January 2019 | News | Trends

Costco Chickens Out

Tags: Logistics, Retail Logistics, Supply Chain

A handful of companies—think Tyson and Perdue—all but control poultry production in the United States. They'll soon be joined by a retailer known more for chicken sales than chicken production: Costco. The big box retailer is building a farm-to-table production system to ensure a steady supply of rotisserie chickens.

The center of the operation is currently under construction in Fremont, Nebraska, population about 26,000. Cement trucks come and go as crews line up concrete walls and steel beams for a processing plant, hatchery and feed mill. Around 100 new chicken farms in the area will be under contract to raise the birds.

When it reaches full capacity, the plant will process more than 2 million chickens per week. Some will become rotisserie chickens, and others will be sold as parts.

"All of our barns in Nebraska and Iowa collectively will supply about 40 percent of Costco's needs," says Jessica Kolterman, a spokeswoman for Lincoln Premium Poultry, a company Costco started to build and manage the project. "That will cover roughly the western half of the United States, Alaska, and Hawaii."

Costco sells approximately 60 million rotisserie chickens each year, Kolterman says. Building a system to stock its own stores is a way for the company to better manage supply and costs, especially because poultry companies are trending away from raising chickens to be sold whole.

—Fred Knapp/NET Nebraska






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