Fat Times for Fast Food
By Pallavi Gogoi
If you think that all the talk about obesity is scaring people away from fatty food, think again. Americans are eating hamburgers, doughnuts, French fries, and fried chicken like never before.
Yes, fried chicken: KFC has been going gangbusters this year. In October, sales at stores open for a year or more soared 6%, vs. a 3% drop in the year-ago period. This comes after a total 6% increase in the previous three months combined. In fact, fried chicken has become so popular that KFC is considering bringing back the name "Kentucky Fried Chicken" in its full form.
"Kentucky Fried Chicken is the one big trend that's going on in the world today," says David Novak, chief executive of Louisville-based Yum! Brands (YUM ), KFC's parent. "We're the chicken capital of the USA."
What's going on? Apparently, all the talk about obesity causing clogged hearts, hypertension, high blood pressure, and even diabetes is falling on deaf ears (see BW Online, 1/11/05, "Ready for a Fast-Food Workout?").
"What can I say? Americans love fried chicken," says Harry Balzer, renowned food expert and vice-president of researcher The NPD Group. He says fried chicken is the fastest-growing fast-food menu item in the last decade. In every food survey conducted over the last 25 years, Balzer points out, three common themes emerge in terms of what Americans want: taste, price, and convenience.
If that mantra really works, KFC certainly found its sweet spot in March, when it introduced the Snacker, a 99-cent chicken sandwich that proved to be a runaway bestseller. The 5,525 KFC restaurant outlets in the U.S. sold 100 million Snackers in the past seven months, making it one of the most successful product launches in KFC history.
A GROWING POPULATION.
But while Americans are digging in to the fried chicken, they're certainly not eschewing other fatty foods. Hamburger outlets served over 500 million more customers in 2004 than in the previous year, according to NPD. And doughnut shops served about 150 million more people last year than in 2003 (see BW Online, 6/3/05, "Salad Days for Burger Joints").
Plus, research has shown that Americans currently eat out, or order in, more than ever before -- fueling the trend toward weight gain. Food-market researcher Technomic found in a 2005 survey that 69% of consumers described their diets when eating out as "fair to poor," compared to 39% who said they eat "fair to poor" diets at home (see BW Online, 4/22/04, "Restaurants are Cooking Again").
Not suprisingly, a new study that followed Americans for three decades suggests that, over the long haul, 9 out of 10 men and 7 out of 10 women will become overweight. Published in the Oct. 4 issue of the Annals of Internal Medicine, the report shows obesity may be an even greater problem than indicated by other studies demonstrating that two-thirds of the U.S. population is already overweight or obese. "The health implications for the country are enormous," says Ramachandran Vasan, an associate professor of medicine at Boston University and the new study's lead author.
MORE THAN A MOUTHFUL.
The fact that a majority of the U.S. population is overweight could be one explanation why Americans are so blasé about the subject. "Fat is mainstream, which is why everyone has become complacent," muses Marion Nestle, professor of nutrition, food studies, and public health at New York University and author of Food Politics. "What used to considered pudgy before isn't even worthy of a comment today."
Junk-food chains are now catering to people who have ignored the healthy-food movement of the last few years, and in fact have gotten sick of the focus on healthy living. "There are those, especially the younger people, who shun the health and nutrition talk and throw caution to the winds," says Bob Sandelman, president of market researcher Sandelman & Associates. "When they go out, they go way over the other end, and want the thickest burger they can find."
No wonder the fast-food giants are fighting over who can come up with the most fattening food. Last year, Hardee's and Carl's Jr., units of CKE Restaurants (CKR ), created quite a stir with the Monster Thickburger, which has two 1/3-pound slabs of Angus beef, four strips of bacon, three slices of cheese, and mayonnaise on a buttered sesame-seed bun -- totaling 1,420 calories and 107 grams of fat. Hardee's proudly proclaimed the sandwich "a monument to decadence."
And, earlier this year, Burger King introduced the Enormous Omelet Sandwich, comprising one sausage patty, two eggs, two slices of American cheese, and three strips of bacon, which translates to 730 calories and 47 grams of fat.
HAVE YOUR CAKE.
Americans needn't worry that they're getting fat alone. The fast-food giants are aggressively moving into Asia. KFC, for instance, expects to open more than 375 new restaurants in China in 2005 and 400 in 2006, and targets sales growth of at least 22%. Sales in China are sizzling: They're up 11% year-to-date, after soaring 24% in 2004.
Back in the U.S., Yum's Novak points out that, besides the 99-cent Snacker, KFC's $9.99 bucket of chicken was also a fast seller. Just in case that's not enticement enough, KFC recently started offering free cakes to families to increase store traffic.
Clearly, the philosophy today is "obesity be damned." Let the feasting begin.
Gogoi is a reporter for BusinessWeek Online in New York
Edited by Phil Mintz