Light options mix low for Yum!
April 30, 2014
by Monica Watrous
NEW YORK – Customers of Taco Bell, Pizza Hut and KFC aren’t necessarily interested in the lighter items available at the chains, said parent Yum! Brands, Inc.
Offering a balanced menu of better-for-you options remains a priority for Yum!, but the company said its healthier alternatives don’t perform as well as the more indulgent products.
“We are certainly aware of heightened awareness among consumers around obesity and good integrity,” said Pat Grismer, CFO of the Louisville, Ky.-based company, during an April 29 presentation at the Barclays Retail and Consumer Discretionary Conference in New York. “So for us, what that means is that we need to continue to maintain our high standards around the quality of our food and increasingly provide more balanced offerings to customers to give them a choice. Interestingly, what we have found is that as we have introduced more healthful alternatives on our menu, they don’t necessarily mix high.”
The company has made efforts to improve the nutritional profile of some of its products, even pledging to meet specific nutrition goals at Taco Bell by 2020. Last year, the Mexican fast-food chain announced a commitment to have 20 percent of its combo meals meet one-third of the federal government’s dietary guidelines for daily intake values of fat, calories and sodium by 2020. That translates to approximately 667 calories, 26 grams of fat, and 767 mg of sodium per meal, based on a 2,000-calorie diet.
Still, customers of Yum!’s brands may not be seeking reduced-fat fare.
“I think consumers come to our brands in many cases because they appreciate the taste and the indulgence,” Grismer said. “They like to know that from time to time they can choose something that might be more healthful, but those don’t necessarily mix high, but we believe that it’s important to provide that choice so that we can block the veto vote, as it were. People are coming in a party where someone might want something that might be less indulgent, or if you know a regular customer from time to time wants to balance how they access our brands. So we definitely see that as something to be aware of and we are taking steps to continue to evolve our menu in ways that are responsive to that.”
McDonald’s recently shared a similar sentiment. Despite committing last year to adding side salad, fruit or vegetable options in its combo meals by 2020, the chain said healthier items such as salads still represent a small portion of sales.
As for Yum!’s struggling KFC business in the United States, a new menu strategy may relate less to health and more to market relevance.
“One thing we know is that from the performance of others in the category, fried chicken is still a big idea with American consumers,” Grismer said.
“There are competitors in the category who are growing quite nicely, who are very profitable. We see no reason why KFC can’t be in that same league; in fact, we should be there, but we need to evolve the menu to offer products that are more relevant and to put in place and enable a service system that will ensure consistently better service, because that’s what customers are looking for, and that’s what they are getting at competing concepts in that space today.”