With a history dating back 90 years, rated as the second-largest food chain across the globe, boasting a founder with perhaps the most recognized face in the world, and a secret recipe of 11 herbs and spices, it’s a business that doesn’t suffer from a lack of recognition.
You’d be forgiven for thinking that the chief executive of Kentucky Fried Chicken (KFC) could consider it mission accomplished. No way, says Tony Lowings, Global CEO of KFC.
In fact, he has plans that will keep it on a growth trajectory for the foreseeable future, using what the company has always used as its guiding light since the days of Colonel Sanders.
"Ask anyone in KFC around the world what makes KFC great, and they’ll tell you two things: great food and great people," he says. Tony leads a US$26 billion business that includes more than 24,000 restaurants in more than 145 countries.
Yet there is enormous potential for more growth, he explains, notwithstanding a global pandemic that created a temporary hurdle for the company’s growth goals, but not its enthusiasm or ambition to regain its momentum.
"It’s a big growth company. If you look at the number of restaurants we’re building, the untapped opportunity we’ve got, the potential we have around the world, it’s quite awesome – and I saw this particularly when I was in Asia," Tony shares.
"We’ve got about 50% of our restaurants in Asia and yet the opportunity to build more restaurants there is just enormous." The company’s success in 2019 can be measured by a record of nearly 1,500 new restaurants built around the world, with an ambition to build a new KFC every five hours. Then the pandemic struck.
It made us lean a lot more heavily into the culture which we hold dear – people being at the forefront of everything we do in our brand.
"We were doing all that until the coronavirus came along and knocked a little bit of the wind out of our sails," Tony admits. "But we were able to take our business model and sharpen it up very neatly so that it gave better returns for our franchisees."
Tony is confident that KFC won’t be deterred by the setback of a pandemic in its ambitions for growth. He strongly believes that the fundamentals of its business approach will stay constant through its formula for being a ‘RED’ brand – relevant, easy and distinctive – and that’s even truer today than it has been in the past.
"That’s what consumers want. What we found is those three things really came to the fore again during the pandemic," he says. "There are things that are going to change because of the pandemic, but also a lot of things that won’t change. We feel very confident about the future.
As the world reopens, we’re confident that we’ll be able to get our growth formula working again. In fact, in Australia our sales were actually higher during the pandemic than they were before it, even when the restaurants were open.
"As for every business, the pandemic was challenging. But we also learned a lot about our business, our culture and how we operate, in a way that was very positive. It made us lean a lot more heavily into the culture which we hold dear – people being at the forefront of everything we do in our brand. We saw our franchisees and company restaurants really go out of their way to support all of our nearly one million employees around the world."
A fraction less friction
Since the deprivations of COVID-19, KFC has a renewed focus on trust and confidence around hygiene. Within the RED framework, the company is skewing its efforts towards digital service and delivery, ensuring that while safety is uppermost in everyone’s minds, convenience and ease of communication are uncompromised.
During the pandemic, delivery of food to customers took on a new dimension, especially when restaurants were closed. Customers could find access to their local restaurants by cell phone or computer, so from KFC’s point of view, that whole experience for consumers has to be "as frictionless as possible".
"The area we really want to get even better at is the customer experience," he confirms. "We think that technology’s going to help us on that front, so we’re working on really driving that consumer experience, leveraging technology so that this omnichannel experience – drive-through, curbside, order ahead and pick up, kiosks, remote location ordering, whatever it might be – all of those touchpoints have to come together in the best possible way so our staff and restaurants are more agile to give the right experience for consumers."
Tony is convinced there is a permanent shift in people’s attitudes to ecommerce generally, but also in eating out and the convenience of home delivery for food. "It has exploded and it’s not only in restaurants. I think people appreciate that convenience and access through different channels, so sitting in a dining environment will be a little lower. I think it’ll go through a bit of a dip. But we’re ready to embrace that and serve people through other avenues."
The element of trust has never been more important, says Tony, and it correlates with brand loyalty. He concedes that loyalty towards brands from younger generations is not as high as it once was, but those brands doing the right thing by customers will be the ones that ultimately succeed.
It relates to trust through things like food safety during the pandemic. "Trust is also about how you treat your people, and proof of whether you’re a good brand is what you do with your people," Tony explains. "If you’re treating your people right, then you’re more likely to treat me right as a customer, so therefore I trust you a bit more."
Supply and demand
With its primary products being fresh food, KFC is heavily reliant on local suppliers for its thousands of restaurants around the world. That has required decades of relationship building by thousands of people, and is a cornerstone of its global success.
It’s a little-discussed facet of the company of which Tony is particularly proud. "At a local level, I think we’ve got a reputation for being incredibly fair and honest in dealing with suppliers. We treat our suppliers as partners," Tony says.
"We’ve got very tight relationships with the people who provide our proprietary cooking equipment – we’ve had relationships with those people for 50 or 60 years. And we have very close relationships with the small number of people who provide our secret herbs and spices around the world. Again, those have been in place for decades, and I think it’s testament to their strength."
