KFC's fast casual concept not expected to cannibalize original brand

July 25, 2013 | by Alicia Kelso

KFC's fast casual spinoff, KFC eleven, hosted a preview event for media today. The restaurant is located in the Highlands neighborhood of the brand's hometown of Louisville, Ky. It is set to officially open on Aug. 5 and will feature lunch and dinner, as well as outdoor seating and a drive-thru.

The KFC eleven menu includes rice bowls, flatbreads, salads, Original Recipe boneless chicken, crispy bites, sides, desserts and beverages. Sides include waffle fries, mac & cheese, garlic smashed potatoes & gravy, crunchy coleslaw and a side salad.

Rice bowls retail from $5.99 to $6.69. Flatbread and salad options retail for $6.89 and include BBQ bacon ranch, Southwestern Baja, Sweet Orange Ginger, Kickin' Buffalo, Creamy Garlic Pesto and Caribbean Tango.

Beyond the food, the restaurant design is modern, mid-to-upscale, with a chute ordering queue, bar-style, table seating and booth seating, digital signage showcasing community news and other information, lamp lighting and artwork by local artists. (Check out some photos of the new concept).

QSRweb had the opportunity to chat with Anne Fuller, senior director of Development for KFC eleven, about the concept, its future plans and what makes it different from KFC, as well as other chicken players.

QSRweb: When did the idea to spinoff a fast casual KFC concept come up, and why?

Anne Fuller: It is a team effort that started in May 2012. It was born from us wanting to learn what was out there; what changes could we make to be meaningful to consumers, franchisees and the brand?

We spent six months learning where the trends were heading and came to this. We took KFC's positives and created something else out of it based on the food trends and consumer behaviors we studied. The menu came out of that pretty quickly.

QSRweb: Can you describe how it is different from KFC?

AF: People love KFC but it's not a frequent choice for many guests for some reason. We wanted to create a broad and balanced menu that could maybe get more frequency. Customers love KFC's Original Chicken and 11 herbs, but we wanted to lift that idea and bring it forward into a new offering that can be powerful. We didn't sit down and plan for this to be fast casual specifically, but it has a lot of characteristics that define the fast casual space.

QSRweb: Such as?

AF: A lot of the menu focus is on fresh produce. We have premium bread carriers, like a brioche bun and flatbread. All items come fried or grilled, which gives customers control, which is what they want.

We wanted food quality to be the focus, and that includes the fresh ingredients, fresh preparation, a transparent kitchen, an assembly line format where everything is made in front of you.

We also worked very hard to branch out our flavors; for example, we have barbecue, garlic, Southwest, Teriyaki, sweet orange ginger, Caribbean.

We want our guests to have variety and choice, where they can come in with a group and each get something different. They might not all want chicken. There are also a lot of women-friendly options, things that are better for you and flavorful. And there is a fully-developed kids' menu. We think women are leading many of the food trends and make a lot of decisions for families.

QSRweb: Some QSR brands are stepping up their menu to directly compete with the fast casual segment — Wendy's Pretzel Bacon Cheeseburger and Taco Bell's Cantina Bell lines, for example. Why did KFC branch off a new concept instead of going this route?

AF: We may go back to doing that. This is a springboard, an innovation location. We don't have any predictions on where we'll go. If the model works, then we'll make more decisions on where we're going.

QSRweb: Are there any expansion plans in the works right now?

AF: We do have a second location in the works. It will be in Louisville, but we're not sure exactly where yet. And it will hopefully be open by the end of the year.

QSRweb: How will you measure the success of the concept?

AF: We are going to do all types of testing — analyze data, consumer feedback and engagement.

We know we're going to get it seeded and launched. We know we want to create a team culture that is all about the food. Our territory manager and general manager both have restaurant backgrounds, and our assistant managers have culinary degrees. We want to have a food culture.

QSRweb: Do you have a timeframe of when this testing will be done?

AF: We hope to understand what's going on and where we're going to go from here sometime in 2014.

QSRweb: Are you worried about cannibalizing traditional KFC units at all, especially since there are many in the Louisville market?

AF: No. The majority of (KFC eleven's) menu is new products. We can offer a new menu with a few of KFC favorites, whereas existing KFCs feature very specific products, signature products that people visit for.

QSRweb: Do you think there is a void in the chicken category within the fast casual category?

AF: When we were looking at the marketplace, we saw a true opportunity in the chicken space, and with food that has fresh flavors. People eat broadly, even KFC's core consumers eat broadly, so that's also a huge opportunity.

Chicken is a healthy choice, a great carrier and it meets a lot of demand right now.

QSRweb: Of the chicken concepts that do exist, how will you differentiate yourselves?

AF: We are doing a couple of unique things. We're using Square's loyalty platform and we're looking at an aggressive campaign with loyalty. Most concepts will give you something for free after 10 visits, for example. We want to do that after five, and really get people interested and coming back.

Another thing we're doing is tying fundraising back into the community. So for opening day, we're going to donate 11 percent of sales to the local chapter of Junior Achievement. We're also open to having local groups sign up for a fundraiser night when 11 percent of sales will go to their causes.

And finally, we support local talent. The restaurant was designed locally, down to the facility design. All of the artwork is done by local artists.

These are ways to show the community we're happy about being here and supporting them, and hoping they'll do the same. It's about planting that seed.

Read more about operations management.

Topics: Chicken , Food & Beverage , Marketing / Branding / Promotion , Operations Management , Trends / Statistics

Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with FastCasual.com, QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.
View Alicia Kelso's profile on LinkedIn

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