Wingstop Introduces A Virtual Brand That Sells Chicken Thighs

Food & Drink

Wingstop

WING
has found tremendous success in developing a concept that moved chicken wings from an appetizer to the center of the plate.

That success was accelerated by a robust digital infrastructure that became a business case study through the past crisis-laden year. As it goes, several wing concepts have popped up trying to duplicate those same results.

Now, Wingstop is taking a page from its own playbook to create a concept that puts the chicken thigh at the center of the plate. Wingstop today announced the launch of a virtual brand called Thighstop through its more than 1,400 locations nationwide.

Bone-in and breaded boneless thighs are available through Thighstop.com and DoorDash and come naked or sauced with a choice of the brand’s 11 flavors. Thighstop will also serve Wingstop’s signatures–ranch and blue cheese dips, seasoned fries, fried corn and rolls. Absent from the Thighstop banner are classic wings, boneless wings and tenders.

CEO Charlie Morrison said this brand “hack” is a way for the chain to address consumers’ fears of a chicken wing shortage and to mitigate volatile prices through a “whole bird strategy.”

“For us it’s important we use all parts of the bird. It’s a strategic supply chain plan of ours where we can think about stabilizing prices and impacting franchisees’ PnL (profit and loss statements) in a positive way, while still giving our guests something new and differentiated,” he said during a call last week.

The launch may also provide a material sales lift. Wingstop started testing bone-in chicken thighs last year and that test showed no signs of cannibalizing its signature wings. At the time, however, a broader rollout didn’t seem too urgent.

“Right now, we’re going to focus on making sure we connect with these new guests. We don’t think that necessarily a new product is going to be the answer,” Morrison said during the chain’s Q4 earnings call.

But plans change and these specific plans came about quickly, which was sort of the point here as wing volatility lingers.

“Product launches follow a traditional approach–they incubate in a lab, become an idea, test, test again and at some point you say, ‘ok, we’re ready to go to market.’ That takes a lot of time. In this case, there is a legitimate challenge on the amount of chicken currently available, which has an adverse effect on price, so speed to market is critical,” Morrison said. “Bringing it to market in a virtual-only way is how we generate speed to market.”

There is obviously a correlation between that lack of chicken availability and the pricing volatility. Chicken wing prices have doubled in large part because the same labor pressures that are affecting the entire restaurant industry are also hitting poultry plants. For example, there were over 200 job openings at one chicken processing facility in Georgia, but fewer than five people applied, according to The Atlanta Journal-Constitution.

“We need human capital to grow our supply. Volumes overall are down based on not being able to hire enough people to run plants. In some plants, they’re shutting down entire lines,” Morrison said. “It’s not just the restaurant industry that’s affected–it’s microchips affecting car sales, equipment, stainless steel. It’s all over the place.”

Morrison expects these labor pressures to correct themselves a bit by September, when extended unemployment benefits expire. In the meantime, he’s not worried about the potential for added volume from Thighstop affecting Wingstop’s staff.

“This product fits perfectly, seamlessly, into our standard operating procedures. It does have the potential to boost volumes, but even with labor pressures and limited staff, we’re fairly insulated,” he said. “Our roster sizes are small–we operate a $2 million restaurant with just five or six people working the line.”

Meanwhile, franchisees see the thigh launch as a “game changer,” Morrison adds, because of their ability to moderate those volatile prices.

“It takes 280 million chickens to satisfy our supply chain each year. With thighs, the approach we’re taking is to stimulate trial very quickly and ramp up the volume of the product and take that to suppliers to implement. That has an impact on food costs and takes some of the pressure off,” he said.

It seems like a win on paper–seamless operations, cost efficiencies, a differentiated product. The demand is also there, Morrison said. Although dark meat chicken thighs are far more common outside of the U.S., including Europe and Asia, they are getting more attention in the U.S. as demographics change and our palates diversify. According to a report from CoBank, for example, millennials are more exposed to dark meat chicken, while growing Latino and Asian populations prefer it to white meat. Since 2000, the report notes, the market share of white breast meat has dropped from 66% to 45%, while dark leg meat has grown from 12% to 30%.

Morrison said technology has also played a part in thighs finally getting their due in the U.S.

“The leg quarter hasn’t been respected in the U.S. for a long time, while outside it is one of the favorites because that dark meat has more fat, it’s juicier, flavorful and cooks up better,” he said. “We have educated our culture in America to prefer the white meat product. I think that’s been hard to gain traction on dark meat and thighs in particular. But machines that de-bone the thigh and make the whole muscle available for boneless products and strips, as well as the bone-in product, is starting to help it gain the respect it deserves.”

There’s also a major digital piece here that works in Wingstop’s favor and that is worthy of noting. Its thigh options are only available via its new native digital channel and its exclusive delivery partner DoorDash. Currently, Wingstop’s digital channels make up 65% of all sales and they’re holding at that level even as dining rooms reopen.

Morrison wants to get the chain’s digital transactions to 100% and launching a virtual brand through its existing digitally-savvy brand is one way to get there.

“Flipping to a digital model will turn into real value. Those transactions lead to a much higher check–at least $5 more–because people tend to spend more time with the menu,” he said. “We believe we can take that 65% further with this [Thighstop]. It’s a powerful statement for the future.”

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