The Colonel is on the rise. KFC’s irresistible brand of fried chicken is growing in popularity across the world. So what’s the dirty bird’s secret?
The Colonel is on the rise. KFC’s irresistible brand of fried chicken is growing in popularity across the world. So what’s the dirty bird’s secret?

Secret to KFC’s incredible rise

Don't look now, but Colonel Sanders is on a rampage. While nobody was paying attention, the fast food company formerly known as Kentucky Fried Chicken took over the world.

KFC is owned by a company called Yum! Brands, which also owns Pizza Hut. Not so long ago Pizza Hut was the crown jewels of the company and the brand flogging bucketfuls of dead bird was a sideline. Now KFC is lighting up the sky and Pizza Hut is getting blitzed.

While Pizza Hut is still big in the USA, the rest of the world just wants fried chicken. Wants it bad. Check out these growth rates in the most recent year. KFC is growing at a crazy rate all over the world.

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The business begun by Colonel Sanders during the Great Depression is now many decades old and finding it has plenty of room to get bigger. It's basically insane for a company as old as this to be growing this fast

(Colonel Sanders, by the way, was not an army colonel. The title is just something the state of Kentucky gives out to people it likes, similar to the UK making people knights and dames. George Clooney is a Kentucky colonel. Billy Ray Cyrus is one. Pope Benedict is one too.)

The crazy growth of fried chicken has made Yum! Brands into a terrific investment over the past 20 years. If you put in $1000 in 1999, you'd have $13,000 now.

 

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THE AUSTRALIAN CONNECTION

Fried chicken is not a traditional Aussie food. So it may be surprising that KFC has managed to make such big inroads here. We are responsible for a disproportionately large share of KFC's global revenues, and the growth of KFC in Australia is much faster than economic growth - our whole economy gets more fried-chicken centric each year.

And our chicken fetish doesn't have much to do with Red Rooster. As the next graph indicates, enthusiasm for our homegrown chicken chain is merely chugging along.

 

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The chief executive officer of Yum! Brands, the man who drove KFC to these crazy levels of growth is himself an Australian, is Greg Creed, who went to MacGregor State High School on the south side of Brisbane. He can be pretty proud of himself.

The number of KFCs in the world has grown by 71 per cent in the past six years. That is insanely fast. McDonald's has grown the number of restaurants in its chain by 8 per cent in the same time. China is deeply into fried chicken, far more than they are into burgers or pizza, and it is responsible for a huge part of this growth.

Right now, KFC has 24,000 restaurants worldwide and McDonald's has 38,000. If they both keep growing at the same speed, KFC will have more outlets in the world than McDonalds by 2025.

SO WHY IS KFC WINNING?

KFC's amazing success in China, where it dominates McDonald's by far, is partly to do with localising their menu. They serve a lot of items, such as breakfast congee, you'd never find in a KFC anywhere else. McDonald's hasn't adapted as much. But the dominance over McDonald's is also because China doesn't have a huge bread culture. The burger, with its prominent bun, was never as tight a fit with China's existing food preferences as the simple pleasure of fried chicken.

But of course that doesn't explain KFC's success in the rest of the world. Perhaps that Asian distaste for bread coincides with a Western backlash against bready carbs and that propels KFC to the top in both places at once? It's possible - so long as you discount the fact there are carbs in the batter on a piece of fried chicken! Not to mention the many burgers they sell.

The other explanation is that KFC has a strong brand. As consumers, we are more susceptible to branding than we might think, and KFC has been working hard on its brand, including reverting back to the Kentucky Fried Chicken name to describe their food in some markets.

IS THIS … BAD?

Obviously, fried food is going to kill you. We'd all be better off if the most popular global fast food restaurant sold something lower in fat. Apples, maybe? But let's be realistic. Chicken is actually a not terrible meat for the future. People are mucking around trying to invent vegan beef and I hope they succeed, but for ethical eating chicken is not the worst substitute.

Yes, there's less meat on a chicken than a cow, so if you're worried about deaths per meal chickens are very bad. But chickens have puny brains. If you care about the intelligence of the animal you are eating, they're a more ethical option. (So long as you leave the bacon off your zinger burger!)

Chickens are also low in carbon emissions. They have short lives before they are slaughtered, which means less time breathing and pooing before they get coated in those famous secret herbs and spices.

Fowl are space efficient - unlike beef you don't need to clear out the Amazon rainforest to farm birds. According to a 2019 study by agricultural economist Diego Rose, swapping one serve of beef a day for chicken cuts your carbon emissions from food in half. Which is not to say eating fried chicken turns you into Greta Thunberg. But you could be doing worse.

WHAT'S NEXT?

KFC is probably going to keep growing in Australia, and keep making cricket broadcasts more and more annoying with its ubiquitous marketing tie-ins. But Yum! Brands is not done with us. It owns Taco Bell too. And while KFC is now a global phenomenon, Taco Bell is very much stuck in America. They want to change that.

Taco Bell is coming to Australia, starting slow but ramping up fast. If it doesn't succeed, that will hint the secret to KFC's success was the Colonel's secret herbs and spices. But if it does, it will start to look like the marketing genius of Greg Creed has had a lot more to do with it.

Jason Murphy is an economist. He is the author of the new book Incentivology | @jasemurphy