KFC’s Comeback Story Takes Flight
The Big Chicken silently clucks its beak and rolls its eyes. At 56 feet tall—about five stories—it peers over not just the nearby interstate, but almost all of Marietta, Georgia. At the chicken’s base, a marching band plays as people gather on an impromptu red carpet and take pictures. The mayor, Steve “Thunder” Tumlin, is at hand, dressed in an all-white suit. Beside him is a similarly clad man, this one a bit shorter and donning horn-rimmed glasses, a pointed goatee, and black necktie. Nearby, a “Little Chicken” mascot makes the rounds, posing with visitors.
If it sounds like a circus has come into town, that’s because it has—or rather, it has returned after a short hiatus. In May, KBP Foods reopened the fabled KFC franchise location after closing in January for more than $2 million worth of renovations. The revitalized “Big Chicken” store is just one example—albeit a sizable one—of KFC’s latest play at reincarnation.
Over the past decade, the fried chicken titan has watched its star decline as long-time adversaries like Chick-fil-A and Popeyes were on the upswing. Within the Yum! Brands family, KFC has lagged far behind top achiever Taco Bell and even trailed Pizza Hut, which has been beset with its own woes.
But over the last couple of years, KFC has taken a multipronged approach to turning things around, proving that this bird still has some pluck in it.
“As we started this brand turnaround, we really went back and started with, What’s the DNA of KFC? And what’s our brand positioning? And how do we bring this great, iconic brand to life in the U.S.?” says Brian Cahoe, chief development officer at KFC. “That’s the lens that we’ve taken everything through in this journey.”
In 1991, the brand had jettisoned its original name of Kentucky Fried Chicken in favor of the snappier acronym. But as consumers find themselves nostalgic for days bygone, many brands are following suit, leaning back toward classic and authentic. For KFC, the decision to return to its roots also made sound business sense.
“When Kentucky Fried Chicken was at its best and growing the fastest, the colonel and his values were at the center of everything we did. … Those values are critical to what makes Kentucky Fried Chicken so great,” says Kevin Hochman, brand president and chief concept officer.
Hochman, who was promoted from chief marketing officer earlier this year, helped spearhead the company’s comeback. It seems fitting that a marketing specialist would be such an integral player in KFC’s renewed growth; after all, Harland “Colonel” Sanders called himself the No. 1 chicken salesman.
At first glance, KFC’s turnaround might appear as nothing more than smoke and mirrors: off-the-cuff ads, flashy new flavors, and refurbished stores with screaming-bright colors. But for all of its staging, the process has been a serious one with high stakes. Over the past six years, the company has closed more than 1,000 domestic stores. Ten years ago, KFC ranked No. 7 on the QSR 50, besting the likes of Chick-fil-A and sister concept Pizza Hut with system-wide sales of $5.3 billion.
Today paints a very different picture. Like many other legacy brands, KFC did not fare so well through the Great Recession as emerging fast casuals presented a more indulgent yet economical option for cash-strapped consumers.
But for the first time in nearly a decade, the vitals are showing signs of recovery. Over the past two fiscal years, system-wide sales have finally grown, and the brand has posted 11 consecutive quarters of same-store sales growth. KFC also climbed one spot on the QSR 50 list this year (owing in no small part to the lingering damage from Chipotle’s food-safety woes, which knocked it down a rung).
Skeptics might dismiss these numbers as an anomalous bright spot in an otherwise dim future, but other brands have proved it’s possible to surmount the odds.
“It’s tough to take a legacy brand and turn that big ship in the right direction. It’s not easy to do that, but [KFC] is doing it well,” says Tim Hackbardt, CEO of BrandTrip Partners, a consulting group that works with restaurant groups. “Similarly, Arby’s has been doing a fantastic job. I think those guys are right in that same space. … They’re legacy brands, and they have good stories in there. [KFC] is very similar; they’re just a little behind that Arby’s curve.”
So what are the keys to KFC’s reinvention? While not an exhaustive list, its efforts can mostly be distilled into three categories: branding and marketing, menu development, and design, including the functional and the flamboyant.
A crowd of Colonels
Wallpaper. That’s how Hochman describes the KFC’s TV ads before today’s campaign of colonel-clad celebrities. The commercial featured an Orlando-based KFC cook hand-breading and frying the chicken on-site. “Nobody even noticed it,” Hochman says. “We have to meet the customer where they are. They want to be entertained or they want something that’s going to get their attention, because if you don’t get their attention, it doesn’t matter what you’re saying.”
Accordingly, the company transitioned to an education-plus-humor strategy and tapped “SNL” alum Darrell Hammond as the first in what has since proved to be a long string of Colonel impersonators. Although some consumers were initially perplexed by the whole campaign, KFC’s brand engagement is stronger than it’s been in years. The company’s own internal testing suggested that only 43 percent of fast-food ads were correctly linked to the corresponding brand. Thanks to the new Colonel ads, KFC’s numbers were close to double that (74 percent), Hochman says.
