Yum Brands Presentation

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How YUM Foods is reaching for a bigger slice of the Fast Food Pie

What YUM Brands have to say about IndiaYUM Brands-A Brief ProfileOrigin-Louisville, KentuckyNo of Restaurants-40,000Presence-Over 125 countriesAwards -Ranked #216 (FORTUNE 500) -was named the 100 Best Corporate Citizens by Corporate Responsibility MagazineYum Brands Restaurants(a)KFC(b)Pizza Hut(c)Taco Bell

The Power of YUM4,800,000,000 Transactions1,900,000,000 dollars in franchise fees1,500,000 associates1,952 new international restaurants

KFC Issue before 20 years which affected YUM BrandsWhen KFC Made its entry in India there were protests over Globalisation,small farmers rights,environment & foreign investors were already at fever pitch when the entry of a brand owned by PepsiCo The outlet was picketed & ransacked repeatedly & charges of unacceptable levels of monosodium glutamate made consumers hesitate even as they turned up their noses at the bland recipes & lack of add-ons in the menu After 20 YearsToday YUM Brands is currently the world largest fast-food company as well as fastest growing restaurant in India

YUM Brands outlets over the Years

Market Share of Foreign Brands

YUM Brands StrategiesSeparation of Indian entityThe parent company YUM Brands had carved out the Indian division as a separate entity in 2011(China is the only other standalone international market-a telling indicator of how important success in the Indian market is for the Parent company. In 2011 India had around 466 YUM restaurants compared with 4493 in China) The company now has direct reporting relationship with the CEO of the company & direct sponsorship from the company on investment & resources required to bring the opportunity(From 2007-2009,YUM Brands has opened around 276 restaurants in India even as the China division added 1,750 to its portfolio)

KFC & Pizza Hut which launched in 1996 didnt exactly set the Indian market on fire. In 2005,there were just 5 KFC outlets in India against 240 outlets of McDonaldsEven Pizza Hut lost its fist place to rival Dominos because it failed to adopt home delivery strategy in time

KFC V/s Pizza Hut V/s McDonalds V/s DominosYUM Brands Franchise Devyani International office is covered with trophies & plaques from YUM over the past 18 years-Transformers Award Action Hero(This was presented by YUM Brands Global Head Mickey pant in 2012- Another award Kangaroo-The Great LeapThe Taco Bell ProfilePizza Hut Delivery(PHD) was hived off as a separate division in 2010 & there are currently 171(out of 373) outlets that focus exclusively on deliveryThe company also plans to do similar strategy to Taco Bell as wellKFC is YUM Brands lead opportunity but Taco Bell could have a bigger potential in the long term based on the huge population of vegetarian consumers.Taco Bell is localizing a lot of menu in order to build its brandOut of 2000 outlets planned by the company to launch worldwide by 2020,atleat 100 will be in IndiaTaco Bell India Stores(5 Stores)-Bengaluru(4 stores)-Mumbai(1 Store)Why Taco Bell has slow expansion in India -The company had to understand how the Taco Bell model works in India & has taken 3-4 years to fix the shortcomings-The company is learning store-by-store- The company is developing their vendor base with a lot of handholdingTaco Bell strategy for menu offeringsTaco Bell called a TEAM from US which diagnosed that the wheat quality was to blame when Taco Bells offerings were not turning out the way they had been planned in India .After much experimentation, the TEAM identified a variety from Madhya Pradesh that was suitable Three factors that make YUM Brands optimistic about its prospects in India(1)40% of the population is vegetarian while the rest also eat vegetarian food most of the time(Taco Bells 75-item menu has a variety of vegetarian items)(2)The Taco Bell Chain serves spicy food with familiar ingridi3nts such as beans,rice & flatbreads that will appeal to Indian palates(3)Taco Bell Indian menu starts at a loss making @Rs.25.This strategy has proved a success for the Taco Bell. The fast food chain doubled their sales from the time of the launch. The company states The higher you want to go, the lower should be the price Four Stages of Building Brands (According to YUM Brands)At the concept stage', one must not think of making money. That happens in stage fourYUM Brands do not want to expand in a big way in the concept stage of Taco Bell stores. The company is planning to open around 35-40 stores in five to six cities over the next 2-3 years. There are already enquiries from small centers such as Navsari & BharuchMultiple Brands Jubilant Food Works has 2 brands under its portfolio(1)Dominos license in India(726 stores)(2)Dunkin Donuts(29 stores)

YUM Brands in India has 3 brands under its portfolio(1)Pizza Hut(373 stores) (2)KFC(341 stores) (3)Taco bell(5 stores)

