Commentary

McDonald's Mighty Wing Takes Flight (As Does ESPN)

McDonald’s confirmed yesterday that it is “set to hatch a fast-food menu item in a fast-growing category it wants to own: chicken wings,” as Bruce Horovitz puts it in USA Today, unleashing speculation on the Mighty Wings’ potential impact on everything from fast-food franchises that have built their business around poultry to its influence on the wholesale price of the bird part. 

“It’s like the Colonel adding a cheeseburger,” Scott Hume, the editor of the BurgerBusiness blog, tells Horovitz, pointing out that “Mighty Wings will make McDonald’s a ‘serious competitor’” to the likes of KFC, Popeyes, Church’s, Buffalo Wild Wings and other chicken chains. Hume broke the story on Friday, citing as his source a Facebook posting by a franchisee that was subsequently taken down, as other reports inform us. 

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The national rollout begins Sept. 9, will be completed by Sept. 24 and will run through November. McDonald’s has previously tested the lightly-breaded, bone-in drummettes and wingettes in Atlanta and Chicago. They will come in 3, 5 and 10-piece options, the company confirmed Monday, and the Los Angeles Times’ Tiffany Hsu reports. There will be nine sauces for patrons to choose from. Prices start at $2.99.

The Chicago Tribune’s Samantha Bomkamp reports that Janney Capital Markets Mark Kalinowski wrote yesterday that McDonald’s recently applied to trademark the name Mighty Wing. 

The news isn’t entirely out the blue, of course. 

In April, Wedbush analyst Nick Setyan told the Wall Street Journal’s Tom Gara that McDonald’s had driven up the wholesale price of chicken wings by purchasing large amounts at the end of last year. But once it had its fill by the beginning of February or so, the price “tumbled back down.”

“The problem with chicken wings,” Setyan said at the time, “is that supply is not very flexible: chickens are raised primarily for the breast meat, and the wings are a fortunate byproduct. So even when a big buyer like McDonald’s enters the market,” Gara reminded us yesterday, “‘nobody’s going to produce more chickens just to cut off the wings.’” 

Miller Tabak + Co.’s senior restaurants analyst Stephen Anderson has a note in Barron’s reiterating its buy rating for Buffalo Wild Wings “even with a potential supply shift in bone-in chicken wings resulting from McDonald’s pending nationwide launch,” pointing to level prices since June and suggesting three reasons why prices may drop even further. Anderson had earlier pooh-poohed the idea of a nationwide Mighty Wings launch because of the high prices of the wings and McDonald’s other recent launches -– “e.g., Premium Chicken McWraps, expanded lineup of Quarter Pounders, Egg White Delight McMuffin” -- a gaffe he acknowledges.

But as Buffalo Wild Wing’s CFO Mary Twinem told analysts on a July earnings call, as reported by Gara: “I don’t know that there’s ever a crystal ball on wing prices.” Which is, of course, what makes the game so exciting even as the kickoff of the pigskin season draws nigh.

Under new CEO Don Thompson, McDonald’s is “being more innovative, and they’re being more aggressive with the changes on their menu,” Telsey Advisory Group analyst Peter Saleh tells Bloomberg’s Leslie Patton. “This is good news because it’s in conjunction with the football season.”

Speaking of which, take a look at ESPN ombudsman Robert Lipsyte’s take on the controversy surrounding the sports network’s announcement last week “that it was removing its brand from an upcoming two-part documentary by PBS’s ‘Frontline’ that ‘reveals the hidden story of the NFL and brain injuries’ (or so it claims in a controversial trailer).”

“Was ESPN Sloppy, Naive or Compromised?” the hed on the story asks. Lipsyte presents evidence for all three without leaving us with a definitive answer. Sandy Padwe, a Columbia journalism professor, tells him “it sounds like a terrible blow for journalism at ESPN.” But the concluding quote from Dwayne Bray, a senior news producer who was working with “Frontline” on the story, sees it more optimistically: “This issue is about branding, not about journalism. We will still get to do the stories, and no one will interfere with that.” 

ESPN has maintained it pulled out of the program “because of misunderstandings about who had editorial control over the documentary, not because of its broadcast deal with the league,” as James Andrew Miller and Ken Belson reported in the New York Times Friday.  

Others have maintained that $15.2 billion still goes a long way, influentially speaking.

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