Strategy & Competition
Calorie Postings: Yum! Wants Them Everywhere
Rather than wait to be forced into caloric transparency, Yum! Brands (YUM) is embracing it. The Louisville company, owner of KFC, Taco Bell, Pizza Hut, Long John Silvers, and A&W, has pledged to post calorie counts at its 3,163 corporate-owned locations nationwide by 2011 and is encouraging its 16,561 franchised and licensed U.S. outlets to do the same. Yum is also helping to lead a lobbying effort in Washington to extend any federal law to stand-alone restaurants. "Consumers should be able to make informed purchase decisions about the food they eat," says Yum CEO David C. Novak.
Mandatory calorie labels remain controversial. The National Restaurant Assn. says calculating calories may be too costly for small restaurant owners. Wendy's (WEN) spokesman Denny Lynch says: "It doesn't help the consumers; it simply puts a number up on the board." Burger King (BKC) and McDonald's (MCD) refused to comment on the menu labeling bill. Subway spokesman Les Winograd says the sandwich chain supports a federal law that would override a confusing patchwork of local laws. And Yum has no plans to post calorie counts at its roughly 17,000 outlets outside the U.S.; spokesman Jonathan Blum says Yum wants to "gauge consumer reaction" first.
Health advocates say fast-food chains would rather respond to growing obesity rates by offering healthier food than advertising calorie counts. Yum is doing both. The $11.3 billion-a-year company has been rolling out healthier offerings at many outlets, including the April launch of Kentucky Grilled Chicken (180 calories for a breast vs. 490 for the extra-crispy version). "One of KFC's primary barriers to growth was health," says Blum, who goes so far as to call grilled chicken "the single most impactful product launch in the company's history."
The federal proposals, which are part of the health reform bills in Congress, are intended to persuade consumers to make better choices. "There is a shock value," says Bob Goldin, executive vice-president of consultancy Technomic. In a survey the firm conducted in New York City, which passed labeling laws a year ago, 80% of consumers who saw calorie counts said the amounts were higher than they expected. And 60% said the postings influenced, one way or the other, where they ate.