The late Colonel Sanders, whose bearded, down-home visage adorns chicken restaurants from Kentucky to Karachi, is headed for a new frontier — the mountains of Tibet.
There’s more: The Mexican-style fast food of the Taco Bell chain will expand across China in the near future, Pizza Hut will step up its home deliveries and KFC’s already imposing presence in the world’s most populous country will keep seeking new ways to localise.
The chiefs of Yum! Restaurants’ China operation made the comments on Thursday, offering an optimistic blueprint of the company’s expansion plans to reporters during a meeting of regional managers marking the opening of KFC’s 1 000th outlet in China.
Gearing KFC toward local stomachs while retaining its identity as a prestige foreign brand is a delicate balance, and the China operation has done that with such fare as an ”Old Beijing Twister” modeled after the way Peking Duck is served — but with fried chicken inside.
”In our business, it’s very simple. You have to respond to consumers’ demands. As they become more sophisticated, we need to become more sophisticated,” said J Samuel Su, greater China president for the Louisville, Kentucky-based Yum! Restaurants.
”We think we’re in a very good spot,” Su said. ”Our intention is to continue with rapid expansion. We see no reason why we should slow down.”
The global sales of Yum! Brands, formerly Tricon Global Restaurants, totaled more than $24-billion in 2002, the most recent figure available.
As China increasingly embraces the outside world and its food, KFC and Pizza Hut have both become wildly popular for urban Chinese seeking alternatives to traditional food.
KFC opened its first China restaurant in Beijing in 1987, and the capital now has more than 100 sites. Nationwide, Yum! opened 230 new KFC outlets last year — part of a steady increase in its market penetration.
McDonald’s the world’s largest fast-food company, operates more than 560 restaurants in China.
Currently, KFC operates in every Chinese province and region except Tibet. That won’t last long, company officials say, though the difficulty in guaranteeing supplies to any proposed outlet due to limited road, rail and air links remains an obstacle.
”We do have plans to enter Tibet. I can’t tell you when,” said Su, who added that he believes the proper permission has been secured from the Chinese government. ”Supply lines are a major challenge.”
China represents one-third of international profits for Yum!, which also owns Long John Silver’s seafood restaurants and the root-beer-and-burgers chain A & W. Executives have targeted a 15% growth rate for the company’s international operation, and they say China regularly surpasses that.
Peter Bassi, chairman of Yum! Restaurants International, said KFC’s popularity in China is due to its identity as a ”quick-service” location — a grab-and-go, sandwich-oriented operation that fits the needs of Chinese consumers. By contrast, he said, KFC in the United States is more geared toward family meals
and take-home chicken in buckets.
Although KFC is by far the biggest Yum! operation, the company is also planning a slower expansion of its Pizza Hut brand. Plans are also under way for more sites of the Chinese version of Taco Bell, known as Taco Bell Grande, which currently has one location — in Shanghai.
KFC also plans to increase the number of drive-through outlets, currently limited to one in Beijing — a move that reflects the sharp growth in private car ownership among urban Chinese.
While chicken has long been a major part of the Chinese diet, making it an easier sell to Chinese, pizza appeals to the desire for something different, Su said. But he and Bassi said they expected the market for pizza to grow with the affluence of the
Chinese people.
”They all have their DVDs, air conditioning in every room. They want to stay at home,” Bassi said. ”They want a pizza delivered.” – Sapa-AP