Yum! Brands and the changing tastes of Canada
The US-based fast food powerhouse that is Yum! Brands is taking the industry by storm as it aggressively expands across the globe.
A Fortune 500 company, Yum! owns KFC, Pizza Hut, and Taco Bell, currently operating 43,500 restaurants in 135 nations. The business opens an astonishing six new restaurants per day worldwide; the growth Yum! enjoys is extraordinary, with 50% of its profits earned from outside the US as of 2016, ensuring that the three food brands and their umbrella company are establishing a firm global footprint in every location.
One nation Yum! has its sights set firmly on is Canada, where the fast food industry is booming and millennials are demanding more and more choice. Yum! strives towards a culture of not only swift expansion but a fun and energetic environment for workers and customers alike, knowing that its reputation as a vast and dynamic business is a large element of what allows it to grow at its current rate.
We spoke exclusively to members of the Canadian KFC, Pizza Hut, and Taco Bell teams to find out how and why these brands are penetrating Canada so successfully.
KFC fits into Yum! Brands’ global vision by focusing extensively on growth and expansion. Nazia Millwala, Director of Development for KFC Canada, has been with the business for 11 years in various roles, many of them in the Middle East and North Africa. She joined the Canadian arm of the business three years ago, and is in charge of franchising, restaurant design, and spearheads the ambitious expansion plans KFC has.
“My team has been focused on three core areas,” Millwala explains. “One is franchising. We’ve put a lot of high value on having great franchisees, and it’s critical for us to have some very committed and energized partners to join us on this journey. So as we move to revitalize our brand, we have injected new franchise partners who share our vision.
“The second area is our revitalization and bold restaurant growth agenda. Like any business in Canada, we’ve spent a lot of time analyzing and understanding our current estate to the point where we have great success stories and know where more work is needed. We have a very ambitious goal to grow to 800 stores, and we truly believe we can do it because there’s enough demand for our brand – so how do we find the right opportunities to make sure that happens?
“The third area is design. As we upgrade, relocate, and bring in new stores, it’s critical we have design that does a good job of representing our brand. Our recently launched design package includes signature elements like the red and white candy stripe, as well as wooden accents to represent our hand-crafted values – these show what the brand stands for.”
These key focus areas were the result of looking hard at the 650 restaurants KFC already has in Canada. Using that data, competitor and industry information and leveraging sophisticated tools, the business devised the best strategies and began the process of implementing the findings.
“We thought, ‘how do we inject freshness back into the brand and bring it alive?’,” explains Millwala. “Nothing was lacking, but we needed to take things to the next level; upgrade stores, improve locations, and ultimately deliver a better experience to the guests. We truly believe we can achieve 800 restaurants in Canada, but the question is how quickly can we do this?”
Guest experience is vital to KFC, as it is the customer that dictates the brand’s direction. The brand is using its connection to consumers to decide where it opens new restaurants, how the seating is arranged to be optimally social, and expanding sales channels such as delivery that enable Canadians to enjoy KFC in their own homes.
“Our customers are asking, and we’re making sure we find opportunities to deliver the best experience in any way we can,” says Millwala. “The responses we’re getting have been very encouraging, and of course that is reflected in our growing sales numbers. Our employees and franchisees are energized and responding positively as well, which gives us confidence that we’re on the right track.”
KFC’s expansion goals align perfectly with those of Yum! Brands, with its ambitious plans to grow and expand the footprint, “and that’s very exciting for our brand in and out of Canada,” says Millwala. “Canadians have the appetite for our finger-licking good chicken, so it’s about how we grow aggressively and expand in the right places. If we could grow to 800 stores tomorrow, we would find a way to do it.”
Pizza Hut truly owns the world’s fast food pizza market, but has experienced particular buzz in Canada in recent years, having reached over 400 locations already. Tatiana Carrascal, General Manager of Pizza Hut Canada, has two decades of marketing experience behind her and is on the front line of the incredible demand the brand is currently enjoying.
Carrascal attributes part of the accelerated growth to Pizza Hut’s delco model – the delivery/carry-out restaurant footprint – which proves very cost-effective because as well as having a smaller restaurant footprint, franchisees are offered a lower bill and a higher return on investment.
“It makes us very attractive partners,” she explains. “The delco model allows us to build in convenient locations and in more places around the country, so that we can serve our customers better. We have high growth expectations and growth incentives for this model, and we expect to build between 100 and 200 in the next three to five years.”
Pizza Hut seeks out strategic mergers and acquisitions in order to expand too, which is a swift way of acquiring real estate that already exists and morphing it into a new restaurant, but it is the products themselves which are driving innovation in order to fuel Pizza Hut’s increasing footprint.
“All the products we offer are based on consumer research,” says Carrascal, highlighting the brand’s reliance on the customer to grow in the right direction. “Our philosophy is that we listen to them first. Special items like WingStreet wings and Stuffed Crust pizza drive significant sales for us, and we pride ourselves on defining the pizza industry especially through our unique pan pizza. We like to be the original creators of different food offerings. We’re known for and have a legacy of product innovation.”
