McDonald's focuses on Devil Chicken due to rising beef prices

Due to rising beef prices and changing consumer health habits, McDonald's is intensifying its focus on the fried chicken market. They aim to increase their share of the global chicken market by an additional 1.5 percentage points by 2030, and the company plans to achieve the same growth from beverage sales.

Despite this focus on chicken sales, which is a relatively low-cost protein, McDonald's states that it will not affect their beef burger sales and that they will continue to maintain their leading position in the beef market.

McDonald's CEO Chris Kempczinski told investors last May that their beef market share is approximately 45%. In comparison, their chicken market share was in the high teens, but he noted that the overall chicken market is larger than the beef market and is growing at twice the rate. However, the company has warned that rising beef and energy costs are causing a decline in franchisees' profits. In addition to these economic challenges, McDonald's is facing significant pressure from rapidly expanding competitive restaurant chains like Popeyes, Wingstop, and KFC, driven by the strong popularity of fried chicken among the 'Gen Z' generation. Kempczinski states that his company has sufficient consumer insight and operational capability to adapt to and capitalize on the industry's next shift.

In light of this situation, the company has announced an investment of approximately $8.5 billion to support its franchisees with rent payments and restaurant upgrades. According to data from the UK's Agriculture and Horticulture Development Board, beef prices in the United States and the United Kingdom have risen by more than 20% over the past two years. Peter Backman, an independent food service industry analyst, points out that chicken is considered by consumers to be a cheaper and healthier food. He further states that in a market where rising beef prices are a hindrance, McDonald's will be able to sell more to its customers and gain market share from competitors by introducing more chicken products.

According to Mintel, the percentage of consumers who used chicken outlets in the UK was 37% in 2023, growing to 39% by 2025, with Gen Z usage reaching a high of 52%.