Why Shake Shack Is Getting Into The Chicken Sandwich Business

The chain’s new ChickenShack sandwich opens a way into the fast growing chicken market, just as Chick-fil-A prepares to open a string of New York stores.

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This morning, Shake Shack announced it would be offering a chicken sandwich called the "ChickenShack" in its three Brooklyn restaurants.

Following in the tradition of its "100% all-natural Angus beef" burgers made with "no hormones and no antibiotics ever" and "100% all-natural beef hot dogs," Shake Shack's new sandwich will be made with "crispy all-natural, antibiotic-free chicken breast" topped with lettuce, pickles and mayonnaise. It will cost $6.29 and be available for a limited time.

The restaurant may be taking it slow with the rollout of its new poultry sandwich, yet the ChickenShack—if it's tasty enough—represents a massive opportunity for the budding chain, which recently went public and needs to grow fast to justify its huge valuation (it's currently valued at just under $2 billion, with less than 40 U.S. restaurants). Americans ate an average of about 84.7 pounds of chicken each in 2014, which far exceeded per capita beef consumption of 54.2 pounds, according to estimates from the U.S. Department of Agriculture.

Data from market research firm NPD show sales of chicken entrees at fast-food restaurants grew 3% in the year ending in March, faster than burgers. This growing demand for chicken has helped chains like Chick-fil-A grow quickly in recent years.

Shake Shack expects comparable restaurant sales to increase in the low single digits this year, after growing 4.1% in 2014. A successful new menu item could boost performance, particularly as other burger chains like Habit Burger (which also offers chicken and tuna sandwiches) continue to grow.

Shake Shack has 39 restaurants in the U.S. and 27 overseas, according to its last quarterly report. The company, which applied to trademark "Chicken Shack" earlier this year, is staying quiet on plans to roll out the chicken sandwich beyond its Brooklyn stores, though it's clearly hinting at the possibility.