In order to acquire this information, Pizza Hut works hard to communicate with its consumers via feedback acquired through customer surveys, and it analysis that data every single week: “There are incentives for them to fill out the surveys, and they know we are actually utilizing their feedback. Then we use those extensive answers to fill our pipeline of innovation and strategy.”
Pizza Hut keeps its appeal relevant and exciting in Canada by maintaining the legacy it has already worked to achieve alongside adjusting it to meet the evolving industry needs and consumer market. Pizza is ever-evolving and becoming more digitally-driven, so Pizza Hut is focused on value-driven initiatives to cements its appeal.
“Canadians are looking for affordable and convenient eating options, and we know that offering good value for money is driving growth in this market,” says Carrascal. “We pay close attention to our online platform, as more and more consumers are accessing it, and this provides new growth opportunities for us.”
Canada is particularly special to Pizza Hut with good reason: “They love our unique food offerings,” Carrascal explains, “and we’re very appreciative of the response we continue to get from our customers. In Canada we do see tremendous opportunity to accelerate the growth we’ve already seen, we’re just making it bigger and faster through mergers and acquisitions alongside organic franchisee growth.”
In these ways, Pizza Hut’s vision aligns perfectly with Yum!’s desire to expand aggressively in Canada, and Carrascal is thrilled to be a part of the tight-knit umbrella brand: “We’re very excited to be part of this family of brands with leveraged opportunities,” she states. “It definitely provides us a bigger spectrum to grow. The role that we as Pizza Hut play in the broader spectrum is primarily driving growth and restaurant openings in new markets, and we have a larger opportunity alongside KFC and Taco Bell.”
Taco Bell, which has the smallest footprint of Yum!’s brands, is growing at a rapid level and holds a firm belief in a big dream: to make Taco Bell a 700-strong restaurant brand in Canada. Veronica Castillo, Director of Marketing and R&D for Taco Bell Canada, has been with the company for four years. Her role is focused on strategy within Canada, working on food innovation, communication strategies, development, and design to bring Taco Bell’s best concepts to life. She explains how Taco Bell is able to hold such high hopes for its own expansion.
“The Taco Bell brand is on fire today. It’s been growing for the past six years both in sales and transactions. In 2017, we have achieved record sales with double digit growth. It’s amazing, and part of that success is attributed to our innovation that highly resonates with our target.”
Castillo continues: “The innovation we bring to Canada is unique. For example, we have the Double Layer taco, the Naked Chicken Chalupa, and most recently the Cheetos Crunchwrap Sliders – unique innovation that help set us apart from our competitors. We select the best innovation for Canada based on in-depth consumer insights, so we make sure that when we launch new products, we create campaigns that truly resonate with our fans.”
Exploration is in Taco Bell’s DNA; it isn’t afraid to take risks with its innovation and campaigns. To insert itself into the cultural conversations that consumers value, it uses some extraordinary methods, such as offering an Airbnb ‘SteakCation’ in Ontario last year to celebrate the launch of the Steak Doubledilla – a campaign which generated 422 million impressions.
“We’ve found fans truly understand the brand which help us validate new concepts, ideas, strategies, and products,” says Castillo. “We launched Mas Nation, an advisory board comprised of Taco Bell Fans, and it acts as a great forum to gauge anything we bring to life, with fans truly championing and supporting our brand. We’re also reaching a lot to social channels, and we really engage in conversations with fans to understand what they want.”
Consumers are rewarded not only with the innovative meal options they request, but a focus on the social aspect of food. “We want to bring people together,” Castillo says. “We want to create assets that are really inviting, to drive conversations and make people happy to stay longer in our restaurants. We’re truly evolving.”
It is this wealth of offerings that has given Taco Bell Canada the confidence to aspire to such massive expansion across the country. With a solid foundation, Taco Bell already boasts nearly 200 locations. By 2022, the goal is that Canada will house 100 new stores.
“We have pretty much reset the business focusing on building strong foundation over the past five years,” explains Castillo. “It’s a growing business with a strong financial model, strong menu, improved operations, and amazing restaurant concepts, and a driving force now is expanding the Taco Bell standalones across Canada. We just recently opened our first standalone in 2017 in Saskatoon, so we feel we have the foundation to continue growing. We have a brand that our fans love, and a lifestyle brand that no-one else can offer.”
Taco Bell is now in 29 countries, recently launching in China, India, and Brazil. These nations are now priorities alongside Canada, and Canada is considered to currently be at a critical stage of rapid expansion.
“In the last six years, we’ve grown the brand 40%, so that tells you the potential we have,” says Castillo. “Everything that we’ve done resonates so well with our target, and we track that against Yum!’s goals. Mexican food is trending in Canada, because millennials love it, and this is adding to our ability to strongly drive growth. We have what it takes, and we are at this point engaging investors to really help us with our growth strategy.”
A world with more Yum!
Yum!’s slogan – a world with more Yum! – is more appropriate than ever as the business spreads across the globe. It enhances its attractiveness to millennials by focusing on corporate responsibility alongside allowing its consumers to be a part of the business by listening to them and adjusting accordingly. All three of Yum!’s brands fit naturally into its vision and work hard not only to maintain it but develop it, and Canada is set to benefit from the care and passion KFC, Pizza Hut, and Taco Bell have for pleasing their audience.