He expects the series of ads will be a “slow burn” over time, meaning the rotation of Colonels isn’t going to slow any time soon. In one of the more recent commercials, actor Rob Lowe puts a tongue-in-cheek spin on JFK’s famous space-race speech, asserting that KFC would put a sandwich into space. The company made good on its promise; in June, it launched a chicken sandwich into the Earth’s stratosphere with a high-altitude balloon from private space-aiming company World View Enterprises.
If launching a sandwich into space seems a bit excessive, remember this is the same brand that built a logo large enough to be picked up by satellites in 2006. Like Sanders himself, KFC subscribes to a go-big-or-go-home philosophy. It’s a major asset, one that the brand has learned to yoke other company initiatives to.
Hackbardt is full of praise for the commercials and says he could see the series continuing for years. “What they’ve created here is an episodic marketing campaign worth tuning into, worth finding, and ultimately—the big part—worth sharing,” he says. “How often do you get a marketing campaign where people are actually seeking it out and listening and wanting to know when the next one’s coming out? It’s a beautiful thing.”
The overall dilution of media means it’s especially difficult for advertisers to reach their audiences, Hackbardt adds. Like many companies, KFC has made a big push into the world of social media to woo uninterested young consumers who make up a steadily growing slice of the consumer pie.
Globally, the brand boasts more than 46 million followers on Facebook, while the U.S. Twitter feed is nearly 1.2 million. In the past two years, the TV ads have garnered more than 160 million views on Facebook and YouTube.
“Our intent is to make the brand younger over time while still making sure we’re driving our core customer base,” Hochman says. “Obviously, young people don’t watch and consume as much TV as older customers do. We still have to reach them … and so, in order to do that, we had to diversify our marketing investments across several media, and not just TV.”
Already the move is showing promise. Hochman says that three years ago, before the turnaround began, three out of five millennials had never tried KFC. According to data from YouGov, the brand has since posted a 45 percent increase in millennial consideration.
Southern, spice, and everything nice
KFC’s zany new marketing strategy may pander to a certain consumer group, but it is not a simple case of lip service. The company also got down to the, uh, meat of its business.
Like all facets of the brand revamp, the menu tweaks play at the retro and the über-trendy in tandem. On the traditional side, Hochman says, it was important to focus on something that would excite franchisees and customers alike: the Original Recipe with its proprietary blend of 11 herbs and spices. Amid an industry in flux, the Original Recipe chicken remains the No. 1 item to bring guests into KFC, followed by its box meals, Hochman adds. At the same time, the menu required more than its star attraction to stay relevant.
“Younger people and their eating habits don’t necessarily lend themselves to eating chicken on the bone. Many meals are consumed in a car or on the go, which [makes it]harder to eat,” he says. “Our Original Recipe will always be our bestseller … but we are going to need to diversify beyond that.”
To the brand’s credit, it has made several attempts to do just that—it just hasn’t been able to stick many landings. In 2009, the Fiery Grilled Chicken piqued interest; a year later, the Double Down—a sandwich with fried chicken fillets standing in for bread—turned heads (and some stomachs). In response to industry-ubiquitous chicken tenders, KFC fried up Original Recipe Bites. It’s even tried to challenge Chick-fil-A’s no-bones-about-it dominance with the Original Recipe Boneless Chicken. None succeeded, and none have a spot on the menu today.
Despite a near decade of misses, KFC might have finally hit the mark. In early 2016, it became the first major fast-food brand to incorporate the regional favorite Nashville Hot into its menu. KFC even sent a food truck out on a two-week journey around the country to build buzz around the limited-time offer.
The road trip also presented an opportunity for KFC to improve its foodie reputation. “The customer knows a higher quality of food comes out of food trucks. They’re typically hand-prepared by chefs that are just starting out or can’t afford to have a restaurant,” Hochman says. “The reason we did the food truck for Nashville Hot was to communicate that.”
To further tick up the quality quotient, KFC invested 100,000 hours retraining cooks to bring their techniques back to “Colonel standards.” In April, it also set a deadline to stop using chicken treated with antibiotics for human medicine by the end of 2018. The pledge is a couple of years behind competitors, but as KFC points out, it is the first major chain to make such a commitment for bone-in chicken.
KFC hit gold again this year with another LTO. While steeped in regional flavors like its predecessor, the Georgia Gold Honey Mustard BBQ Chicken eschewed a strict template. “We did the Georgia Gold with the regional flavors of the Carolina mustards and the Georgia mustards, and created our own little homage to that,” says corporate chef Bob Das, who has been with KFC for about 17 years.
Indeed, the new menu strategy is all about paying homage to Southern flavors and approaching them as Sanders would have himself. The brand’s not disregarding increasingly adventurous consumer preferences, though.
“We’re trying to meet the demands of the customer. Obviously there are flavor seekers, and spice is a big thing. As you saw with Nashville Hot, we had people really craving that heat and that distinct flavor you can’t find anywhere else,” Das says. “Instead of trying these outlandish flavors typical to the Southwest or things that are even Pacific Rim or Latin flavors, we’re going to be right where we’re supposed to be [with]Southern-inspired.”
