Cost of chicken wings soars high above restaurant price points
When they took over their property seven years ago, the owners of the Bigham Tavern inherited a weekly Wednesday-night tradition from their longtime predecessor, Kaib’s: a wing night that packed in the locals.
They made wings — frequently named by magazines and websites as among the best in Pittsburgh — a cornerstone of their business.
That was until June, when they got a supplier’s cost projections that made them sweat like they’d just eaten an order of their “Atomic” habanero wings. Owing to an unprecedented demand nationwide, prices for chicken wings have soared over the past year and have not come back down as they typically do in the summer.
“It has been rough,” tavern marketing director Sarah Wilderman said Wednesday.
In a move to avoid raising prices, they switched to what proved to be an inferior product — smaller and of poorer quality. They heard about it from their regulars immediately.
“It was the most unsolicited feedback we’ve ever garnered from a change,” co-owner Jessica Rewis said. “They were kind complaints, from regulars who loved the product and said they would pay more for it. We thought they were coming in just for the deal.”
Lesson learned: They switched back to the previous product and preparation, and customers are again happy, if their accountants are not.
The economics of a single wing at the Bigham Tavern are as follows: One “naked” wing — no sauce, uncooked and no added labor or overhead — costs them 44 cents (their purchase of 89,000 pounds of wings annually gets them a volume discount). Add the other costs, and it’s 60 cents. Mrs. Rewis said that an 80-cent price would provide an acceptable profit margin. Instead, on wing night, they sell them for 50 cents.
Matt Cercone is coming up on 10 years in business at his Big Shot Bob’s in Avalon, which boasts over 150 flavors of wings and has spun off six other local franchises.
“Usually around the middle of May is when you see the decline, through Labor Day, and then you see a steady incline to the Super Bowl,” Mr. Cercone said. “Summertime is slower and you don’t move as much volume, but your profit margin is higher.” That didn’t happen this year. Mr. Cercone saw no other options than to raise prices. His straight-from-the-store wing cost is 49 cents. He has raised prices by roughly 12 percent, from 99 cents a wing to about $1.12. “The goal is to not compromise quality. We could’ve made other adjustments, but we’ve built a brand on this and I’m going to stick with the formula that absolutely works. We’re not
going to cut down quality or the hours or wages of employees. I’m trying to ride it out — but we don’t want it to sting too much.”
Breaking out a graph from a supplier that charts out wing prices over the last three years, he said “when we first started, wings were 60 cents a pound. Yesterday — yesterday — they were $2.47 a pound. I’ve really tried to just suck it up.”
The Wall Street Journal noted in a story Friday that publicly traded Buffalo Wild Wings said its wing costs rose to “a historic high” for the second quarter — and its earnings tumbled 60 percent — while menu prices have held steadyover the past year.
Conversely, chicken producers have profited handsomely. The same article noted that executives at SandersonFarms Inc. in Laurel, Miss., said “quarterly profit more than doubled from a year earlier,” and, “Strong demand has kept reservessharply lower.”
Wings per pound regularly outpace the price of chicken breasts, which is something of an irony, considering that wings gained popularity in the first place because they were inexpensive. And considering that Americans ate an estimated 1.33 billion wings on Super Bowl Sunday alone this year, according to the National Chicken Council, the demand isn’t going away.
RayTurkas of Strip District Meats has been in the business for 48 years, acting as a middleman between producers and restaurants. His company sells 40 to 50 cases — that’s 40 pounds of wings (or about220) per case each day.
“They want what they want,” Mr. Turkas said. “If people were buying a value, they’d pay 60 or 70 cents less for boneless wings a pound. But they want to sit down with hot wings and watch football.”