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- 07/31/14--03:35: _Chicken Scare Is Te...
- 09/04/14--14:48: _Why KFC And Pizza H...
- 09/24/14--12:52: _12 Reasons Why Eati...
- 10/08/14--08:22: _KFC Is Counting On ...
- 10/24/14--06:00: _Google Glass Could ...
- 11/04/14--08:29: _KFC Is Going Upmark...
- 11/04/14--10:39: _Here's How Much It ...
- 01/05/15--06:52: _KFC Is Testing Sell...
- 01/26/15--07:59: _KFC Just Released O...
- 02/05/15--08:32: _KFC is bringing bac...
- 02/11/15--13:11: _KFC Japan is releas...
- 02/26/15--04:49: _KFC is bringing an ...
- 03/12/15--03:00: _KFC might be pressu...
- 04/07/15--14:51: _KFC has a new menu ...
- 04/13/15--20:35: _The man who brought...
- 04/21/15--13:23: _Yum's China sales p...
- 05/19/15--08:22: _KFC is making 2 dra...
- 05/20/15--01:23: _The 10 things in ad...
- 05/21/15--01:48: _KFC has been testin...
- 05/29/15--08:04: _Tons of KFC custome...
- 07/31/14--03:35: Chicken Scare Is Testing Chinese Loyalty To American Fast Food
- 09/04/14--14:48: Why KFC And Pizza Hut Are Tanking In China
- 10/08/14--08:22: KFC Is Counting On These New Menu Items To Save Business In China
- 11/04/14--08:29: KFC Is Going Upmarket In The UK With This Fancy New Redesign
- 01/05/15--06:52: KFC Is Testing Selling Beer
- 02/05/15--08:32: KFC is bringing back popcorn chicken
- 02/11/15--13:11: KFC Japan is releasing a strange-looking burger
- 02/26/15--04:49: KFC is bringing an entirely new menu to the UK
- 04/07/15--14:51: KFC has a new menu item that copies Chipotle
- 04/21/15--13:23: Yum's China sales plunge wasn't as horrible as expected
- 05/19/15--08:22: KFC is making 2 drastic changes to beat the competition (YUM)
- 05/20/15--01:23: The 10 things in advertising you need to know today
- 05/29/15--08:04: Tons of KFC customers hate the new TV ad — and the CEO is thrilled
(Reuters) - A food safety scare in China is testing local consumers' loyalty to foreign fast-food brands, including McDonald's Corp and Yum Brands Inc, which owns the KFC and Pizza Hut chains.
Yum said on Wednesday that the scare, triggered by a TV report earlier this month showing improper meat handling by a supplier, Shanghai Husi Food, caused "significant, negative" damage to sales at KFC and Pizza Hut restaurants over the past 10 days. "If the significant sales impact is sustained, it will have a material effect on full-year earnings per share," Yum said in a regulatory filing.
Shares in Yum, which counts China as its No. 1 market, tumbled more than 6 percent in extended trading. The stock has dropped nearly 12 percent since Yum posted second-quarter earnings on July 17.
Officials from McDonald's in China and Hong Kong have not responded to requests for information on the impact on sales from the scandal, but McDonald's Holdings Co (Japan) Ltd on Tuesday scrapped its full-year earnings guidance after the China scare forced it to switch to alternative chicken supplies. A McDonald's Japan executive said sales had dropped 15-20 percent on a daily basis due to the scare.
Both McDonald's and Yum are looking to China - where consumers see foreign brands as offering better food quality - for long-term growth given the size of its population, growing middle class and rapid economic growth.
"Both of these stocks are banking heavily on China for their future growth," said Richard Brubaker, an adjunct professor at the China Europe International Business School and founder of the Collective Responsibility consultancy. "For Yum, this is a problem because it has a history of problems in China. For McDonald's, it's the sheer size of the problem and the inability to get product."
Yum, which has nearly 6,400 restaurants in China, had just begun to see its restaurant sales there recovering from a slide last year due to an avian food outbreak and a previous food safety scare. Yum has cut its global ties with OSI Group LLC [OSIGP.UL], the U.S. parent of Shanghai Husi Food. Yum said OSI was not a major supplier and the move had "minimal disruption" to the availability of menu offerings in China.
McDonald's, which has more than 2,000 restaurants in China, has had a long relationship with OSI and was more dependent on the supplier than Yum. Many McDonald's China outlets have been hit by meat shortages since the company ended its relationship with OSI there.
Around two-thirds of the more than five dozen consumers Reuters reporters spoke to in Shanghai, Beijing and Hong Kong on Thursday said they would scale back their visits to McDonald's, at least for now.
"For people like us, McDonald's and KFC are places to meet friends," said Yao Nanfang, a 16-year-old student in a shopping mall in central Shanghai. "We'll still go to McDonald's, but we'll order fewer meat products."
Diners in Hong Kong also said they were likely to eat less frequently at McDonald's, but noted that the chain's low prices made it hard to give up.
"I come to McDonald's less often now, but I won't completely stop coming because it's so much cheaper than other restaurants," said Nan Tang, who says he eats at McDonald's twice a week.
In Hong Kong, McDonald's has ended a promotion of its chicken McSpicy burger and shifted a membership program away from offering discounts on McNuggets, which it is not currently selling.
