SA's fat-chicken crisis is getting worse

South Africa's largest poultry producer, Astral Foods, said on Monday its shortage of smaller-sized chicken portions for the fast-food restaurant sector had worsened since December amid continuing load shedding.

There isn't a lack of chickens – instead, chicken houses are full of birds that cannot be slaughtered due to electricity outages. As they wait, the chickens are getting heavier.

Fast-food outlets typically require chickens of around 1.8kg. But many now weigh more than 2.4kg, one poultry farmer told News24.

In December, KCF was forced to temporarily close some outlets due to problems with chickens.

Astral told News24 the situation has worsened since December as more regular Stage 6 load shedding is implemented.

"Currently, it is difficult to find birds in the weight ranges required for quick-service restaurant (QSR) production," said Astral, while adding that it couldn't comment on behalf of the entire industry.

The group said it had commissioned diesel back-up generators at all its processing sites in February 2023, but there was still a backlog of large live birds on farms.

Astral said that once the backlog had been completely addressed, "QSR production should normalise".

Spur Corporation CEO Val Nichas said on Monday that the group, which owns brands such as its namesake steakhouse, RocoMamas and John Dory's, had mitigated the chicken supply crisis by using a combination of larger and some smaller chicken suppliers.

"The biggest challenge has been the supply of wings and leg quarters, but this has been mitigated via this portfolio of chicken suppliers. Our specifications have not been compromised at all in this process."

Nichas says many suppliers have ramped up their generator capacity in recent months, but this – along with running costs, including diesel – could results in price hikes of 9% to 10%.

Pressure

Doug Place, chief marketing officer for Nando's Africa Middle East and South Asia, told News24 last week that while the restaurant industry was under similar if not more pressure from a supply point of view that it experienced in December, Nando's was not likely to run out of stock.

"We are confident we will keep all stores open and that we will have all menu items available for sale," said Place.

But he said there was no doubt there was "more pressure", adding that the main reason was that the "mean load shedding level had moved from 2 to 4" which compounds the supply chain issues between the farm and getting the chicken into restaurants.

"There are definitely shortages of chicken. The stock on hand is at lower levels than what we would feel comfortable with. December was particularly tough because demand was higher as people eat out more. And even though now demand is less, the mean load shedding impact is higher."

Place said, however, that the danger of discontinuing menu items or shutting restaurants temporarily is low.

"We run a good supply chain and we've had 15 years of practice with load shedding even if it hasn't been at this level."

Nevertheless he said Nando's was anxious about load shedding and the supply situation. Responding to questions last week, KFC South Africa said that its supply is "currently stable" with "no menu items or stores" affected.-Fin24