operations. Go from 20 pounds to 500 to 1,000 at one store. Does product perform well at that volume?

Add product to inventory . “We contract out 8 million pounds of chicken a year,” Barash reports.

Market report

The latest figures from the Economic Research Service (ERS) of the USDA indicate that the chicken supply will total 35.6 billion pounds in 2007—only a slight decrease from 2006 but the first drop in production since 1973. Since chicken exports are expected to expand to 5.4 billion pounds, it looks like there will be less chicken available for both foodservice and retail. The chicken industry predicts that consumption will go down to 85 pounds per person, blaming the decrease on the increased costs of feed and production. Consequently, prices are expected to remain considerably higher throughout 2007 and into 2008.

Of all the chicken parts, wings are strongest in demand with prices to match, according to Advanced Economic Solutions, an Omaha, Nebraska company that specializes in agricultural markets. Tracking prices from January 2002 to April 2007, wings have reached their highest peak: $1.40 per pound. Breast meat showed seasonal highs of nearly $2 per pound wholesale back in April, but now seems to be leveling off. As long as corn prices don’t soar out of control in the next six months, profit margins should remain acceptable, the company forecasts.

The ERS estimates turkey meat production at 5.8 billion pounds in 2007, up 2.4 percent from the year before. Prices for whole turkeys remained strong through the first quarter of the year, about 4 percent higher compared to the same period in 2006. Although turkey production and supplies are forecast to be slightly higher by yearend, price decreases will be limited by higher prices for all the other proteins—beef, chicken and pork.

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