Following the TV report that alleged workers at Shanghai Husi Food used expired meat and doctored food production dates, regulators closed the plant on July 20. Police have detained five people including Shanghai Husi's head and quality manager.
Food safety has been a big concern for Chinese consumers after dairy products tainted with the industrial chemical melamine sickened many thousands and led to the deaths of six infants in 2008.
(Additional reporting by Sruthi Ramakrishnan in Bangalore, James Zhang, Emily Chung, Nikki Sun, Donny Kwok and Clare Baldwin in Hong Kong, and Shanghai and Beijing newsrooms; Editing by Lisa Shumaker and Ian Geoghegan)
If you thought Yum! Brands' (NYSE: YUM) struggles in China were finally over, think again. Shares of the global fast food giant fell nearly 3% early Thursday after it revealed its KFC and Pizza Hut subsidiaries have "experienced a significant, negative impact to sales following adverse publicity regarding improper food handling practices" by Shanghai Husi, which formerly supplied meat to both Yum! and competitor McDonald's.
Specifically, on July 21, a local news outlet revealed an undercover reporter had witnessed workers at the Husi factory using meat that had been dropped on the floor, and even mixing expired meat with fresh products. Unsurprisingly, Yum's China division's same-store sales for the third quarter ended Aug. 31 are now expected to decline around 13% from the same year-ago period.
Damage control 101
At the same time, however, Yum! also stated it plans to "vigorously pursue legal action" against the supplier to recover damages. What's more, Yum! reminded investors, "Our brands have proven resilient over time, and we expect this to be the case with this situation as well."
To be sure, this isn't Yum! Brands' first experience with damage control in the Middle Kingdom. Around this time last year, Yum!'s KFC was finally showing signs of a recovery in the aftermath of not only a tainted chicken scandal involving a different Chinese supplier, but also misconceptions surrounding whether the food was safe to eat amid an avian flu outbreak in the region. Similar to its latest situation, Yum! promptly severed ties with the offending supplier, and even implemented new quality-assurance measures in a bid to restore brand confidence.
Sure enough, those efforts appeared to be working by the time Yum! Brands announced first-quarter results in April. China Division systems sales, for example, had jumped 17% year over year on a combination of 7% unit growth, and 11% and 8% same-store sales increases from KFC and Pizza Hut, respectively. That outperformance continued in the second quarter, as Yum!'s China system sales jumped 21% year over year, again thanks to 7% unit growth and a 21% same-store sales increase at KFC.
Why Yum! Brands is staying the course
On one hand, it's worth noting that these particular supplier issues are largely out of Yum!'s control. The Chinese government also has promised to crack down with severe penalties for offending suppliers, and Yum! is rightly setting a "no tolerance" precedent by immediately ceasing to do business with these companies. At the same time, it stands to reason that, with each subsequent quality assurance issue, it could become more difficult for Yum!'s brand to recover.
On the other hand, it's admittedly frustrating that these situations keep cropping up for Yum! Brands in China, given the region's sheer potential for growth. For example, Yum!'s China division's operating profit came in at $777 million last year -- or more than 43% of its total -- on a slim operating margin of 11.3%. By comparison, Yum!'s U.S. operating profit was $684 million last year, but on an operating margin of 23.2%.
Given Yum!'s insistence that its brands will stand the test of time, however, it should come as no surprise that it recently affirmed that it's still on track to open at least 700 new restaurants in China this year alone. Given that sustained growth over the long term, the financial rewards could be immense if Yum! can ultimately put all the pieces together.
KFC is wildly popular in Japan.
The fast food chain has more than 1,200 locations there, making it the fried chicken chain's third-largest market behind the U.S. and China.
As sales decline in the U.S., KFC is focusing on Asian markets to bring in big profits.
Here are a few reasons KFC Japan is completely different from the U.S. version.
1. Dark meat chicken is popular.
Americans are crazy about all-white-meat chicken. In Japan, the patties, strips, and nuggets feature light and dark meat, as seen in this ad.
明日25日（木）より、「ゆず辛チキン」を期間限定で販売いたします。高知県産のゆず皮のさわやかな香りがチキンのジューシーな旨味をひきたてる、秋にぴったりの一品です。 pic.twitter.com/PjIFOs1YZ4— ケンタッキーフライドチキン (@KFC_jp) September 24, 2014
2. Rice is featured prominently on the menu.
KFC caters to local tastes by offering rice products, such as bowls and a shrimp patty. Featured below are Japanese Teriyaki and Spanish rice bowls.
A taste of Spain and Japan in bowls? Wonder what that taste like? Have your dinner in KFC and find out! :) pic.twitter.com/3EhcXIjUYN— Market! Market! (@MarketMarketBGC) September 23, 2014
3. Worker uniforms are a tribute to the Colonel.
KFC workers in Japan wear white uniforms that are a nod to company founder Colonel Sanders.
4. Milkshakes are one of the most popular items.
KFC Japan has milkshakes on the menu called "Krushers," which the company heavily promotes. Flavors include cookies-and-cream, berry, and mango.
5. It's way more expensive to eat there.
Japanese customers are willing to pay a premium for the American fast food experience.
