Back in the fall on this site, we described an innovation by McDonald’s and its wide-ranging effects on the entire national supply chain for chicken wings. The fast food giant had decided, just in time for the start of football season, to add chicken wings to its menu. It did so in grand fashion, purchasing approximate 50 million pounds of wings, which left other wing joints to struggle to find supply and chicken producers searching for buyers for the other parts of their chickens.
The plan did not work out quite as the Golden Arches had hoped. The wings themselves were relatively spicy, such that consumers accustomed to the simple tastes of McDonald’s burgers and fries never flocked to the new menu offering. At prices of approximately $1 per wing, they also did not offer a compelling financial reason to buy. Fast food fans could get far more food for the same amount, simply by glancing down the Dollar Menu.
As a result, McDonald’s is left with approximately 20 percent of its supply in its warehouses—that is, about 10 million pounds of frozen, unsold wings. To avoid overwhelming inventory holding costs, McDonald’s needs to get those wings to consumers, so it promises that the Mighty Wings will rise again.
The product is still the same though: slightly too spicy wings, available in franchise outlets. If it hopes to convince people to consume them, McDonald’s likely needs to lower the price significantly. Such a promotion probably would promise lower prices on the wings for a limited time, in the hope that that window will be long enough to sell out of all the remaining supply.
For franchise owners, the idea of cutting prices on wings is less than appealing. For most franchisees, sales at discounted prices mean reductions in their profits. That is, they still pay McDonald’s the same amount to receive inventory, but they earn less from selling those products at the mandated discount price.
Furthermore, the question remains whether consumers will find the promotional price compelling enough. If the wings really are too spicy for most people’s palettes, it is unlikely that they would eat them at virtually any price.
Maureen Morrison, “Why McDonald’s Mighty Wings Failed to Take Flight,” Advertising Age, December 20, 2013