Wingstop may soon be raising its own chickens
Other potential solutions are now on the table, including becoming his own chicken supplier.
“There are … scenarios that could include acquiring a small poultry complex or building our own poultry complex,” Wingstop CFO Alex Kaleida said at Tuesday’s event. “We also worked with a third party to really understand the end-to-end cost structure of a poultry complex and what it takes to run a facility from feed to producer to processing. .
Wing prices are volatile: In June last year, when the company launched Thighstop, wholesale prices for wings had risen significantly from the previous year. Although securing supply by investing in a poultry farm would not be cheap, Kaleida believes it would help Wingstop avoid sudden spikes in its chicken costs.
Wingstop estimates that a poultry complex could supply about 20% of its overall wing purchases.
Securing its chicken supply chain could be “potentially a game-changer” for the company, Wedbush restaurant analyst Nick Setyan said in a note on Tuesday. Indeed, greater clarity on food costs could encourage more operators to open Wingstop franchises, fueling growth.
In the first quarter, Wingstop added 60 restaurants, a record. Sales at stores open for at least a year increased 1.2% during this period.
— Nathaniel Meyersohn of CNN Business contributed to this report.