"I recently went to KFC and ordered a 10 piece, two large fries, four biscuits and four small coleslaws,"writes Asian travel blogger Facing The Rising Sun. "The bill was over $43 — and that was without any drinks."
6. The Colonel mascot makes frequent appearances.
Colonel Saunders is much more prominently featured in KFC Japan's culture. The Twitter page frequently shows a mascot interacting with customers in the restaurant.
7. People flock there on Christmas.
Christmas isn't a national holiday in Japan, and only 1% of citizens identify as Christians.
But thanks to a successful marketing campaign in 1974, people flock to KFC on Christmas Day, according to Smithsonian Magazine.
"Many order their boxes of 'finger lickin' holiday cheer months in advance to avoid the lines — some as long as two hours," Smithsonian writes.
8. Fries are more popular than mashed potatoes and gravy.
Most Japanese customers automatically order fries as a side to their fried chicken. Mashed potatoes take on a different form — they are packed with cheese and bacon and then deep-fried.
9. Customer service is renowned.
"The customer service here is leaps and bounds ahead of that in the U.S.", according to the Japan-based food blogger Facing The Rising Sun.
KFC workers in Japan go through extensive culinary training.
キッズスクールを5月25日（日）、読売東京本社ビル店にて開催しました！今回も「オリジナルチキン」やサンドを実際に調理して、それをみんなで味わいました♪ご参加いただいた皆さま、どうもありがとうございました！＼(^o^)／ pic.twitter.com/RsoJcepCXW— ケンタッキーフライドチキン (@KFC_jp) June 2, 2014
10. The company has some wacky promotions.
In honor of "Colonel's Day," KFC Japan gave away some crazy chicken-themed computer accessories. Free gifts included a computer mouse shaped like a drumstick.
11. The biscuits look like donuts.
Unlike the buttery biscuits in the U.S., KFC Japan's biscuits are shaped like donuts, and have a sweet flavor. While the biscuits clearly resonate with the Japanese palette, Americans on a Reddit thread called them "terrible" and "bland."
12. Delivery is widespread.
It's easy to get your KFC delivered in Japan. Couriers bring your food on company-themed motorbikes.
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KFC parent company Yum Brands was hit hard by a Chinese food safety scandal.
The company cut the profit outlook in a recent earnings announcement. Sales in China fell 14% in the most recent quarter as consumers doubted the brand's quality.
Executives told analysts that it was counting on some new rice dishes to revive sales. Because these dishes are seen as more high-end, the KFC team believes they could improve perception of the brand.
Here's the "Bacon Mushroom Chicken Rice." It features crispy, boneless chicken in a bacon mushroom sauce with rice and a side of pickles.
This "Teriyaki Chicken Chop Rice" has a bone-in piece of chicken with rice in a sweet sauce.
And here's the "Curry Pork Chop Rice," featuring fried pork and vegetables in a spicy sauce.
KFC is the largest restaurant chain in China, with more than 4,500 locations.
A supplier for KFC and McDonald's was shut down in July after a news report showed factory workers using expired meat.
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Much has been written about how technology could be used to replace humans in the service sector, but a recent USA Today story suggests it can also save companies money by making workers more efficient.
KFC, one of the world's largest fast-food chains, recently ran a trial in which it trained employees using a software program on Google Glass that could potentially help its parent company, Yum Brands, save millions of dollars in labor costs.
The training program was developed by Ankur Gopal, a Kentucky engineer and the CEO of the mobile technology company Interapt.
When wearing Google Glass, employees would see a series of on-screen prompts giving them step-by-step directions for tasks like making a sandwich, shutting down a fryer, or closing a store for the night.
USA Today reports that Gopal said Yum Brands, which also owns Pizza Hut and Taco Bell, calculated that it could save nearly 2% of its labor costs by adopting his program in their stores. These savings, a result of a faster training process, would come to tens of millions of dollars across the company's 8,000 locations.
A spokesperson for KFC tells Business Insider no such calculation was made and that he could not confirm Gopal's estimate.
"I was one of the guinea pigs, and in less than two hours I was making KFC chicken as if I'd worked there for a long time," Gopal tells USA Today.
The automation of work done by fast-food employees has become an increasingly hot-button topic as workers across the country have pushed the big national restaurant chains to raise their wages to $15 an hour.
One line of thinking, summed up by a recent Wall Street Journal editorial, is that if employees don't want to work for the wages they're currently being paid, fast-food companies can save themselves the hassle by employing computerized machines to do their jobs, instead.
Meanwhile others, like the New York Times columnist Paul Krugman, have said that it would be impossible to replace many fast-food employees because they work in a "common-sense industry" that needs the flexibility only a human can provide at this point in time.
It's unclear whether using Google Glass to make training more efficient would allow companies to cut jobs, or whether it would merely get workers the company was already going to hire up to speed in a shorter period of time.
KFC has unveiled a radical redesign of its UK restaurants which make its interiors look more like upmarket hipster eateries than fast-food fried chicken joints.
Design Week reports that the "informal and stylish" interiors — which feature exposed ceilings, butchers block tables, low-hanging copper lighting, artwork and textured brick-effect walls — are set to roll out nationwide across KFC's 870 branches from March 2015.