The acceptability of Burger & Chicken as well as Pizzas has been tested across the country. The combination can give YUM Brands a good advantageThe Pizza Hut is a higher ticket item than KFC & the consumer class is also different, so there is no cannibalization between the twoHaving multiple brands also ensures savings on the backend in terms of rentals & economies of scale because the same chgicken,cheese & flour is used in both formatsYUM Brands Menu OfferingsOver the past several years the menu at Pizza Hut & KFC has adapted to Indian tastes & preferences.YUM Brands wants Pizza Hut,KFC & Taco bell to be youthful & inspirational YUM Strategy in Menu Offerings(1)First strategy is to be seen as inclusive brands(2)To make sure that brand is relevant to India-The company needs to get inspired by local eating out habits but do it in unique way that YUM can own at prize points that are very penetrableEx 1:Over the past 12 months Pizza Hut conducted an infromal study called India-to-Bharath to understand what & how consumers are eating so that Pizza Hut can adapt that into their menuEx 2:Indians love carbohydrates more than protein,so more rice & wheat options in YUM Brands menu Ex 3:Indians want more sauces,so YUM Brands increased the gravy in the food

At KFC,the focus is on Vegetarian optionsKFCs-So Veg,So Good ad campaign emphasizes its Veg & Paneer offerings to reach a wider customer base.KFC has also intoduced dishes such as Veg Rice Bowl & Veg Zinger BurgerYUM Brands decision to stay affordable-YUM Brands see their competition as street food & not branded food & therefore the company wants to make their food affordable at street food prices. Why should a customer stand & eat in the heat when YUM Brands offer a world-class restaurant, air condtioned,hygenic,aspirational place with safe foodPrices starts at Rs.30 at KFC, Rs.50 at Pizza Hut & Rs.300 for the PAN PizzaCompetition

YUM India posted sales of $ 57 million in Q1 of 2014 compared with $58 million in the previous year. The operating losses stood at $3 million in Q1 FY15 compared with $4 million in FY14.So,YUM India is yet to send back profits from India to its parent companyDominos Pizza is in a more mature stage which made losses for a long time & YUM is still in the investment stageBy 2020,YUM India will start contributing to YUM Global

YUM Restaurants ChinaYum! Brands is focused on building leading brands in China in every significant categoryChina is the best restaurant opportunity of the 21st Century with a consuming class that is expected to double from 300 million to more than 600 million people by 2020

YUM Restaurants China-A Brief ProfileTotal Restaurants-6400 in 950 cities Expansion Plans-To open 700 restaurants in 2014KFC entry into China-1987 (KFC was the first quick-service restaurant chain to enter China) No of KFC Restaurants-4600(out of 6400)KFC Menu@China Market-Beef, seafood, rice dishes, fresh vegetables, soups, breakfast, desserts, and many other delicious products. Were also leveraging our restaurants throughout the day with breakfast, delivery and 24-hour operationsPizza Hut entry into China-Pizza Hut was the first restaurant chain to introduce pizza and Western-style casual dining to China in 1990No of Resturants-1200 in 305 citiesPizza Hut Menu@China-pizzas, entrees, pasta, rice dishes, appetizers, beverages and desserts.

YUM Brands China investmentPizza Hut Home Service- Yum! Brands introduced pizza delivery to China in 2001 and there are over 200 Pizza Hut Home Service units in 26 cities(2)East Dawning- Yum! China created and is testing East Dawning, a quick-service restaurant concept with nearly 30 stores serving Chinese food to Chinese consumers (3)Little Sheep- Yum Brands acquired Little Sheep in 2012, the leading hot-pot brand in Chinese casual dining with over 350 restaurants.

YUM Brands CSR activitiesYUM Contribution to World Hunger ReliefYum! brands had a longstanding commitment to hunger relief in the U.S. through a initiative called Harvest program, contributing on average $50 million worth of prepared meals to 3,000 hunger relief agencies across the country each year and now with nearly one billion people in the world facing hunger and malnutritionIn October 2007, YUM associates, franchisees and suppliers in more than 100 countries joined forces to bring awareness and action to this global crisis as they launched World Hunger Relief (WHR)an annual initiative leveraging the power of our global restaurant system to address hunger through awareness, volunteerism and fundraisingsThis global movement is now the world's largest private sector hunger relief effort in history benefiting the United Nations World Food Programme (WFP). WFP is the world's largest humanitarian agency fighting hunger worldwide, feeding on average more than 90 million people in over 70 countries each year

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