Where's the beef? Restaurants flock to chicken

Amid soaring beef prices and a chicken "health halo," restaurants are churning out new chicken items on menus and cutting back on promoting burgers.

The top 500 restaurant chains launched 55 new chicken dishes in January and February, outpacing the 33 burger items in the same period, according to Tehcnomic's MenuMonitor.

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This is on track to reverse last year's results, when the chains debuted 399 burger entrees and 383 chicken ones.

"I think chicken has a health halo that it's better for you," said Darren Tristano, executive vice president for food industry research firm Technomic. (Tweet This)

"[T]he prices points are lower, and that's a huge issue for operator margins."

American chicken demand growing

Ground beef retail prices rose 22 percent in January from year-ago levels, according to USDA data. At the same time, retail chicken broiler prices rose just 2 percent.

Increased prices both in the grocery aisle and at the drive-thru have boosted chicken demand as diners opt for the cheaper meat.

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"Chicken demand remains very strong domestically here in the U.S.—particularly here in retail grocery," said Brett Hundley, equity research analyst at BB&T Capital Markets. "The QSR (quick-serve restaurant or fast food) channel is featuring chicken more and more so that helps from a consumer demand standpoint as well."

This trend helps benefit restaurant operators since soaring beef has eaten away at margins.

Rising beef hitting chains

In calls with analysts, several chains have singled out the impact of higher beef prices on their results.

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Carrols Restaurant Group, the largest Burger King franchisee, recently told analysts its ground beef cost soared 32 percent during the fourth quarter from a year ago and said it thinks beef costs will go up further this year.

Meanwhile, Texas Roadhouse said beef's cost "remains a pressure point for us."

Recently, Burger King has heavily promoted several chicken dishes, including its Chicken Fries and 10 chicken nuggets for $1.49.

Rival McDonald's also recently resurrected its popular Chicken Selects, premium strips of white meat, and announced it is phasing out chicken that has been treated with human antibiotics, a move to address shifting customer expectations.

Some 'hope this lasts forever'

While burger chains are seeing some foot-traffic market share erode, chicken chain visits are rising. Fast food burger restaurant visits dropped 2 percent for the year ending in January from a year ago, fast food chicken visits rose 3 percent, according to data from market research firm NPD Group.

Growth at chains like Chick-fil-A, Popeyes Louisiana Kitchen and Zaxby's is drawing other fast food giants to invest more in chicken and "jump on the bandwagon," Tristano said.

Not everyone is hoping beef prices normalize though.

Pure-play chicken producers like Sanderson Farms and Pilgrim's Pride reap the benefits from strong chicken demand and lower feed costs.

"They hope this lasts forever," BB&T's Hundley said.