Will KFC finally solve its identity crisis?
With parent company Yum slowing down in China, the fried chicken chain may have to stop trying to be everything to everyone.
This is obviously at least partially due to the chain's need to adapt to a consumer base that is (or at least claims to be) increasingly unwilling to stuff fats, starches, and carbohydrates into a bucket and submerge its collective face therein. Dry-rubbed grilled chicken is a star player on KFC's window posters. Green beans, no longer a shameful secret on the menu like an ugly cousin of the much more popular mashed potatoes or macaroni and cheese, cascade instead through KFC's advertisements like a brilliant green waterfall or clippings of the Jolly Green Giant's hair.
On the other hand, items like the Famous Bowl (once described by comedian Patton Oswalt as "a failure pile in a sadness bowl") and the obscene Double Down sandwich continue to be massively popular, so much so that KFC has recently added everyone's favorite food-improver to the Famous Bowl to create the Cheesy Bacon Bowl, advertisements for which seem almost provocative, as if KFC is daring its critics to object to its decadence.
This duality has created something of an identity crisis for KFC, and indeed for Yum in general, since many of the corporation's restaurants straddle the line of nutritional respectability. Can a fast food restaurant really be both unhealthy and healthy? Restaurants like Chipotle (CMG) have carved out a considerable place in the market for natural ingredients and fresh preparation. Can these restaurants capitalize on KFC's inability or unwillingness to eliminate fat bombs like the Double Down from its menu?
One answer may simply be that KFC makes enough money in China that it can afford to maintain the unhealthy image it has cultivated in the U.S. KFC absolutely dominates the Chinese fast food market and has plans to expand further. However, its product lines in China are vastly different from its U.S. offerings (the Chinese products include traditional Chinese soups, panko-crusted chicken, etc.), which means that while the chain is hugely popular in China, it can't parlay that success back to the U.S.
Another problem for the chicken chain to deal with is its target market. At the moment, it seems as if KFC can't decide whether to market primarily to families or to individuals. McDonald's (MCD) and Yum's own Taco Bell have made big strides by abandoning the family image almost entirely. Taco Bell ads feature trendy young people Instagramming their fluorescent tacos (see here on YouTube), while McDonald's likes showing hipsters falling in love while biting into Angus Third Punders (see here on YouTube).
KFC, on the other hand, vacillates between showing individuals happily scarfing chicken sandwiches or the aforementioned bowls and showing families using KFC's buckets-of-food system to feed a dozen people easily. The most recent campaign plays on the trope of irritating relatives being loud during the holiday season, which plays to the "family" side of things, but the Famous Bowls continue to be the chain's best-selling item. Until KFC can figure out who's buying chicken, it will continue to play second fiddle to Taco Bell in Yum's U.S. operations. Even more troubling is that Yum recently announced that its fourth-quarter sales in China were down, according to SeekingAlpha. If KFC isn't pulling its weight, it may be time for the company to figure out a clear target market and tighten up its campaigns accordingly.
More from Minyanville
Maybe they should bring Colonel Sanders back and focus on the friend chicken again
Here's the deal... when I want a really tasty grease "hit", it is hard to beat KFC. I only visit the Colonel for junk food, NOT healthy stuff. About twice a year I'm like a KFC junkie. Must have KFC, MUST!
Forget the green beans. Mashed potatoes and gravy, cole slaw and a biscuit. However, even I can resist the fake butter packets (if there is anyone out there that eat those my hat is off to you).
Agreed on the identity crisis being caused by over priced product. I live in a small town in Arizona and the KFC was so outrageoulsy expensive that the joint finally went under. too bad, i did like the original chicken but definitely it was too pricey.
One thing I notice is that all the elderly people eat in the KFC Restaurants, it must be the fountain of youth, after all the founder of KFC lived to his 90's. Maybe you need to stop listening to food police idiot Drs. and the government experts and start asking the older 80 to 90 years old what they have been eating. I know a lot will say bacon, bread and all the things they are telling us not to. My mother is 87 and some of the 65 year old health freaks look a lot worst then she does, but of course being my mom I think she looks great and for over 45 years she has eaten KFC almost every Sunday and during the week. KFC has the three essentials; Protein, Carbohydrates and Fats look it up it is the building block of our body. And concerning the high prices they are actually better priced then the crap you get at Chickfalalaa. I could go on but it would be a waste of more of my time especially since most of the health nuts voted for Obama. I love KFC it taste great and is healthy for you. What is unhealthy for you is eating too much of anything, period.
IT'S NOT KFC DAMMIITT IT IS "COL. SANDER'S KENTUCKY FRIED CHICKEN" !!
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
After enjoying a smooth rise in stock prices since May, investors are about to be hit with another bout of volatility.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.