Beak Capitalism, Part 1: Chickflation

SPEAKER_1 (0:03)

Bloomberg Audio Studios, podcasts, radio, news.

Sam Reince (0:09)

The chicken sandwich war on Twitter has people clucking all over the country.

SPEAKER_1 (0:13)

It's chicken chaos in Milwaukee. Long lines outside Popeyes.

Tracy Alloway (0:17)

If you didn't jump on that Popeyes chicken sandwich craze, you're too late.

SPEAKER_4 (0:21)

Popeyes is officially sold out.

SPEAKER_5 (0:24)

Beatings, stabbings, and even car crashes, people behaving very badly in Los Angeles. And across the country, for that fact, trying to get their hands on Popeyes chicken sandwich. In LA.,

Tracy Alloway (0:35)

On August 12, 2019, Popeyes released their famous chicken sandwich. It was a humble fried chicken breast with pickles and mayo on a brioche bun, priced at a very reasonable $3.99.

Joe Weisenthal (0:48)

Some people called it a masterpiece. Some others were just thrilled to see a delicious alternative to Chick-fil-A. To be honest, I can't actually remember whether I had it or not. But I'll just say those are really, those are really delicious. I totally get it. I get why people love all these sandwiches.

Tracy Alloway (1:04)

I'm sure you remember what happened after this, Joe. Dozens of imitators were launched. I mean, Taco Bell, of all places, even did a version, a crispy chicken sandwich taco. And Chick-fil-A came out swinging. They claimed that they and not Popeyes were the original inventors of the chicken sandwich. Meanwhile, Popeyes struggled to keep the sandwiches in stock. Fights broke out. There was even a lawsuit. A guy from Tennessee asked for $5,000 in damages after he couldn't get hold of one. The chicken sandwich craze was pure mayhem. Or should I say, mayhen.

Joe Weisenthal (1:40)

But what's really important about the chicken sandwich wars is that they never really ended. Okay, you aren't seeing them hit the headlines in quite the same way anymore. But on menus around the country, chicken is more popular than ever. Burger chains have been launching chicken wings. Donut shops have chicken wraps. So you might have an opinion on who ultimately won the chicken sandwich battle, but the real winner of the war was the chicken itself. Or maybe I should say the real winner is the American eater.

Tracy Alloway (2:04)

Yeah, there are more chicken products on offer than ever. In fact, America's consumption of chicken continues to grow even as appetites for other types of meat, like beef, have stalled. The average American consumed a whopping 116 pounds of chicken in 2023, and that number is only expected to grow, making chicken by far the most consumed meat in America. Each of us is eating something like 20 adorable chickens' worth of white meat every year, and what's interesting is that's been happening even as poultry prices have surged. Fresh whole chicken used to cost about $1.60 per pound a decade ago. It now goes for almost $2. That's an almost 25% increase, and higher than the jump in broader inflation, which as we all know, has been a huge deal in recent years.

Joe Weisenthal (2:55)

Speaking of inflation, egg prices have become a prime example of recent price pressures with wholesale egg prices surging by 207 percent between 2022 and 2023 Chicken farmers blamed outbreaks of bird flu for the increase, but some saw it as corporate price gouging, result of a handful of powerful companies supposedly taking advantage of consumers at a difficult time. And generally, it looks like the bird flu was a big part of the story, but it did happen at a time when prices for all kinds of things were surging, so it's easy to understand why people saw it as a macro thing.

Tracy Alloway (3:27)

So we have to ask what exactly has been driving the price increases in eggs and that sweet sweet chicken meat. Why has the chicken industry evolved in the way that it has, and what does it say about the nature and future direction of America's economic model?

Joe Weisenthal (3:50)

Welcome to Beak Capitalism, in which we explore some of the thorniest issues facing the US economy through the medium of chicken.

Tracy Alloway (3:57)

In this special three-part series from Odd Lots, we are going to examine eggs, get it?

Joe Weisenthal (4:03)

So there's gonna be chicken puns, huh?

Tracy Alloway (4:05)

There are definitely gonna be chicken puns. Get used to it now. We are going to examine all of these questions and more, because it turns out chicken has a lot to say about things like inflation and the relationship between workers and big companies, and it creates some big existential questions about what kind of economy we actually want to have. First up, what actually happens when the price of a chicken sandwich, or an egg, or even a simple chicken wing takes flight?