Wild times in the wing segment

Wild times in the wing segment

Soaring chicken wing prices are killing food costs, causing wing-centric casual dining chains to try different strategies.

With chicken wing prices up as much as 57 percent year-over-year in 2012, wing-driven restaurant brands have begun to look for new ways to boost business. Notable initiatives from segment leaders so far: diversify the company (Buffalo Wild Wings); spin off a related concept (Wingstop); or rely on edgy new promotions (Hooters).

Same-store sales at 835-store Buffalo Wild Wings (BWW) are still healthy, jumping   9.2 percent at company-owned locations at 7.3 percent at franchised stores in the most recent quarter. This trend should continue, as customer demand for chicken wings shows no sign of slacking off. [4]

The problem is supply. Wing costs have risen so much that the company has begun to roll out price increases. BWW says tests show its customers will pay the higher tab.

But new pricing wasn’t the biggest piece of news to emerge from BWW’s 1st quarter earnings call last week. The company told analysts it is actively seeking a small restaurant chain to acquire. Highly successful Buffalo Wild Wings has enough financial muscle to pull off almost any deal, so it will be interesting to learn which concept BWW thinks would keep its headlong growth alive. Give them a call if you think yours might be a good fit.

500-store Wingstop is looking to diversify, too, but will do so via a spin-off concept developed in-house. The new venture, Wingstop Sports, offers a much-broader menu than a traditional Wingstop unit.

Wingstop Sports “takes our great, original restaurant theme a step further with the addition of several new menu items, and combines that platform with a larger footprint for watching parties and more dine-in traffic,” says Wingstop president/c.e.o. Jim Flynn.

The first Wingstop Sports opened last month in Brownsville, TX. The 2,800 sq.-ft. store seats 98 guests and offers limited table service plus plenty of HD televisions for sports viewing.

It says something when the two biggest companies in the chicken wing segment tinker with diversification, be it from new ventures inside or outside of the existing company.  But Hooters, whose 430 stores already offer a much broader-based menu than Buffalo Wild Wings or Wingstop, is staying the course with wings. In fact, it’s going all in, sponsoring a series of wing-eating competitions that will culminate at the Hooters Wing-Eating World Championship this July.

Its partner in this new venture is Major League Eating (MLE), which will oversee both the finals and the 10 regional wing-eating contests that lead up to it.

“For nearly 30 years, Hooters has been known for our original, world-famous hot wings and it’s only natural that we establish this inaugural coast-to-coast wing-eating competition,” says Hooters marketing boss David Henniger.

MLE president Richard Shea says his organization conducts more than 80 events annually, including the Nathan’s Famous Fourth of July International hot dog eating contest held in Coney Island, NY. He claims the “competitive eating community” is made up of more than 8,000 “veteran and rookie gurgitators who travel the world in search of top titles and the glory they provide.”

The field for each regional wing-eating contest will be comprised of both traveling pros and locals. The event kicked off in early April at the Hooters in Augusta, GA, taking place the same weekend the town hosted the Masters golf tournament. The star attraction was Sonya “The Black Widow,” Thomas, the world’s top-ranked female eater and current five-time National Buffalo wing-eating champion. The 100-pound Thomas won, downing 140 wings in 10 minutes.

Chicken wings have produced strong of profits for not just wing specialists but many other types of restaurants over the past two decades. The era of ten-cent wing nights might never return, but we know many, many operators are praying that wing prices return to their historical norms soon. Let’s hope they do.