But its Bracknell store has already received a swish makeover.
The interior of KFC Bracknell was a clean, but a fairly drab affair.
Now it's looking far more cool.
Gone are the garish benches.
See the rest of the story at Business Insider
Owning a fast food franchise can be an incredibly lucrative business, but it requires a lot cash.
You must have at least $750,000 in liquid assets to open a McDonald's or Taco Bell restaurant, for example. To open a KFC, your net worth must be at least $1.5 million.
On top of initial investments that can exceed $1 million, most chains charge monthly fees that can cost up to 12% of gross sales.
We compiled a list of some basic financial requirements for becoming a franchise owner, based on information provided by six major fast food chains.
Following the name of each restaurant chain is the total startup costs to obtain franchisee rights and open one new restaurant in the US.
Taco Bell: $1.2 million to $2.5 million
Minimum net worth: $1.5 million
Minimum liquid assets: $750,000
Franchise fee: $45,000
Royalty fee: 5.5% of gross sales
Average sales per unit in 2013: $1.4 million
Wendy's: $2 million to $3.5 million
Minimum net worth: $5 million for new multi-unit franchisees or franchisee groups
Minimum liquid assets: $2 million
Franchise fee: $40,000 per restaurant
Royalty fee: 4% of gross sales
Advertising fee: 4% of gross sales
Average sales per unit in 2013: $1.5 million
KFC: $1.3 million to $2.5 million*
Minimum net worth: $1.5 million
Minimum liquid assets: $750,000
Franchise fee: $45,000
Service fee: 4% of gross sales
Advertising fee: 5% of gross sales
Average sales per unit in 2013: $942,000
McDonald's: $955,708 to $2.3 million
Minimum liquid assets: $750,000
Franchise fee: $45,000
Service fee: 5% of gross sales
Average sales per unit in 2013: $2.5 million
Pizza Hut: $295,000 to 422,000
Minimum net worth: $700,000
Minimum liquid assets: $350,000
Franchise fee: $25,000
Service fee: 6% of gross sales
Advertising fee: 2.5% to 3% of gross sales
Average sales per unit in 2013: $861,000
Subway: $116,000 to 262,850
Minimum net worth: 80,000 to 310,000
Minimum liquid assets: $30,000 to 90,000
Franchise fee: $15,000
Royalty fee: 8% of gross sales
Advertising fee: 4.5% of gross sales
Average sales per unit in 2013: $490,000
*According to FranchiseDirect.com
SEE ALSO: Why Chipotle Doesn't Franchise
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Fast food company KFC is hoping to sell beer and cider at a new concept store in western Sydney. The company has applied for a liquor licence for the new store on Church Street, Parramatta, as the cricket sponsor continues to lose market share to a range of smarter, fresher rival brands.
The move comes after McDonald’s began trialling a new, upmarket concept known as The Corner in Sydney’s inner west just before Christmas.
Fairfax Media reports the store will be named KFC Urban, and in a statement the company confirmed it “hopes to introduce a new KFC experience in Parramatta’s CBD in the near future, serving beer and cider as part of its menu”.
The store will dump the chain’s usual barber shop pole colours and gaudy look for a more sleek interior by Australian retail design firm The Great Indoors with timber-lined windows and exposed ceiling beams.
The new store seems to be modeled on KFC Fresh in Canada. Two stores opened in Toronto last year with a new look and menu that includes “the world’s best chicken hand-breaded with your choice of one-of-a-kind hand-spun sauce”, as well as grilled chicken dishes and salads, alongside beers.
KFC’s shift comes as some of Australia’s best chefs have been moving into the fast food market, with Rockpool’s Neil Perry opening The Burger Project in Sydney two months ago. As well as burgers and hot dogs for under $10, it also sells wine and beer.
Other fast food competitors such as the Mexican taqueria Guzman y Gomez offer beers, tequila and frozen margaritas at fully licensed dine-in restaurants.
The KFC licence for Parramatta has yet to be approved by the NSW Independent Liquor and Gaming Authority.
KFC has introduced a hot dog wrapped in a cheese-stuffed chicken breast.
The so-called Double Down Dog has caused a stir on social media.
It appears to be a hot dog version of the infamous "Double Down," a sandwich that uses chicken patties in place of bread.
Only 5o items are available at participating restaurants in the Philippines, according to an advertisement.
Kim Bhasin at Bloomberg spotted a photo of the real thing.
While this menu item is bizarre, it represents a few food trends.
Restaurants have been ramping up offerings of protein as more diners watch their carbs. Taco Bell released an entire menu of protein-heavy items last year.
And the Double Down Dog's popularity on social media is free advertising for KFC.
Here's a photo of the original Double Down.
SEE ALSO: The Worst Items At 15 Fast Food Chains
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Kentucky Fried Chicken is bringing back a popular retired item.
The company is introducing popcorn chicken nuggets.
KFC previously had an item on the menu called popcorn chicken, but that was discontinued in 2011.
Those who enjoy fried food will love this poppable, snackable take on chicken nuggets.
KFC advertised the nuggets as "100% white meat. The way nuggets should be."
The company also wrote:
"KFC Popcorn Nuggets are 100% white meat, extra crispy, and made from the world’s best chicken. Grab them on the go or add them as a side to your next meal. Either way, you won’t look at nuggets the same ever again."
