The revival of KFC
May 28, 2015
by Monica Watrous
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In an effort to revive its brand, KFC introduced the return of Colonel Sanders, played by comedian Darrell Hammond.
NEW YORK — Colonel Sanders is back, and not everyone is happy about it.
Efforts to revive the flagging KFC brand recently included the return of the late poultry pitchman, played by comedian Darrell Hammond of “Saturday Night Live” fame in new TV ads.
“So far the response has been about 80 percent positive, 20 percent hate it,” said Greg Creed, CEO of parent company Yum! Brands, Inc., during a May 27 presentation at the Sanford C. Bernstein Strategic Decisions Conference in New York. “But you know what? That’s better than 100 percent being indifferent. And that really is what’s important … we had lost relevance in the US. Sixty percent of millennials had not eaten KFC.
“So I’m very excited that this work is really distinctive and disruptive. And I am actually quite happy that 20 percent hate it, because now they at least have an opinion. They’re actually talking about KFC, and you can market to love and hate; you cannot market to indifference.”
Sales at the chicken chain have plummeted in the United States over the past decade, while sister brand Taco Bell has thrived on product innovation and resonance with millennial consumers.
“When I joined Taco Bell in 2001, each of the three US brands made about the same amount of money,” Creed said. “These days, Taco Bell probably makes three times what it made, and KFC probably makes about a third of what it made. So I think the upside in the US in making ourselves relevant again from a profit point of view is enormous.”
But the resurrection of the Colonel — as well as the “finger-lickin’ good” catchphrase — isn’t the only change under way at KFC. The chain may be launching delivery, too. Yum!, which owns Pizza Hut, also has been considering the option for Taco Bell.
KFC's food is well-suited for delivery because buckets of chicken hold temperature well, Creed said.
“I think the great thing about KFC food is that it is actually well-suited for delivery,” Creed said. “One of the challenges with Taco Bell is the food has a lot of hot stuff and cold stuff together, so delivering it is really a little difficult, but the great thing about buckets of chicken is … it holds temperature incredibly well.
“So I think that compared to some people in other QSR areas where their food will be, like Taco Bell, tough to deliver, I think KFC is set up with a menu offering that really sets us up to be great at delivery.”
Over the coming years, KFC also plans to refurbish its packaging, uniforms and dining room décor with retro touches and expand its menu with such down-home offerings as barbecue baked beans and slow-pulled chicken.
The chain’s performance has slowly improved in recent quarters on strength in international markets, but domestically the brand has been losing share to rivals Chick-fil-A and Popeyes Louisiana Kitchen.
Louisville, Ky.-based Yum!’s latest attempt at a brand overhaul has yet to bear fruit. Following last year’s launch of a menu revamp at Pizza Hut, executives in the recent quarter expressed disappointment in the pizza chain’s performance.
“This new platform has given our customers unparalleled variety with exciting new toppings, crusts and flavors,” Creed said during an April 22 earnings call with analysts. “Unfortunately, we haven’t been as effective as we would like with our marketing and need to balance its appeal to millennials with mainstream pizza customers.”
Yum! this week announced plans to remove artificial ingredients from menu items at Pizza Hut and Taco Bell. No word yet on whether KFC will follow suit, but the throwback campaign suggests the chain will remain true to its Original Recipe.