KFC bets on grilled chicken

08 May 2009

LOUISVILLE: Restaurant giant Yum Brands is having another crack at introducing grilled chicken to KFC (Kentucky Fried Chicken, as was). This time the company has hooked up with US megastar Oprah Whinfrey via a coupon-based free sample promotion. This was so successful that many restaurants sold out, which wasn't in the plan.

Yum Brands also owns Pizza Hut, Taco Bell and Long John Silver's.

KFC has tried to distance itself from fried foods a number of times of over the years, changing the brand name from Kentucky Fried Chicken and experimenting with products like Rotisserie Gold, which was not a success.

But with health concerns finally making an impression in the US mass market and KFC same-store sales falling 7% in the last quarter, some observers are seeing Kentucky Grilled Chicken as a potential lifesaver for the chain.

“The jury's out until the consumer votes,” says Ron Paul, president of Chicago consultants Technomic. “It's not a slam dunk. It's not going to happen automatically. You've got to get trial.”

KFC is seeking new customers outside of its fried chicken-munching traditional supporters club. The trick will be to get enough of these to make the operational headache worthwhile, Paul thinks.

UBS analyst David Palmer is more bullish however, saying he expects grilled chicken to be a leading component of the company's earnings per share growth by the second half of this year.

Data sourced from AdAge; additional content by WARC staff