BBQ to change fried chicken recipe as olive oil price soars

BBQ, a popular South Korean fried chicken brand, will change the recipe for its signature olive oil fried chicken for the first time in 18 years to keep their prices intact.

The franchise company said on Wednesday it will no longer use Spanish extra virgin olive oil. From Oct. 4, it will use BBQ blended olive oil, a 50:50 mixture of Spanish extra virgin olive and sunflower oils, to fry chickens.

It is the first time that BBQ will change the recipe for Golden Olive chicken since it launched the signature menu item in 2005.

The move is aimed at propping up its franchise stores’ margins and retaining its customers already grappling with rising consumer prices, the company said.

 
Extra virgin olive oil is the highest quality olive oil. Chicken fried in that oil are not as greasy as that fried in other oil.

The price of Spanish extra virgin olive oil has more than doubled since last year.

“If we pass on the olive oil price hikes to customers, we need to raise our fried chicken price of 20,000 won ($14.8) on average by about 4,000 won, even without reflecting the increased chicken and flour price,” BBQ said in a pop-up message on its website.

“In the current economic situation, we cannot burden our customers by raising prices, so we decided not to. In our desperate effort, instead, we developed an olive oil blend to use from October 4.”

Heatwaves and droughts in Spain have pushed olive oil prices sharply higher since last year. Spain accounts for about half of the world's olive oil production.

According to the US Department of Agriculture, the price of Spanish extra virgin oil soared to $8,900 per ton this month, up 48.5% from six months before.

In general, olive oil prices have shot up. According to a survey by the International Monetary Fund (IMF), the olive oil price at the end of August was $9,034 per ton, a 55.9% surge compared to the end of last year and 2.1 times more expensive than the previous year.

A BBQ official said the company decided not to pass on the olive oil price hikes to its franchisees this time, after it charged them higher prices for the frying oil in May of last year.

“We decided to change the frying oil to preserve franchise profits without increasing consumer prices,” he said.

OTHER INGREDIENT PRICES SURGE

Other ingredient prices have skyrocketed, as well.

According to the Korea Broiler Council, the average wholesale price of medium raw chickens has spiked 44.2% to 2,757 won per kilogram since the end of 2021. Compared to 2019, the price has soared 60.5%. 

The price of wheat, used in fried chickens, has jumped to $591.5 per 5,000 bushels for December delivery in the US futures market. That compared to the average of $488 in September 2019.

BBQ’s price freeze comes as the goverment is calling on food companies not to sharply raise prices amid higher inflation.

“Including delivery fees, the era of 30,000-won chicken has already begun, so raising the price further could be met with an all-out backlash,” said a chicken franchise official.

“We are making every effort to cut costs, but I don’t know how long we can bear it.”

Write to Kyeong-Je Han at hankyung@hankyung.com
 

Yeonhee Kim edited this article