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Can Wendy's' Focus on New Pork Items Beat Rising Beef Costs?

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The Wendy's Company (WEN - Free Report) is betting big on pork this autumn season. Reportedly, the restaurateur unveiled three barbeque-based menu items which will be available until early November.

The menu items include a standard pulled pork sandwich with slaw and three sauce options, priced at $4.49; a BBQ Pulled Pork Cheeseburger with a price tag of $4.99, and cheese fries with pulled pork, cheddar cheese sauce, onions and barbecue sauce with a $2.99 price tag.

Wendy’s has been continuously using menu innovation to boost traffic at its stores and survive in a highly competitive industry. In fact, in the last couple of years, the Ohio-based restaurateur introduced numerous items including the popular Pretzel buns, Brioche buns, Asiago and Gouda cheeses and also tested the “build your own burger” by allowing customers to choose all the components.

We believe Wendy’s is stressing on pork menu items in order to control the escalating commodity costs as pork costs substantially less than beef. According to the National Pork Board, demand for pork rose almost 6% in 2013, which was reportedly due to higher beef and chicken prices, in our view.  

We believe, due to such high demand for pork and continuous escalating beef costs, Wendy's menu items will gain popularity.

Wendy’s currently carries a Zack Rank #3 (Hold). Better-ranked stocks in the same industry include DineEquity, Inc. (DIN - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) and Jamba, Inc. . While Jamba sports a Zacks Rank #1 (Strong Buy), DineEquity and Chipotle Mexican Grill carry a Zacks Rank #2 (Buy).



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