Some years ago, KFC worked on an initiative with its suppliers to build maximum value in its supply chain, an example of the strong partnership they have with the brand. The team worked with all of its suppliers to find a way to drive costs out of the system.
The resulting program and workshops with suppliers around the world can now be counted in the dozens and have extracted significant cost benefits accruing to both KFC and its suppliers.
Building on commitment
Built on a franchise model, KFC counts on the cooperation of its many franchisees to meet strict parameters in their business operations. It’s a system that has worked remarkably well, as witnessed by its global growth.
"We want capable franchisees and we want people with capital. We also want people with good culture and people with commitment," Tony says. "In other words, are they going to have the enthusiasm and desire to grow? When you’ve got over 24,000 restaurants around the world, if you are going to try to track, monitor and assess every restaurant every day, you’re just never going to do it.
"The only way you can do it is to create an environment where people actually want to do the right thing, they feel proud about it, they’re enthusiastic about the company and want to deliver for that. That’s where we put our energy."
Living in a community
KFC has committed to a massive effort to increase sustainability practices in its operations – in waste minimization and disposal, recycling, alternative packaging arrangements, energy reduction and consumption.
In 2019, it committed to make all consumer facing plastic packaging recoverable or reusable by 2025 and, in 2020, KFC announced new chicken welfare guidelines that focus on chicken health and farming practices across all areas of the supply chain, including raising, handling, transporting, and processing.
But reaching inside to its employees is where Tony sees the company making a genuine difference right around the world. He suggests that KFC provides more than a job or even a career – there’s a larger element that permeates everything it does.
Parent company Yum! announced last year that it is committing US$100 million to initiatives to help unlock people’s potential and KFC will be part of that, finding ways to support the communities in which it operates.
"If you ask the majority of our employees around the world, ‘What does KFC do well?’, they’ll say, ‘They look after us, they care about us, they help us achieve our potential.’ That’s given us a great starting point and we want to extend it beyond our employees into the community. We’ve done this in many different ways over time," he points out.
"There are two things that really excite me about KFC. One is it’s just a fantastic company to work for. We’re constantly delighted by the great people and the great culture we have. The second is that we create life skills. We create leadership training.
We create opportunities for people to set themselves up for whatever career path they choose. Whether they stay with us for three months, three years or 30 years, we want the time they have with KFC to be positive. We want them to come out of the experience as significantly better human beings."
On a growth path
Tony has had what he calls a nonlinear career. With a degree in civil engineering and an MBA, he worked for companies including Deloitte, BOC and Lend Lease before joining Yum! in 1994 as Planning Director for the Finance Division in Australia and then moving into operations for the South Pacific.
KFC – A Brief History
1930 – Harland Sanders buys a roadside motel and serves Southern-style chicken
1939 – Sanders perfects a unique blend of 11 herbs and spices
1950 – Sanders wears a white suit for the first time
1952 – The first KFC franchise opens near Salt Lake City, Utah
1956 – Sanders sells his restaurant and signs up new KFC franchisees
1957 – Kentucky Fried Chicken first sold in buckets
1964 – Sanders sells the KFC Company to investors
1976 – Colonel Sanders is named the second most recognizable celebrity in the world
1980 – Colonel Sanders passes away
1986 – PepsiCo acquires KFC
1991 – KFC name officially adopted
1997 – PepsiCo spins off its restaurant division into Tricon Global Restaurants
2002 – Tricon renamed Yum! Brands
2020 – KFC has more than 24,000 restaurants in over 145 countries around the world
He also worked internationally as General Manager of the South American, Central American and Caribbean business unit, where he was responsible for KFC, Pizza Hut and Taco Bell.
In 2010, Tony was appointed COO for the Yum! Restaurants International division in Dallas, before moving back to Australia to run the Australia and New Zealand KFC business as Managing Director until 2016. He became Global CEO in early 2019.
"I did engineering, I jumped into finance and I moved into the fast food industry, so it’s not a perfectly methodical approach. My philosophy is if opportunity presents itself, jump into it," he says.
"It’s fun, it’s exciting. If you got something that you could learn and find something that’s interesting and different, and add value to it, why not give it a go?
"At a personal level, I know that we’re creating jobs for people, creating leadership opportunities for people and we’re providing wealth for individuals around the world, particularly in developing countries, and we’re giving people an opportunity to become better human beings. I feel very excited and passionate about that.
"I really am a servant leader and I do things for the benefit of others. I think that creates an environment where I listen to people a lot more and I am prepared to modify my own behavior and style to help other people – to me, that is probably a strength I have, and I think that’s a good role model for others.
"Life is about learning. Everything that you do is about improvement and you never end. You never get there. I have taken more inspiration from walking into restaurants and seeing how people who are dealing with quite challenging personal circumstances are doing it with a smile on their face, and doing it with an incredibly positive attitude.
That makes it very difficult to complain when you’ve got all the perks and privileges that I have." Tony reveals that his father left school when he was 12 years old to become a postman, and only got his first pair of shoes when he was 16. But he taught his son a lesson never forgotten.
"He taught me the power of education and encouraged me to study and to absorb as much as I could," Tony recalls. "The one thing that people can’t take away from you is what you put between your ears."
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