Yum China overhauls supply chain, marketing

Focusing on progress

(Continued from page 1)

For 2013, KFC China has adjusted its review process to rate supplier performance with a greater emphasis on food safety. The brand already had tested its poultry supplies voluntarily for years, but the protocol will be altered further to be more scientific and variable, Su said.

He added that Yum China would encourage new capital investments from local poultry suppliers and a growing presence in China from international powerhouse suppliers by favoring purchasing from those companies.

The company’s marketing campaign would encompass everything from TV commercials and tray liners to social media and special websites, including one in which the public could check and evaluate Yum China’s progress against the campaign’s food safety goals, he noted.

“We want to reassure our customers that our food is high-quality and perfectly safe to eat,” Su said. “Nothing is more important to us than food safety.”

Yum Brands chief executive David Novak said during the fourth-quarter earnings conference call that the company would stay the course in China and build another 900 restaurants in the country in 2013.

He added that, while Yum would need “the gift of time” to weather the current controversy, the company has bounced back from previous panics in China. In 2005, he noted, sales fell as much as 40 percent due to public fears over avian flu and a few menu items’ inclusion of a red dye that turned out to be carcinogenic. Yum reformed its sourcing, did damage control through public relations and built new restaurants through that crisis, and sales rebounded 28 percent the next year.

In addition to more than 4,250 KFC units and more than 825 Pizza Hut Casual Dining restaurants, Yum China also operates several hundred combined locations of Pizza Hut Home Service, East Dawning and Little Sheep.

Yum Brands operates or franchises more than 39,000 restaurants in more than 120 countries and territories.

Contact Mark Brandau at mark.brandau@penton.com
Follow him on Twitter: @Mark_from_NRN