OUT OF THE CAGE

Why chicken is the tasty nugget in fast food franchises.

Even in today’s competitive fast food landscape, where customers are spoilt for choice, chicken chains are continuing to gain market share, and it’s off the back of consumer demand.

Where once a fillet from the flightless bird was seen merely as an additional menu item, Australian consumers are increasingly making the move towards chicken options.

The versatility of the product offering allows fitness fanatics and fried food fiends to sit elbow to elbow at the same table, offering the opportunity for maximum market penetration.

As customer expectations develop, franchise chicken chains are revamping their offering, promising to make chicken sexy again.

CURRENT MARKET

The franchise chicken sector has come a long way since the Colonel opened the doors to his inaugural Salt Lake City restaurant in the early 1950s.

KFC’s categoric rise to franchise fame in the US paved the way for what has now become one of the most lucrative dining markets worldwide. In 2019, brands are scratching to get their claws on a piece of the chicken sector, each adding their own twist on the poultry product, and for good reason.

According to IBISWorld’s Fast Food and Takeaway Food Services in Australia Industry Report, chicken-based product offerings account for 18.4 per cent of the $20.1 billion fast food sector, making it the second largest product market nationwide.

Customers are increasingly shying away from the big-name beef burger market in search of something more bespoke.

For franchisees, a chicken-based offering presents a mature market, with a significantly lower cost of goods than other premium red-meat markets.

“Chicken is Australia’s favourite protein,” Mimma Battista, CEO of Chicken Treat says.

“Australians per capita consume around 49 kilograms of chicken annually, compared with 27 kilograms of pig meat, 26 kilograms of beef and eight kilograms of sheep meat.”

“We only need to look at what is happening in the US Market. For the fourth year in a row Americans have chosen a chicken chain over burgers – this year Chickfil-a is still ranked America’s favourite fast food over the major burger chains.”

CHALLENGES

Operating a chicken franchise is not without its challenges, however. The quality of a poultry product, particularly when grilled or roasted, is highly dependent on supply chain conditions. Where other fast food and meat product offerings can be frozen and shipped with no loss of inventory quality, chicken chains are bound by stringent supply demands.

It’s something New South Wales-based franchise Ogalo has come to know well.

The Portuguese chicken providers have amassed an enviable network of stores across Sydney, operating a centralised kitchen that produces and delivers fresh product. However, when it came time for the brand to launch its inaugural interstate location in Darwin earlier this year, the model had to be adjusted.

“We have always had control of product production as we believe that in doing so, we can keep our quality at the highest level possible,” Ogalo operations manager, Nelson Lima says.

“Darwin in particular was always going to logistically be a difficult place to open a new site. We had to work on a system that would allow our product quality and consistency to be the same whether you had a meal in one of our Sydney locations, or interstate.”

What that meant was building relationships with local suppliers and food distributors, in addition to bolstering network support.

“We had staff from Darwin attend our company store for an intensive training course covering every facet of running an Ogalo store. Our store start-up crew were also in Darwin to assist and since opening, the store has proven to be a hit with the local community.”

From deep fried to flame

grilled, chicken has for long been the tasty nugget providing franchise chains

with a tender future.

By Nick Hall

CUSTOMER EVOLUTION

While investing in training is not a new premise, it does helps to elevate brand appeal, which in a market as competitive as the chicken sector is invaluable.

“Consumers want personality; they don’t want to be served by a robot,” Oporto customer experience manager, Michelle Draper says.

For the past few months, the iconic Australian franchise has been revamping its instore experience to better suit the evolving demands of the contemporary customer.

“In the minds of consumers, Oporto is considered a premium product. We discovered we could easily match or exceed the rankings of the premium QSRs simply by redesigning the physical layout of our stores and investing more in our people,” Draper says.

The franchise found that by educating