U.S. KFC Pulls Boneless Chicken Ads as Supply Shortages Hit Foodservice

This is an English adaptation of a FoodBud historical article originally published on September 26, 2021.

U.S. foodservice operators were facing broad supply pressure in September 2021, with disruptions showing up across poultry, beef, pork, seafood, dairy, beverages, and imported ingredients.

Recent data cited in the article showed U.S. poultry supply in August down 20% year on year. Beef reserves were down 7.7%, while pork belly reserves fell 44% year on year to their lowest level since 2017.

Chicken Shortages Reach Major Chains

KFC in the U.S. reported shortages of chicken products and temporarily pulled advertising for boneless chicken because of limited supply.

The issue was not limited to KFC. Wingstop, known in the U.S. for fried chicken wings, developed new chicken-thigh products as an alternative after heavy wing shortages.

Other global quick-service chains were also affected:

• McDonald's Hong Kong said on September 11 that it would suspend sales of crispy chicken wings.
• In the U.K., 1,250 McDonald's stores had recently suspended milkshake sales.
• Starbucks and McDonald's were among the chains facing raw-material shortages.

Crab Meat Prices Surge

The U.S. was also experiencing a crab meat shortage. In September, crab meat prices rose to $50-$60 per pound, while some e-commerce listings reached as high as $121 per pound.

That was far above the average range of $19-$30 per pound over the previous five years, representing a surge of about 590%. Many restaurants removed crab dishes from menus as a result.

Bubble Tea, Bacon, Bread, and Coffee Also Hit

Bubble tea supply in the U.S. had been tight for about six months. Tapioca pearls used by European and North American bubble tea operators were almost entirely imported from Asia, and shipping delays constrained supply.

Other products in short supply in the U.S. included bacon, toast, and coconut water. In the U.K., shortages extended directly to bread and meat.

In Asia, Vietnam, the world's second-largest coffee exporter, faced export restrictions linked to the pandemic. Global coffee prices had risen about 50% that year, reaching a five-year high.

Other Food and Beverage Market Updates

Dongpeng Beverage launched its first ready-to-drink latte coffee product, Dongpeng Daka, according to Alpha Factory. The company announced the product on its official video account on September 24. The target consumers were people aged 18 to 35, including white-collar workers and students. The product was planned for initial distribution in Guangdong through offline and online channels. Two sizes were listed: 300 ml at a suggested retail price of RMB 5, and 500 ml at RMB 7.

Dongpeng Beverage had applied in July 2021 to register the trademark "Yaoyao Latte," preparing for the new product launch.

Dongpeng Beverage also announced, through a company filing, that it planned to establish Dongpeng Beverage Marketing (Shenzhen) Co., Ltd. with registered capital of RMB 10 million. Dongpeng Beverage would fund the wholly owned subsidiary with its own capital and include it in consolidated financial statements after establishment.

Kraft Heinz reportedly signed an agreement to acquire Brazilian condiments and sauces company Companhia Hemmer Indústria e Comércio. Hemmer is based in Blumenau in southern Brazil, was founded more than 100 years ago, and sells condiments and sauces including mustard and ketchup.

Dutch Bros disclosed insider trading activity on September 21, reporting that executives Graham John Patrick, Jemley Charles, and Maxwell Brian had net purchased 1.5326 million shares on September 17, 2021. Dutch Bros listed on September 16, 2021, and its market capitalization was then $8.6 billion.

Note: forward plans, IPO, market capitalization, acquisition, and investment figures are historical references from September 2021.