KFC has already made headlines this week with KFC Korea’s Fire Double Down—but that’s not enough for the world-famous chicken chain. In Japan, the KFC empire is launching flavor missiles heard ’round the world with its very first beef-based hamburger, the “Bistro Hamburg.”
Is it any good? The chicken chain roped Shuzo Kishida, chef-owner of Quintessence—a three Michelin-star winning restaurant in Tokyo from 2008 to 2011—into approving the taste in the ad spot below.
We know it’s a commercial, and Kishida was paid to participate, but KFC seems pretty confident about the new upscale approach they’re trying with their 30% pork, 70% beef patty covered in a mushroom demi-glace and served on a burger bun.
An a la carte Bistro Hamburg will set you back ¥490 ($4.11 US), or you can grab a combo meal that comes with coleslaw and your beverage of choice for just ¥770 ($6.46) according to Burger Business.
Similarly, at KFC UK, those aren’t chicken sandwiches; they’re all “burgers,” all the time. It’s worth noting that poultry masquerading as patties like this is probably why UK English takes the time to call beef ones “beef burgers.”
In any case, this is the very first time that KFC has launched any kind of beef-based burger patty anywhere in the world. BB notes that KFC doesn’t currently offer any kind of sandwiches (chicken or otherwise) on its U.S. menu except for the Doublicious and the Chicken Littles.
What’s stopping them from bringing some of these creative sandwich creations stateside? No clue. If White Castle can successfully launch Chicken Rings, why can’t KFC successfully launch a beef burger? We’re also sure that Fire Double Down would sell here like actual hotcakes. Hopefully KFC U.S. is listening.
More from First We Feast:
KFC, The US fried chicken chain, announced yesterday that it was planning to bring edible coffee cups to the UK.
But the so-called "Scoffee-ee Cup"— made of biscuit wrapped in sugar paper and designed to celebrate the fast food chain's new range of coffee— appears to be just one string to KFC's new lunch time bow.
"We want to freshen things up," Jenny Packwood, head of communications and branding, told Business Insider UK. It's part of an effort to evolve the KFC brand.
Packwood says the company is working on a new lunch time range in a bid to appeal to a more "contemporary audience," rather than the regular weekend crowd looking for greasy food after, say, a heavy night of drinking.
The chain is revving up excitement for its new menu with its edible coffee cups, which were developed in partnership with London food futurologists the Robin Collective. The inside of the cup is made from a layer white chocolate that doesn't melt when it gets hot. According the KFC, the coffee stays hot and the biscuit remains crispy.
There's no date yet for when the cups will be available in store. The company tells Business Insider UK that it's still working out how to create them on a mass, marketable scale.
"We don't know when we'll be able to launch them," Packwood says. "They're with our Innovation Team but these things take time. We didn't say anything about summer. It could be 6 months, it could be 18. We found people see coffee as an affordable, daily indulgence, so we want to make that treat a little bit more special."
What else is KFC planning?
"We're going to launch a range of salads," Packwood said.
Alongside the salad push, Packwood says the Innovation Team is working on a new burrito for the UK, which is likely to arrive before the edible coffee cups.
She explained: "We're always looking at our menu. We've got stuff that's being tested in small areas of the UK. Burritos haven't launched yet but they're our big push for this year."
Disappointingly, Packwood only laughed at the suggestion of an entire edible Bargain Bucket — probably the company's most famous food offering.
LOS ANGELES/CHICAGO (Reuters) - KFC, the world's largest chain of fried chicken restaurants, may face pressure from consumer and environmental groups to change how its poultry are raised after McDonald's Corp said it would switch to chicken raised without human antibiotics.
McDonald's will phase out chicken raised with antibiotics that are important to human health over two years to allay concern that use of the drugs in meat production has exacerbated the rise of deadly "superbugs" that resist treatment, Reuters reported last week. Within days, retailer Costco Wholesale Corp told Reuters it aims to eliminate the sale of chicken and meat raised with human antibiotics.
KFC is owned by Louisville, Kentucky-based Yum Brands Inc, which has no publicly stated policy on antibiotic use in the production of meat it buys. Chick-fil-A, another chicken restaurant chain that competes with KFC, says about 20 percent of the chicken it serves is raised without any antibiotics, and that its entire supply chain will be converted by 2019.
Both McDonald's and Yum are stepping up efforts to win back younger and wealthier diners lured away by chains such as such as Chipotle Mexican Grill Inc and Panera Bread Co, which boast antibiotic-free meats and other high-quality ingredients. Yum's KFC restaurants in China two years ago suffered a massive sales hit following local media reports that a few poultry farmers supplying KFC fed excessive levels of antibiotics to their chickens.
"The train has left the station," Bob Goldin, a food services company consultant at Technomic in Chicago, said of McDonald's influence on U.S. chicken production standards.
Yum, which also owns the Taco Bell and Pizza Hut chains, declined to discuss its standards for antibiotic use in meat production.
"The chicken served in our U.S. restaurants is USDA high quality, and free of antibiotics," the company said in an emailed response to Reuters queries.
