News
Yum! outlines plans for growth, new menu opportunities
December 9, 2009
Yum! Brands Inc. outlined the company's plans for growth in 2010 at its annual investor update meeting Tuesday in New York, including its plans for growth and new menu opportunities.
The company plans to focus most of its growth efforts in Yum Restaurants International (YRI), with significant plans for India over the next five years. Yum! executives also outlined plans to increase "new sales layers opportunities" for KFC and Taco Bell, in the United States and internationally. Tim Jerzyk, senior vice president of investor relations/treasurer of Yum! Brands, said the company plans to allocate most of its capital for growth in China, YRI, U.S. Taco Bell and refranchising KFC and Pizza Hut stores in the United States.
David Novak, Yum! CEO, outlined the company's progress in 2009, noting that the company was No. 1 in international development for the year. He said KFC in particular made progress in 2009 in adding sales layers in three main areas: YRI in beverages with the Krushers line, China with breakfast and the United States with the Kentucky Grilled Chicken line. U.S. same-store sales continue to be impacted by competition on price in the quick-service category and by more consumers cooking at home. The company plans to pursue growth opportunities around the world, including in Europe, especially in Germany and Russia.
India also is a huge opportunity for growth for the company's brands, with the potential for 1,000 stores among its top three brands over the next five years. KFC opened 27 stores in the country in 2009, bringing its total to 72. KFC presents the biggest opportunity for YRI, although the company also will grow its Pizza Hut brand and introduce Taco Bell to the country in 2010.
Plans for KFC India include marketing the chain as an iconic youthful brand, targeting the country's young majority, said Niren Chaudhary, general manager for the company in India. Of India's 1.1 billion residents, 70 percent are under the age of 30. KFC will follow the chain's best practices in China and grow the brand incrementally over the next five years, bringing the total number of stores to 500 by 2015. The company also plans to expand its menu in that country to include vegetarian and non-fried options as well as test breakfast. It will also add delivery services.
Taco Bell India should have 100 stores by 2015, with a Mexican-inspired menu that features "spiced up" flavors, 20 vegetarian products and street-food prices, Chaudhary said.
Taco Bell USA
Greg Creed, president and chief concept officer for Taco Bell, outlined the company's opportunities in the United States. The chain's main goal is to become "The Other No. 1" QSR brand in the nation, directly targeting McDonald's. Plans for 2010 include adding new proteins and a value meal.
New proteins include shrimp and pork, with a Pacific Shrimp Taco featuring six marinated shrimp at $2.79 launching in the first quarter. The chain also will launch a grilled cantina line of soft corn tacos, which will feature chicken, steak and the new carnitas (pork). A third protein will be introduced later next year.
Taco Bell also plans to introduce a new Beefy 5-Layer Burrito to the value menu for 89 cents. It will be the first chain to add grilled chicken at a price point less than $1 with the Grilled Chicken Burrito for 89 cents on its value menu, Creed said.
Creed said the chain will improve its marketing as a healthful alternative as consumers rate the chain the lowest among healthful options. At the end of this month, Taco Bell will change the name of its Fresco menu to the Drive-Thru Diet, following Subway's lead by choosing a consumer who lost weight by choosing those menu items and exercising.
The chain will expand its test of breakfast in the United States. This is the third test for the chain in the morning daypart, but Creed said this test has great potential because it is co-branded with well known names, such as Jimmy Dean sausage, Seattle's Best Coffee and Cinnabon. Taco Bell will also continue to test more opportunities with beverages and desserts.
Other plans include introducing two new Fruitista Freeze flavors: Margarita and Orange Creamsicle, to expand coffee into other dayparts and to address the cooking-at-home trend with its home-meal-replacement product. The home-meal-replacement menu has done well in test and requires no capital investment, he said.
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