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Kentucky Fried to Add Grilled Chicken Items to Menu

November 23, 1989|From Reuters

LOUISVILLE, Ky. — Kentucky Fried Chicken is trying to put the sizzle back into its fast-food business by adding charcoal-grilled chicken to a menu now led by its much copied fried chicken.

The restaurant chain is trying to lift profits out of a recent downward trend by adding non-fried chicken products and expanding lunchtime business in the United States, its president, John Cranor III, said.

A subsidiary of Pepsico Inc., Louisville-based Kentucky Fried Chicken Corp. will introduce a range of new products, including "chargrilled chicken" and "a variety of sandwiches and other snackable forms of chicken," Cranor said.

The world's largest fried chicken chain has lost market share in recent years to a proliferation of competitors, including hamburger chains that offer chicken. But it hopes to bounce back with grilled chicken.

"Chicken consumption is greater than beef, and yet consumers are increasingly concerned about fried foods. We have an opportunity to add to our consumer appeal by adding some non-fried chicken items," Cranor said.

Within three to five years, he said, grilled chicken could boost the typical Kentucky Fried Chicken outlet's annual sales by 25% to 50% from current levels.

Grilled chicken is showing a "very strong initial performance" in test-marketing in Las Vegas and Canberra, Australia, Cranor said, indicating that it should generate substantial new business when it is introduced more widely by mid-1990.

Wall Street analysts regard Kentucky Fried Chicken as a weak link in Pepsico's $13-billion empire. The chicken chain's profits have been down this year, while Pepsico's Pizza Hut, Taco Bell, snack foods and soft drinks have all enjoyed impressive growth.

Kentucky Fried Chicken was formed in 1955 to sell chicken cooked from a recipe developed by 65-year-old Harland Sanders when he ran an eastern Kentucky mountain gas station.

The colorful "Kentucky Colonel" with the white goatee sold his 600-store North American franchising business for $2 million in 1964 to an investor group that included John Y. Brown, a high-powered salesman who eventually became Kentucky's governor.

After amazing growth that pushed its stock to stratospheric levels on the New York Stock Exchange in the late 1960s, the chain became overextended in just a few years. The company was saved from possible disaster in 1971 when it was bought by spirits conglomerate Heublein Inc.

Pepsico bought the company in 1986 as the centerpiece of its restaurant diversification.

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