The antibiotic-free statement refers to a lack of residue in the meat served at its restaurants and not the practice of delivering antibiotics to chickens before they are slaughtered, said Steven Roach, food safety program director at Food Animal Concerns Trust in Chicago.
The U.S. Department of Agriculture has three classifications for poultry, A, B, and C, and doesn't have a "high quality" designation for chicken. Poultry rated A is what's typically found at retail, while poultry rated B or C is usually used in further-processed products where the meat is cut up, chopped, or ground, according to a USDA website.
NOT PART OF THE CONVERSATION
McDonald's told Reuters it worked with a wide range of stakeholders, including environmental group Friends of the Earth, to develop its U.S. chicken guidelines. Yum and its brands have ignored requests for information regarding its antibiotic policy, said Kari Hamerschlag, senior program manager for Friends of the Earth's food and technology program.
"They have so far not answered any of our emails or phone calls," said Hamerschlag, who is working with other advocacy groups to persuade food companies to change their supplier standards to exclude animals raised with the routine use of antibiotics. By contrast, McDonald's was "very responsive" to the groups' requests, she said.
Other groups working with Friends of the Earth to cut antibiotics from chickens and other meats include the Natural Resources Defense Council, Consumers Union and the Center for Food Safety. Friends of the Earth said its interest in antibiotics has to do with animal agriculture's connection to the environment and human health.
KFC supplier Tyson Foods Inc did not comment. Other U.S. chicken producers that have supplied Yum either declined to comment or could not be reached. It’s not known who KFC’s biggest supplier is or how many chickens KFC buys a year.
In 2012, Chinese media reports about excessive antibiotic use by a few KFC chicken farmers hammered sales there. The country has more than 4,800 KFC restaurants and accounted for nearly half of Yum's 2014 operating profit. In response, Yum dropped some 1,000 small poultry farmers from its supply chain and launched a public relations campaign to reassure diners about the quality and safety of its food.
Yum operates separate supply chains in China and United States. While antibiotics have made for big headlines in China, the issue also has surfaced at home.
A Reuters investigation last year found that KFC supplier Koch Foods Inc from November 2011 to July 2014 had given some of its flocks antibiotics critical to fighting human infections, even though its website stated otherwise.
The Chicago-based chicken producer changed the language on its website after questions from Reuters about its use of virginiamycin, an antibiotic included in a class considered "highly important" to fighting infections in humans. At the time, Koch said it has no plans to discontinue the use of virginiamycin, which it says may be used to prevent a common intestinal infection in chicken.
Koch did not respond to interview requests for this story.
KFC US said at the time that its "supply partners must adhere to our strict standards and specifications, which in some cases are more stringent than the FDA's regulations." It declined to comment this week.
(Editing by Michele Gershberg and John Pickering)
KFC has a new line of chicken and rice bowls that it hopes will attract millennials.
The bowls come in two flavors: Sweet n' Spicy BBQ and hand-pulled honey barbecue chicken, reports Bruce Horovitz at USA Today. They come topped with cheese and ranch sauce.
One of Chipotle's key menu item is a burrito bowl which comes with rice, beans, protein, salsa, sour cream, and cheese.
"We want Millennials to know that we're not just buckets of chicken," Ariel Olivo, marketing brand manager at KFC, told USA Today.
KFC has struggled to attract young people, who are increasingly going to Chick-fil-A and other fast-casual restaurants.
In 1999, KFC controlled 40% of the market, while Chick-fil-A had just 9%.
Today, Chick-fil-A is the "category leader," with a 26% share compared with KFC's 22%.
The company also outsells KFC.
Chick-fil-A's sales in 2013 passed $5 billion, compared with KFC's $4.2 billion
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The man who brought KFC to Britain and one of only a few people in the world to know its "secret" recipe has vowed never to eat it again - branding it "dreadful".
Raymond Allen became a personal friend of Harland "the Colonel" Sanders after meeting during a conference in Chicago 50 years ago.
Shortly afterwards he opened the first franchise in the UK in Preston, Lancashire, and helped establish the business across Britain in its early years.
Mr Allen still has a personal hand-written copy of the recipe which is believed to be made up of 11 herbs and spices - and is a closely guarded secret by the firm.
But the 87-year-old, from Jersey in the Channel islands, said the company has strayed so far from its original concept it's been "ruined" and would never set foot in one again.
He said: "We have got one where I now live, but I would not go in there. I don't use it and I think it is dreadful. The company has ruined the product.
"Instead of staying with one good thing that was sellable, they have tried to compete with the other fast food units. They should have just stuck with the chicken."
His wife Shirley, 84, said: "We tried KFC only once about a year ago.
"We had the traditional original chicken but there were so many different products it was difficult to know what to order. I don't think we will go back."
After the chance meeting in Chicago, Mr Allen helped Sanders establish the UK side of his empire while he was still a small-time restaurant owner in Louisville, Kentucky.
He also gave him valuable advice on the legal side of the business including patents and was paid to seek out suitable locations for other branches across the world.
He said: "The Colonel was a very kind man, who was very forthright.
"But at the time we met he was a small-time Southern State restaurant owner, and I knew a lot about patents or registered trademarks.
"We had heard about him before the meeting. But when we first met him, he had only one franchisee in America who sold the chicken as a menu item in his restaurant.
