Restaurant Franchise Opportunities

Professional Feb, 28 2017

KFC to focus on partner, equity led business in India

In an exclusive interview to Restaurant India, Rahul Shinde, Managing Director- KFC India talks about their innovations and growth plans for 2017.

By Nusra
Sub Editor

As we saw that after continuous same store sales drop, KFC regained its sales. What strategy did you apply to get back?

Most of 2015, we focused our energies to reorganize our business, associate with like-minded and right partners and decode our core consumer. 2016 has been a transformational year for KFC and we witnessed a positive sales momentum that we have demonstrated with two consecutive System Sales growth of 13% (for the quarter ending September 2016) and 16% (for the quarter ending Dec 2016). In the wake of external factors like demonetization that affected the industry in the past few months, this is a reiteration of the confidence that consumers have shown in our brand.

KFC is known for its CSR initiative globally. What new is happening in that aspect?

As a brand KFC believes in giving back to the communities in which we live and work, and making a positive difference to the lives of those in need. In 2016, we introduced add HOPE, a long term anti-hunger initiative that aims to feed 20 million children by 2020.

We are a food company and it’s our privilege and responsibility to address the issue of world hunger where millions of children go days without a proper meal. With ‘Add Hope” we are hoping to tackle a big, complex problem head on by raising awareness about hunger and the difference a meal can make to a child’s development. Every time that a consumer will “Add Hope’ with a Rs 5 they are making a real difference in the life of a hungry child, giving him an opportunity to not just survive, but also grow. 100% of the proceeds will go to our partners who will help us in our mission towards eradicating hunger.We have partnered with credible organisations like the UN’s World Food Program (WFP) and Smile Foundation, India FoodBanking Network (IFBN) and ResponseNet (Delhi FoodBanking Network) for the campaign. Through these partnerships we aim to create awareness and raise funds to provide meals to underprivileged children.

It is believed that it is because of the customers’ eating out behavior that there is dip in sales of many QSR chain. What is some new initiative and retail strategy for marketing the brand in India?

According to a recent report, India’s QSR segment is expected to grow by 26% each year to reach INR 117 billion by end of 2017. We have just posted two consecutive quarters of double digit sales growth and we remain optimistic about leveraging the huge opportunity that India has to offer. For the size of opportunity we have in India, we want to have two growth engines — one equity-led and the other, partner-led. Consolidation with two deep-pocketed partners, with backing from well-capitalised private equity funds who can invest in the brand, assets and talent, has brought back confidence in the category and brand.

The other big change has been that we-’ve brought chicken back to the forefront — that’s what we have been famous for across the world. Innovation, formats and flavours, conversation… all that is now centred on chicken. Focusing on our core offering, we have experimented with different flavours and formats of chicken and all our big-ticket launches last year have been driven by chicken – Chizza, Friendship Bucket, Smoky Grilled and the 5in1Box.

What is the whole idea of launching ‘Hangout Stores’? How is different from your normal stores?

These new format stores are intimate and informal, making them the perfect hangout zone for every mood and occasion. KFC Hangouts have a rustic feel, with an interesting mix of wooden and metal furniture, brick walls and earthy lamps, and offer an environment that subconsciously makes consumers let go of any inhibitions thus allowing them to kick back, relax and enjoy a finger lickin’ good meal. While the overall design philosophy remains consistent across we do have the liberty to add local elements to build relevance in our markets – making each restaurant unique. The décor of these KFC restaurants seamlessly integrates elements from popular city landmarks. For example, the ‘KFC Hangout’ that you can see at RT Nagar in Bangalore, for instance, captures the city’s iconic TV Tower as a design element.

How much are you focusing on localisation?

When we entered the market about two decades back, we were introducing a completely unfamiliar concept and a whole different taste to the Indian consumer. So there was some amount of familiarization that had to be built in with Indianised adaptations. Today, however, consumers are well travelled and cued into global food trends. They are increasingly demanding authentic and real food experiences, and we are catering to those who want to try our International flavors. We will continue to build on innovations that are original, craveable and authentic.

Going forward, what is your expansion plan in taking the brands to new market?

We’re taking a long-term view on how we establish the brand in the country in a meaningful way. We are not looking at expanding for the sake of expansion and therefore we are not pegging growth in terms of how many restaurants we want physically.

What is in store at KFC in 2017 for its customers?

We will continue to build specific innovations in 2017 and engage KFC lovers with new formats and flavours of chicken offerings – focusing on our core – at affordable prices. All I can say right now is that consumers are in for some finger lickin’ innovations from us in 2017 as well. 

Related: Uncovering the finest scotch

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