Costco Poultry Complex Could Redefine Farm-to-Fork

As Costco is set to be the first U.S. retailer to integrate its meat supply to the farm level, a new report from CoBank’s Knowledge Exchange Division predicts that other food retailers and foodservice companies may be prompted to reevaluate their own supply chain integration opportunities.
In September of next year, Costco is slated to open a new chicken complex in eastern Nebraska where it expects in-house production to generate a savings of 10 to 35 cents per bird. According to the CoBank report, the move comes as Costco’s rotisserie chickens have become a major traffic-driver for in-store customers, while available supplies of whole birds at targeted weights have declined. Since 2010, Costco’s rotisserie chicken sales have grown by more than 8 percent annually—three times the growth rate of total U.S. poultry consumption—and have maintained a $4.99 per chicken price point.Costco’s move marks the first time a U.S. retailer has integrated its meat supply to the farm level and taken on the risks associated with animal husbandry, including feeding, animal welfare, disease prevention and harvesting.