"We were in the fast food business and thought it would be the ideal product to sell in a takeaway."We had several Wimpy bars so decided to convert them into KFC. That is what we did with the first one in Preston."
Mr Allen said he has a personal hand-written copy of the secret recipe for the unique taste of KFC chicken which is believed to be made up of 11 herbs and spices.
He said: "It is a lengthy recipe. I think there are 11 herbs and spices but I can't remember it off the top of my head so I couldn't tell you even if I wanted to.
"But it is locked away in a safe in a bank. We don't really get asked much about it. Not many people know about our involvement in it.
"We are a low key and private family and don't often talk about it. I have no idea how much it is worth but I would never sell it."
At the peak of Mr Allen's expansion of the franchise, he was opening a new shop every week through cash flow.
He said: "We were in a race against time with McDonalds as we both wanted to get the best sites.
"We wanted to expand a bit quicker than that so I walked the streets of London to go to a bank.
"We needed £100,000 trying to raise the money - but all the banks said there was no future in the business."
His company KFC UK Ltd, was eventually able to obtain a loan from Heublein Inc, a USA company which at the time owned Smirnoff Vodka.
He said: "They saw how well we were doing and lent us the money on condition that we sold the business once we had opened 100 units. That was what we did."
Mr Sanders had started his KFC business in 1930 at a service station in Corbin, Kentucky, where he began cooking for hungry travellers who stopped there for fuel, using a secret recipe for the coating of the restaurant's fried chicken.
It became so popular that by 1935 the Governor of Kentucky made Mr Sanders a Kentucky Colonel in recognition of his promotion of the American state.
Following the meeting Mr Allen acquired the rights to expand the KFC franchise outside the US, and returned home with big plans.
He said: "It was slow to catch on at first because people didn't know what it was.
"In the UK in those days chicken was something you ate for Sunday dinner. It was way before its time. We had to give it away to passers-by initially.
"We would only use fresh chickens, and they had to be two and a half pounds in weight. It was initially difficult to source the chickens because of the demand."
In recognition of his achievements in business, Mr Allen was named a Freeman of the City of London in 1979 and was commissioned a Kentucky Colonel in 1965.
(Reuters) - Yum Brands Inc, owner of KFC and Pizza Hut chains, on Tuesday said business in its biggest market China is recovering from a meat scare at one of its minor suppliers and the division would finish the year strong.
Yum's comments on China, its No. 1 market for revenue and profit, sent company shares up 4.5 percent to $84.52 in extended trading.
Yum said China sales at established restaurants fell less than expected for the first quarter as it works to recover from allegations of improper meat handling at OSI Group's Shanghai Husi Food Co Ltd, which was a small supplier to Yum but a key supplier to rival McDonald's Corp. Both companies immediately stopped using the supplier.
Yum is making "continued progress" in China, Chief Executive Greg Creed said in a statement. Creed also stood by Yum's earning forecast.
"We will deliver full-year EPS growth of at least 10 percent, with a strong second half in China and solid brand-building initiatives under way at each of our divisions," Creed said.
Same-restaurant sales in China, where Yum is the biggest Western brand with nearly 6,850 establishments, declined 12 percent for the latest quarter on continued fallout from the Shanghai Husi scandal.
Analysts polled by Consensus Metrix had expected China sales to drop 14.4 percent.
Yum China's same-restaurant sales fell 16 percent for the fourth quarter and were down 14 percent in the third quarter. They were up 15 percent in the second quarter, which ended roughly a month before news of the supplier scandal broke on July 20.
"Slowly but surely, it's turning," Edward Jones analyst Jack Russo said of Yum's China business, which has suffered two food safety scares in two years. "It's still a long way to go."
Consumer perceptions have improved in China, where sales also got a lift from KFC's ongoing premium coffee rollout, spokesman Jonathan Blum said.
Yum Brands' first-quarter net income fell more than 9 percent to $362 million, or 81 cents per share, from a year earlier.
Foreign currency translation took a $20 million bite out of operating profit during the latest quarter, when revenue decreased to $2.62 billion from $2.72 billion.
Yum will host a conference call with investors and analysts on Wednesday morning.
Yum's China first quarter included only the months of January and February, while Yum Brands' first quarter ran from Dec 26 to March 21.
(Reporting by Lisa Baertlein in Los Angeles; editing by Gunna Dickson)
After a 21-year hiatus, KFC is bringing Colonel Sanders, its founder and brand mascot, back to its advertising to celebrate 75 years since the fast-food chain's secret fried chicken recipe was created.
"The Colonel" returns to TV ads next week with a new voice and face: that of actor, comedian, and former "Saturday Night Live" regular Darrell Hammond. "KFC is paying me in chicken," Hammond says in a press release.
The refresh doesn't end there. KFC is also rolling out a new, fancier restaurant design. The new designs had been tested in locations in Las Vegas and Louisville, Kentucky, but stores nationwide will be getting a refresh in the coming months.
Here's the kind of design the stores will be getting on the outside:
And here's a sample of the new interior:
And as with any fast-food marketing campaign, some new items are being added to the menu.
Kentucky baked beans with slow pulled chicken:
Finger Lickin' Good Sauce
And Dole Classic Lemonade, served medium, large, and by the half gallon.
