KFC, Pizza Hut and Taco Bell Want Even More Millennial Customers in 2015

KFC, Pizza Hut and Taco Bell Want Even More Millennial Customers in 2015
Image credit: Scott Ableman | Flickr

The quintessential moment of Yum Brands' Investor Conference was when Taco Bell's CEO said that the Mexican fast-food chain was "on fleek."

"We were on fleek with breakfast, with our social engagement, with mobile ordering," Brian Niccol said on Thursday.

Niccol went on to explain to the confused investors that, in the language of Twitter, "on fleek" means "on point." But why did the CEO pull out millennial-speak at a major investor meeting?

One reason: Taco Bell's success with social media and other millennial marketing tactics is serving as a blueprint for all Yum Brands chains in 2015.

Related: McDonald's Slashes Menu in Bid to Turn Around Sales

"[Yum Brands is] transitioning KFC and Pizza Hut to be clearer in brand truths, like Taco Bell," said Greg Creed, Yum Brands' CEO.

By “brand truths,” Creed meant Taco Bell's ability to combine marketing and new menu offerings in a way that resonates with mostly millennial customers. As Taco Bell beat out its sister brands in both same-store sales and social media buzz in 2014, the copycatting doesn't seem like a bad idea.

Digital business and marketing are set to play a huge part in this plan. Taco Bell recently rolled out a new mobile app, which encourages customization through add-ons. Pizza Hut has almost doubled its digital orders in the U.S. since 2013, when only 25 percent of sales were made through online channels. As for marketing, Creed says the company is doubling down on digital to ensure Yum is "the most connected brand."

In addition to an increased online presence, you can also expect to see new millennial-friendly menu items across the board. Creed says that the company has realized that if customers see a restaurant as innovative, they are more likely believe in the quality of ingredients and products, presumably even if nothing else changes.

Related: This Unlikely Fast-Food Chain Just Became the First to Roll Out an 'All-Natural' Burger

However, the more millennial-friendly menu doesn't just mean more Waffle Tacos -- although Taco Bell did tease a breakfast biscuit taco and a Fritos taco. With millennials demanding more organic and unprocessed foods with minimal packaging, the company says it plans to increase transparency about ingredients and cut preservatives.

The increased transparency around ingredients ties into Yum's international plans as the company slowly recovers from an expired meat scandal in China. On Tuesday, due to low sales in China, Yum slashed its yearly earnings per share estimate to mid-single-digit range, down from prior expectations of 6 to 10 percent growth. 

Despite the ongoing investigation in China, executives say they still believe the country to be Yum's number one opportunity for growth. Different executives repeatedly stressed that Yum had a great first half of the year in China and pointed to China's growing consumer class as future potential customers. 

Another plan to boost profits at Yum is increasing margins by bringing on more franchises, through a mixture of refranchising and new restaurants. Currently 90 percent of Yum Brands restaurants are franchised outside of China and India. By 2017, that percentage will jump to around 95 percent.  

Related: While Searching for a Rental, Apartment Hunters Discover In-Home Burger King

Edition: October 2016

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