To that end, the brand recently imported an international favorite, the Zinger Spicy Chicken Sandwich. First launched in Trinidad and Tobago in the mid-1980s, the Zinger has since expanded to 120 countries. Now KFC is testing its appeal stateside and farther afield (the Zinger is the sandwich the brand sent to the stratosphere).
Again honoring Sanders and his palate, the Zinger adds hot spices to the proprietary 11-herbs-and-spices mix. For all its global fanfare and out-of-this-world aspirations, the Zinger is not a guaranteed slam-dunk.
“[KFC has] always struggled with sandwiches for some reason,” BrandTrip Partners’ Hackbardt says. Whereas fast-casual players like Slim Chickens and Starbird extol the merits of their chicken sandwiches—cooked-to-order, buttermilk-marinated, purposely sourced, etc.—the Zinger isn’t sufficiently promoted, he adds. In the commercial featuring Rob Lowe, “hand-breaded” is only mentioned a single time. “If you take a look at the Zinger and the Double Crunch, there’s not a big story about that other than being hand-breaded.”
Nevertheless, Hackbardt says it’s something that can be easily remedied; after all, the 77-year-old brand has great stories to tell.
But for all the heritage, creativity, and adaptation to consumer trends, KFC holds one distinct advantage over the competitors: its buckets.
“Bone-in chicken is something that’s great for a large party purchase. … They have that advantage, because there aren’t a lot of chains that are offering that,” Hackbardt says. “That drives the average check exceptionally high, because now we’re talking $20–$30 or even higher purchases. There are very few [quick serves]or fast casuals that are getting those kinds of purchases.”
Putting on a show
Marietta’s Big Chicken may be an outlier, but it is representative of big changes throughout the system. Last year, KFC announced its “Re-Colonelization” plans, which encompass not only a recommitment to quality, but also a pledge to upgrade its stores.
On the consumer-facing side, the brand combined the ostentatious with the inviting. Dubbed the American Showman style, the new design ratchets up the brightness of the exterior with bright red-and-white stripes, which were specifically designed to resemble a chicken bucket. The overall appearance is sleeker than older stores, and it manages to mix the old with the new: The iconic Colonel sketch remains, while block letters declaring KFC’s “World Famous Chicken” have been added.
“If nothing happens to the exterior of your building, no one knows you did anything on the inside,” Hackbardt says. He recalls a focus group BrandTrip conducted for one of its limited-service clients; not a single participant could describe the interior of the restaurant, because they so rarely went inside. “To spend more money on the interior of your location doesn’t tend to pay off, because so much of your business goes through the drive thru.”
Nevertheless, Hackbardt says a comfortable environment is always more inviting, especially if the company wants to encourage more dine-in business.
The interior of the American Showman design also sports the signature color combo, but in a more understated manner. The Original Celebrity Chef wall sets old photographs of Sanders against a red background, pendant lights are interspersed around the store, and wood finishes on the tile floor and furniture imbue a warmth not uncommon in the fast-casual scene, but far rarer in fast food.
The new stores even added a chalkboard to show the name of the cook working that day, as well as the farm from which the chicken was sourced.
“There’s that flash of the Colonel boldness, carnival red-and-white atmosphere that draws your attention and creates that appeal to come in or go to the drive thru. But then we balanced that out with his pragmatic sensibilities, and certainly a real desire to have quality control on his products,” Cahoe says.
Unlike the other turnaround efforts, the redesign falls squarely on the shoulders of franchisees. Company-owned stores account for just 4.8 percent of the domestic system, meaning it’s up to the operators to revamp their stores and make the American Showman style the default look of KFC stores. So far about 500 locations (a little over 10 percent) have made the upgrade. Cahoe says the plan is to have the new design in 70 percent of stores around 2020 since franchisee obligations come up for renewal within different time frames.
“The partnership and the change with the franchise system arguably happened on the front end of all this. I don’t know that we would have the traction in the turnaround … if we didn’t have that relationship and partnership in place upfront,” Cahoe says. “You’ll hear a consistent theme that the relationship has never been stronger—and you need the strength of that relationship to have the type of success that we’re having in the space.”
Thankfully, franchisees like KBP Foods are jumping in head first. The company plans to upgrade dozens of units and employ the new design with all future growth.
As for the Big Chicken location, it required a higher price than building a completely new store. But considering what a beloved fixture it is in the community—and the larger KFC system—the price seems well worth it. From the adjoining gift shop to the statue of Colonel Sanders to its very own AM radio station featuring “deep thoughts from the previously silent bird,” the Big Chicken has the pop-culture prowess and deep connection to consumers that KFC is still chasing. But if the legacy brand can maintain this newfound momentum, the famed Marietta location will be just one of many feathers in its cap.
“We’re still on this journey. We know that we have a long way to go to get to where we all want to be, our north star,” Hochman says. “Despite having very good success the last few years, Kentucky Fried Chicken’s best days are still ahead of us.”
This article first appeared in www.qsrmagazine.com
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