Colonel Harland Sanders had a colorful life. As KFC tells it in a press release, he was a farmhand, Army mule-tender, locomotive fireman, trainee lawyer, insurance salesman, amateur obstetrician, ferryboat entrepreneur, and political candidate. He was a 65-year-old chicken salesman when he created his secret blend of 11 herbs and spices.
Here's the real Colonel Sanders with a bucket of KFC:
And this is Hammond as Colonel Sanders. Uncanny.
The TV campaign starring Hammond, created by Wieden+Kennedy, has three separate ads.
This spot is called "Bucket In My Hand"
And this is The Colonel's "mandolin band."
In addition, KFC has also created a microsite where you can play an 8-bit Atari-style game called "Colonel Quest."
So while most marketing refreshes come at a time when companies are attempting to revive their businesses or move in a new direction, this effort genuinely seems like a celebration of KFC's heritage.
KFC US chief marketing officer Kevin Hochman said in a press release: "Colonel Harland Sanders’ iconic legacy and world-famous Original Recipe chicken are what set Kentucky Fried Chicken apart from the rest. His entrepreneurial spark and unrelenting appreciation for hard work, philanthropy, and showmanship (or what he called "a little Colonel-ing") are exemplary of the 'American Dream' ... The Colonel has always been at the core of everything we do here at Kentucky Fried Chicken. The 75th anniversary is the perfect time to give him back to the people and remind everyone of what we're all about."
Good morning. Here's everything you need to know in the world of advertising today.
1. Adblock Plus has launched a mobile browser. That could prove a costly headache for companies like Google.
2. These are the hottest pre-IPO ad tech startups of 2015. These are the private companies that could be filing for an IPO or subject to acquisitions in the coming months.
3. The Pirate Bay has a new logo. It sends out a strong message to the authorities trying to shut it down.
4. These are the most-chosen brands in the world. Kantar Worldpanel has released its annual rankings of the biggest CPG brands.
5. Gurbaksh Chahal, the ad tech CEO ousted from Radium One after pleading guilty to domestic violence was arrested for allegedly kicking another woman. The San Francisco Business Times reports that Chahal allegedly attacked a woman he was dating and kicked her repeatedly in the leg.
6. KFC is making two big changes to beat the competition. It is bringing back its Colonel Sanders mascot to its advertising and giving its restaurants a clean new redesign.
7. Marissa Mayer has explained why it never made sense for Yahoo to merge with AOL. Yahoo doesn't want to be in the business of helping other sites monetize, like AOL, she said.
8. Actor John Hamm has revealed what he thinks happened to his character Don Draper after the "Mad Men" finale. We won't reveal any spoilers here.
9. Amazon's Jeff Bezos has appointed the first woman to a highly coveted role. Maria Renz is the new technical advisor to the CEO, or his "shadow."
10. Pinterest has announced a whole series of updates to its advertising product including new video Promoted Pins. The company told Business Insider it has "the best kind of business model."
KFC has trialled disposable paper typing trays in Germany to make it easier for smartphone users to browse the web without getting troublesome grease and bits of chicken on their devices.
The brand, which acknowledges its propensity to cause mess with the "Finger Lickin’ Good" proposition, created a quick fix for those looking to embark on a working lunch.
Instead of having to sully smartphones or tablets with greasy fingerprints, the firm tested a number of super thin, rechargeable wireless keyboards which can connect with devices via Bluetooth.
The week-long campaign, ran by Serviceplan, Germany, was sadly a marketing stunt although it does indicate that the firm is at least taking a serious look at integrating technology with its overall in-store vibe.
Starbucks for example is experimenting in the UK with wireless charging points to give consumers — and their smartphones — a welcome boost.
This comes after the KFC sparked a return of the iconic Colonel Sanders to its marketing material in a move coincidentally preceded by the return of the Hamburglar to McDonald’s social channels.
KFC just brought back the brand's mascot, Colonel Sanders, to its TV ads after a 21-year hiatus — and some people aren't thrilled about it.
One out of five people hate the ads, according to Greg Creed, the CEO of KFC parent company Yum! Brands.
But Creed says that's great news for KFC.
"So far the response has been about 80% positive, 20% hate it," Creed said at a conference in New York on Wednesday, according to industry journal Food Business News. "And I am actually quite happy that 20% 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."
He said KFC has "lost relevance" in the US, noting that 60% of millennials had not eaten at the fried chicken chain.
Chick-fil-A last year surpassed KFC to become the No. 1 chicken chain the US by sales — with just a fraction of KFC's stores.
Chick-fil-A had about 1,900 US stores last year and $6 billion in sales, compared to KFC’s 4,800 stores and $4.2 billion in sales.
KFC is hoping that the Colonel, who is played by comedian and former "Saturday Night Live" regular Darrell Hammond, will strike a chord with millennials.
The company is also trying to boost sales, which grew 3% last year, by redesigning its restaurants with this new interior:
"When I joined Taco Bell in 2001, each of the three U.S. brands [owned by Yum!] made about the same amount of money," Creed said, according to Food Business News. "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 U.S. in making ourselves relevant again from a profit point of view is enormous."
Here's the new ad starring Colonel Sanders.
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