No appetite for change

Never the most fashionable of brands, KFC has weathered the healthy living debate in the UK by sticking to its guns while high street rivals dithered, says Mark Choueke

When KFC brand manager Matthew Critchley left the fast-food company (MW last week) there were fears of a continuation in the recent trend of control being wrested away from the UK team and returned to parent company Yum! Brands in the US.

These worries may be confirmed when it becomes clear whether Critchley is to be replaced and, if so, where his replacement will come from. Claire Harrison-Church, KFC marketing director for four years, was replaced by Australian Jennelle Tilling last November after US KFC chiefs flew UK marketing executives to the US. They were taken to task over what bosses saw as a disappointing advertising campaign – the “Soul Food” work created by Bartle Bogle Hegarty.

A UK insider confirms that although KFC is continuing its expansion on these shores, the culture of KFC UK being allowed almost complete autonomy is changing. The source says: “Traditionally, KFC has left each of its markets well alone. But despite us having a great sales year here, it has opted to take more control over the past 12 months.”

Mintel figures released in March 2006 confirm KFC has reason to celebrate recent sales success. Regardless of a fundamental consumer shift towards healthy eating habits, the fried chicken takeaway and restaurant market has out-performed the burger bar market, which has suffered from being the focal point of the backlash against fast food.

In the same way that McDonald’s typifies the burger market, KFC is the dominant brand in the chicken sector. Smaller, regional rivals do not provide serious competition. True, Nando’s is an emerging force, albeit with a more upmarket positioning.

The obesity debate, together with the threat of Avian flu, has failed to halt the growth of the 1bn chicken market, which has seen an impressive real-term increase of 32% in sales since 2000, double the equivalent figure for burgers, according to Mintel. Menu development and innovation has proved easy in the fried chicken market with dishes such as wraps, strips, salads and coatings largely satisfying consumers looking for an inexpensive, tasty but “healthier” meal.

The KFC brand is well known to Britons, having been in the UK since 1965. Today, there are 635 KFC UK outlets, of which 282 are company-owned and the rest franchised. The company claims total sales of about 520m in the UK and Ireland, and though soft drinks reportedly account for 20% of turnover in a typical KFC restaurant, a wide range of meal deals is offered.

In 2005 the brand spent 17.7m on advertising and promotion – an increase of 26% on the 2001 spend – more than half of which was on television ads. One advertising executive with extensive experience of the fast-food sector says: “KFC’s ad spend alone makes it an attractive account to have, but there is also the fact that the company’s sales seem to have held up quite robustly.

“I think the brand is seen by many as a bit grubby. Fast food is becoming like cigarettes in that nobody within agencies really wants to work on the brands. Let’s face it, it isn’t a particularly ground-breaking industry for good young marketers or creatives to get into. That said, cheap binge eating is never going to go away, so you could argue brands like KFC are here to stay.”

One branding consultant agrees that there is “no real excitement about the stale KFC brand”, but another agency source praises the fast-food giant for sticking to its brief and avoiding the “consumer confusion” McDonald’s has caused through constant changes to its menu.

The source says: “KFC has never deviated from its path. Even with new products it put chicken at the heart of everything. Others got scared and meandered all over the place. So you’ve got McDonald’s, with profits stemming largely from burger and drinks sales, messing around with salads and Indian food.”

The fast-food sector as a whole is facing all sorts of trouble, from a Jamie Oliver-inspired Government war on obesity, to a nation of mothers who wish to limit the salt and fat intake their families consume.

But observers feel KFC is doing what it can to keep the brand on the side of the new, healthy-living consumer – it was one of the first fast-food chains to ban smoking in the UK and has pledged to cut salt by 30% across all its products. According to analysts, the fried chicken sector will see the fastest growth within fast food as consumers increasingly view chicken as a healthy alternative to red meat.

Timeline
1890: Harland Sanders is born in Indiana, US.
1930: Sanders opens his first restaurant in a gas station in Kentucky.
1937: The Sanders Court & Caf?dds a motel and expands the restaurant to 142 seats.
1953: Sanders begins franchising his chicken business.
1964: Kentucky Fried Chicken has more than 600 franchised outlets in the US, Canada and England. Sanders sells his interest in the US company for $2m (1m) to a group of investors.
1969: The Kentucky Fried Chicken Corporation lists on the NY Stock Exchange.
1982: Kentucky Fried Chicken becomes a subsidiary of RJ Reynolds.
1986: PepsiCo acquires KFC from RJR Nabisco.
1997: PepsiCo spins off KFC, Taco Bell and Pizza Hut into Tricon Global Restaurants.
2002: Tricon changes its corporate name to Yum! Brands.

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