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Fast-food chicken demand nears pre-pandemic levels

Chicken demand from US quick service restaurants has bounced back to near where it was before the coronavirus outbreak caused consumers to isolate at home, poultry company Pilgrim's Pride Corp said on Thursday.

1 May 2020, at 2:18pm

Restaurant demand for meat and poultry tumbled as the pandemic shut dining rooms, shifting sales to grocers. The recovery at quick-service restaurant (QSR) chains signals some consumers are resuming more normal activities such as ordering from fast-food drive-thru windows, reported Reuters.

"The QSR business, it went through its trough," Pilgrim's Pride Chief Executive Jayson Penn told analysts on a conference call. "That business is now strengthening."

The health crisis, which has infected over a million people in the United States and killed more than 60,000, has forced state lockdowns. That led to losses for restaurants as they close completely or shifted to carry-out, drive-thru and delivery.

Pilgrim's Pride, which is mostly owned by JBS SA, has shifted headcount to producing poultry for retail meat cases from big birds that typically go to restaurants and food-service outlets. The company also delayed a project to convert a plant from deboning big-sized chickens to smaller ones, probably until the first quarter of 2021, Penn said.

"Until we see the environment clearing up, we'll push that off," he said.

The pandemic has limited the availability of meat and poultry as processors have closed or slowed operations at slaughterhouses due to coronavirus outbreaks among workers. Reduced production of beef and pork due to plant disruptions could shift demand to chicken, Penn said.

The United States processed 150 million chickens for meat in the week ending on April 18, the lowest for April since 2014 and down from an all-time high of 169 million prior to the pandemic in the first-quarter of 2020, according to the US Department of Agriculture. The agency said it appears overall supplies continue to outpace demand.

Some of the nation's largest pork and beef plants closed after outbreaks of coronavirus among workers, though poultry plants have mostly stayed open so far.

"The QSR segment is holding up relatively well and is expected to drive a faster comparative recovery in demand verses full service as the population gradually resumes more normal routines," Penn said.

McDonald's Corp CEO Chris Kempczinski said there was a powerful desire among consumers to return to familiar brands and he believed the world's largest fast-food company "reached a trough in terms of number of restaurants closed in late March."