Sunday, June 23, 2024

KFC, Pizza Hut, Taco Bell May Put Something Big on the Menu

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KFC and Taco Bell lead the way when it comes to fast-food innovation and stunts designed to get you talking about their brands. The fried chicken chain has focused on the latter offering public relations-friendly promotions like its Mother’s Day chicken bouquet, a company logo so large it was visible from space, a fried chicken corsage, chicken-flavored lip gloss, and of course, a parade of celebrities playing iconic founder Col. Sanders.

The chicken giant has also offered up some food stunts as well. It did pioneer the idea of using fried chicken as bread for its famed Double Down sandwich. That’s an idea that sister chain Taco Bell later borrowed for its Naked Chicken Chalupa.

Taco Bell has offered up plenty of stunts as well and it has focused on menu innovation designed to both delight consumers and demand attention. That has led to all sorts of odd in-your-face-beverages as well as the not-so-authentic Nacho Fries, a near-endless variety of Doritos-based tacos, and a short-lived effort to sell chicken wings.

Pizza Hut, on the other hand, has been relatively quiet. It did try a menu revamp that added toppings including sriracha a few years ago, but mostly it has marketed around value, leaving the innovation to its sister chains.

Now, however, at Yum! Brands (YUM) – Get Yum! Brands, Inc. Report first-quarter earnings call, a company executive answered a very interesting question about the three brands potentially working together.

Image source: Pizza Hut

Pizza Hut, Taco Bell, and KFC are all owned by Yum!, but they also each have their own leadership teams. That’s why you may see locations that offer more than one, or even all three of the chains under the same roof, but you never see promotions or menu collaborations involving a crossover between the brands.

Imagine what Pizza Hut’s take on Taco Bell’s beloved Mexican Pizza might look like or how popular a KFC popcorn chicken pizza topping might be. You could have fried chicken tacos featuring Col. Sanders famed recipe or bring a Taco Bell flare to the KFC menu.

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The options are limitless, but so far, the three companies have avoided working together at least when it comes to their menus. Now, however, Deutsche Bank analyst Brian Mullan raised a new possibility of collaboration during the earnings call.

Live Mas It Great Lickin’ Good?”Just kind of a big picture question, but do you see any potential one day for a cross-brand loyalty program at Yum!?” the analyst asked. “Is that something that you think could potentially work in the quick-service restaurant industry in the U.S.?”

KFC, Taco Bell, and Pizza Hut all have separate loyalty programs currently.

Yum CFO Brian Turner fielded the question and talked about how loyalty programs have driven business.

Loyalty is becoming an increasingly important part of our business, increasingly important part of our digital experience that we provide to customers. More than half of our restaurants around the globe are part of a loyalty program.

Taco Bell in the U.S. is a great example of how we’re driving excitement through loyalty. That’s what we did with the Taco Lover’s Pass. And that helps to drive app downloads and people signing up into the program, and we continue to see significant growth in membership in that program.

Pizza Hut obviously in the U.S. has a large and very impactful loyalty program. And KFC has great loyalty programs in a number of markets around the globe. So we’re going to continue to focus on that, implementing it in markets where it makes sense.

The CFO did not dismiss the idea of a joint loyalty program happening someday.

“Obviously, we have thought about it in terms of cross-brand loyalty. Right now, we’re focused on maximizing the value of our brand-focused loyalty programs. But obviously, as our data and analytics capabilities continue to evolve, all sorts of possibilities are out there in the future,” he said. “But for the time being, we’ll remain focused on brand-specific loyalty programs.”

That’s not a no. It’s more of a not right now and it’s an acknowledgment that Yum has at least considered the idea.

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