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ESS-FEED

Global Protein Trade Market & Company News

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Poultry & Meat


COSTCO’S BILLION-DOLLAR POULTRY POWERHOUSE UNLEASHED!

Jun 10, 2023 BJ's, Costco, Target

Discover the impressive $1 billion poultry farm and slaughterhouse built by
Costco in Nebraska. Unleashing a massive operation to meet demand for their
famous $4.99 rotisserie chicken, witness the innovation behind their exclusive
processing plant.






$4.99 ROTISSERIE CHICKEN SUPPLY

Costco has invested a substantial amount of $1 billion to construct a large
poultry farm and slaughterhouse in Nebraska. The purpose of this investment is
to meet the high demand for their renowned $4.99 rotisserie chicken and ensure a
consistent supply for their customers. The newly established processing plant,
located on a 400-acre site, encompasses a massive 400,000-square-foot facility
with 500 chicken houses, each accommodating 42,000 chickens.

This move sets Costco apart from its competitors like Target, BJ’s, and Kroger,
as it becomes the only retailer with its own processing plant. Costco views this
as a strategic advantage, enabling them to maintain the availability of their
popular rotisserie chicken in their stores at a consistent price for an extended
period. The $4.99 rotisserie chicken serves as a draw for customers and has
helped Costco withstand challenges such as inflation and the threat of avian flu
by leveraging its independent supply chain.






LINCOLN PREMIUM PROCESSING

Costco founded Lincoln Premium Processing, led by Walt Shafer, the Chief
Operating Officer, to oversee the chicken production. The company has
prioritized various processes, including trussing and marinating, to ensure a
high-quality product that resonates with consumers. Shafer highlights the
significance of the rotisserie chicken, stating that it has become the
centerpiece of Costco’s stores and a fundamental aspect of their business.

The Fremont, Nebraska plant, which opened in 2019, has granted Forbes access to
its expansive facility. With a capacity to process two million chickens per
week, the plant primarily sources its chickens from its network of chicken
farmers and their dedicated chicken houses. This Nebraska facility has enabled
Costco to secure approximately 100 million out of the estimated 400 million
chickens sold annually. Roughly half of the processed chickens end up on
rotisserie spits, while the remaining portions are cut, packed in plastic, and
distributed to stores across the Midwest and West Coast.

Costco learned valuable lessons from Tyson, the largest poultry producer in the
country, which faced difficulties in establishing a new chicken plant in Kansas
due to local opposition. To gain acceptance and support from Nebraskans, Shafer
spent two years engaging with farmers in the traditionally cattle ranching area,
persuading them to incorporate chicken farming into their operations.








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ESS-FEED

ESS-Feed reports on global news related to the supply chain of protein, spanning
from its production, processing, trading, distribution, and consumption. It
covers the journey of food from its initial stages in the field to its ultimate
destination at the dining table.

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