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KFC to roll out grilled chicken, value menu

KFC to roll out grilled chicken, value menu

NEW YORK KFC will introduce its long-tested grilled chicken and a national value menu next year to help shore up sales at the struggling chain, parent company Yum! Brands Inc. said Wednesday at an investment conference.

The grilled chicken platform is scheduled for rollout in the second quarter of 2009, the company said, after the longest product test in company history. Yum first announced it was testing its Kentucky Grilled Chicken in March after developing the menu item over the past four years.

“This product will be a major transformational product for us ... It’s a whole new KFC,” said David Novak, Yum’s chairman and chief executive.

Also new at KFC next year will be the chain’s first national value menu. Featuring nine items for between 99 cents and $1.99 each, the value menu was tested in three markets. Yum did not reveal a time frame for the national introduction of the menu, which includes 99-cent KFC Snackers, a toasted wrap for $1.49, and snack boxes of popcorn chicken or three hot wings for $1.99.

Various chains in the quick-service segment, including McDonald’s, Burger King and Wendy’s, have found success with value menus that feature items typically priced around the $1 mark.

KFC has been the one drag on Yum’s U.S. sales and profit. Domestic same-store-sales growth of 4 percent during the September-ended quarter was led by positive results at sister chains Taco Bell and Pizza Hut, but offset by a 4-percent decline at KFC. The chicken chain also posted an operating loss, while Taco Bell and Pizza Hut hit profit targets, Yum said.

KFC, first conceptualized as a bone-in fried chicken chain named Kentucky Fried Chicken, has tried in the past to move outside its fried chicken roots. The Colonel’s Rotisserie Gold line was pulled by the chain in 1996, three years after $100 million was spent on introductory promotions. The Rotisserie Gold products were then replaced by Tender Roast items that survive today only in a sandwich, a Twister wrap or as a salad topping.

This latest attempt at non-fried chicken will be sustainable, Novak said, as both marketing tactics and operational techniques have been completely vetted. In addition, the parent company has spent $30 million to help KFC franchisees pay for the new ovens needed for the product. While KFC is marketing the new product as grilled, the chicken is actually roasted in an automated, high-temperature convection oven, which uses a patented non-stick “grill plate” to stripe the chicken with grill markings.

Novak said customers ordering KFC's well-known buckets can request a mix of both fried and grilled chicken.

“We have been slow in addressing two consumer trends,” Novak said. “That people want to avoid fried foods and that they are looking for better value É that has been fixed.”

Menu changes at other brands under the Yum umbrella include a lasagna offering under Pizza Hut’s Tuscani Pastas line, additional flavors under Taco Bell’s Frutista Freeze line, including cream-based dessert drinks, and a Fiesta Meal take-home taco kit aimed at increasing dinner traffic at Taco Bell.

Yum operates or franchises more than 35,000 restaurants worldwide, including about 17,825 in the United States.

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