In order for Costco to lure customers to their store with their $5 rotisserie chicken, the company is creating their own poultry facility.
Costco loses money each year in the tune of $40 million a year and to ultimately cut supply costs they are investing $400 million dollars to have a “one stop shop” for all their poultry needs.
According to Food and Wine, when the facility opens in 2019, it will have about 800 employees and house a processing plant, hatchery and feed mill.
The Costco facility plans on producing 100 million chickens a year and process two million chickens a week. The Seattle Times reports that Nebraska’s corn and soybean production will help Costco with the costs.
When the Costco facility is up and running it will compete major suppliers of poultry, Tyson and Perdue.
The business plan is similar to the one Costco has to maintain their cheap hot dog costs and to keep customers lower prices are key to its success.