The man who brought Dorito-shelled tacos to America is rising to the top job at Yum! Brands Inc.
Greg Creed, who has led the Taco Bell chain since early 2011, will replace David Novak as Yum’s chief executive officer on Jan. 1, 2015, the company said today in a statement. Creed, 56, also will join the board, and Novak, 61, will become executive chairman.
The move will give Yum, which also owns the KFC and Pizza Hut chains, a leader known for clever marketing and innovative new items at a time when fast-food chains are battling over Americans’ dining dollars. Creed oversaw the introduction of the Doritos Locos tacos, the premium-priced Cantina Bell menu and most recently a slate of breakfast fare that includes waffle tacos. Under his leadership, the Mexican-food chain went from a laggard into Yum’s fastest-growing U.S. brand.
“While it can never be good news that a CEO like Mr. Novak is stepping away from managing the day-to-day business, we feel confident that he leaves the company in good hands,” David Palmer, an analyst at RBC Capital Markets in New York, wrote in a note. “We expect Taco Bell’s upcoming year to be one that reinforces Greg Creed’s track record as a leader with a proven ability to deliver results.”
Palmer recommends buying the shares.
Yum fell 1 percent to $76.25 at the close in New York. The Louisville, Kentucky-based company’s shares have gained 0.8 percent this year, compared with a 1.4 percent decline for the Standard & Poor’s 500 Restaurants Index.
“He’s an incredibly creative problem solver,” Patti Hart, CEO of International Game Technology, where Creed has been on the board since 2010, said in an interview. “Bring your work to Greg and he asks those few critical questions that bring your work to the next level.”
His guidance helped the casino-gaming company remain customer-focused when it revamped its brand last year, Hart said.
Creed will take over at a pivotal time for Yum’s operations in China, where it gets about half of its revenue. The company has been trying to rebuild trust with customers there after one of its suppliers was investigated for selling food with too much antibiotics.
Those efforts, which have included an ad campaign focusing on food quality and a revamped KFC menu, have started to bear fruit. The company said last month that first-quarter sales at restaurants open at least 12 months jumped 9 percent in the Asian nation, the first gain after five straight quarterly drops.
Creed, who has been with Yum for about 20 years, also helped manage through the company’s 2006 E. coli outbreak that was linked to Taco Bell restaurants in the U.S. Northeast. During the outbreak, which sent 53 people to the hospital, Taco Bell closed stores to make sure they were free of the potentially deadly bacteria.
Previously, Creed served as chief marketing officer for Taco Bell and led the $200 million “Think Outside the Bun” ad campaign that debuted in 2001. He also was Yum’s chief operating officer before taking the helm at Taco Bell.
Taco Bell’s same-store sales fell 1 percent in the most recent quarter, which ended before the nationwide introduction of the new breakfast menu, which also features egg burritos and the bacon A.M. Crunchwrap. For all of last year, the chain’s U.S. same-store sales rose 3 percent, compared with declines at KFC and Pizza Hut.
There are more than 40,000 Yum Brands stores globally, of which the company owns about 20 percent.