The Decline of KFC...What Happened?

foreign [Music] Kentucky Fried Chicken is an iconic American brand for decades now families across the country have been Gathering Together around the dinner table to share that bucket of original recipe paired with the mashed potatoes and gravy and the biscuits I know I'm not the only one who has some good memories like that I mean they used to be like the prime example of a successful fast food chain competitors would consider themselves lucky if they were somehow able to replicate some of that KFC magic and that sounds strange today because it's not the case anymore they're not as popular as they used to be seemingly not as well liked and financially they've been hitting some low points maybe the simplest way to demonstrate it would be by looking at their number of U.S locations which has been steadily declining for quite some time it's hard to even pinpoint the best time period for KFC obviously if you're talking about highest sales or most locations it would be around 2004 for market share it would be somewhere around the 1970s and if you're talking about quality or customer satisfaction there is a good argument that could be made that their best time was when the colonel was still in charge before 19th 64. there is a lot to look at here it's one of the biggest stories in fast food so for today I'm going to talk about the evolution of KFC by highlighting the different owners throughout the years while also identifying what I believe to be the five biggest reasons behind their decline the first owner of Kentucky Fried Chicken of course was Colonel Sanders who was quite the character that lived quite the eventful life he learned how to cook when he was six years old because his father died his mother had to work all the time to support the family and young Harland as he was known back then was forced to cook for his two younger siblings when he was 12 years old his new stepfather didn't get along with him so we dropped out of school and left home to work initially as a farmhand but that turned into a variety of different jobs over the next 20 plus years in 1929 he opened a gas station in Kentucky and converted a storage room into an eating area where he served customers chicken and vegetables and of course the biscuits the food proved to be popular so the following year right when he turned 40 years old he opened a 142-seat restaurant slash motel nearby and that is what I would consider to be the start of the business that became Kentucky Fried Chicken in the 1950s he became almost fully concerned with expanding the concept re-franchising opening the first franchise location all the way out in Utah in 1952 and within four years he went out on the road full time to try to convince people around the country to open their own KFC restaurants all of these potential franchisees were influenced by the recognizable red and white stripe theme at the restaurants the signature recipe that he had perfected including the 11 herbs and spices and of course the branding that included his own unique appearance at this point has probably become more iconic than the restaurants themselves that was all a very simplified summary of course but that's how he grew the change over 600 locations across the country before selling all of it in 1964. that year it was bought by a group of investors for two million dollars along with a promise of a forty thousand dollar a year salary to Colonel Sanders if he continued to be the image of the company you know travel around making public appearances and getting people excited about the brand these new owners were even more effective in opening new restaurants than the colonel was because within just six years of taking control by the end of that decade there were 3 400 KFCs in operation and that leads me to the first reason behind their decline competition just think about that number 3 400 locations in 1970. that is an insane figure I believe it made them the biggest fast food chain in the country I can tell you that they were twice the size of McDonald's they had a head start in pretty much every market across the country especially when you narrow it down to just the chicken restaurants like any other fast food chicken restaurant that you can name today was not even a factor most of them didn't even exist yet but as the years went on and things became more competitive KFC has had a hard time keeping up with them for example Boston Market they became a sensation in the 1990s by offering rotisserie chicken and so KFC followed their lead by selling the same thing in 2013 Chick-fil-A became the highest selling chicken restaurant in the United States titled at KFC had held for more than 50 years and Chick-fil-A was able to take that title by operating not even half as many locations in 1971 a KFC was bought by hubline for 285 million dollars they were a producer of popular alcoholic drinks including Smirnoff Vodka over that next decade they continued to find people to open even more restaurants reaching almost 6 000 of them by the 1980s now for these previous two owners clearly a big goal of theirs was to expand the brand by opening as many restaurants as they could and a way that they made that happen was by cutting a lot of Corners you know they found ways to make the food quicker and cheaper and easier and of course sacrificing quality in the process leading to my next reason behind their decline various issues with their menu and who else on this Earth can better identify a decline in the foods quality than the kernel himself throughout the 1970s he would commonly criticize the food at the restaurants claiming that there were many changes made to his original recipes referring to KFC he said that's the worst Fried Chicken I've ever seen on a separate occasion he said my God that gravy is horrible they buy tap water for 15 to 20 cents a thousand gallons and then mix it with flour and starch and end up with pure wallpaper paste he called the gravy wallpaper paste and in 1974 when they came out with their extra crispy chicken he called it a fried dough ball stuck on some Chicken KFC even unsuccessfully tried to sue him for these statements so clearly some sacrifices were made to the menu another big issue they had with their menu at the time were their attempts to Veer it away from Fried Chicken kind of losing their identity and neglecting their core product by emphasizing other things like spare ribs or roast beef in the late 1960s they even tried to start an entire spin-off chain of restaurants called Kentucky roast beef that grew to quite a few locations before shutting down altogether here let me finish up the list of owners in 9 1982 at KFC along with the rest of hubline was bought by R.J Reynolds America's largest cigarette maker at the time until they were becoming involved in consumer Foods having acquired Del Monte three years earlier and they would go on to acquire Nabisco three years later but after only four years they sold KFC to Pepsi who paid 850 million dollars for it a deal that seemed to make sense for a number of reasons but mainly because Pepsi had previously acquired Pizza Hut and Taco Bell I have talked about all of this in previous videos if you're interested in hearing more about it but I do want to mention that KFC used to sell Coke products and that of course switched over to Pepsi products following the acquisition and this right here goes along with their menu issues Taco Bell and Pizza Hut were both known for introducing successful new menu items so when Pepsi took control it was looking like they would do the same for KFC they invested millions of dollars into a new complex dedicated to it but it never seemed to pay off in the way that you would hope introducing a lot of failed products around that time to finish off the list in 1990 37 all of those restaurants under Pepsi's control were spun off into their own separate publicly traded company called tricon that was later renamed yum brands they went on to buy and sell other fast food Concepts even tried co-branding many of them under the same building but that is where KFC Still Remains today so now back to my other list another big reason behind their troubles has been their marketing when Colonel Sanders died in 1980 at 90 years old they lost their spokesperson honestly is there any other brand out there with someone more associated with it than KFC and Colonel Sanders I was not even alive at the same time as him and I associate the two and I don't really know exactly what they're supposed to do here either attempts at different campaigns haven't been nearly as catchy or effective they have tried to bring them back in cartoon form in the 1990s and more recently as various celebrities dressed up as him that one right there was part of a 185 million dollar investment in 2015 meant to bring new life into the brand he was originally portrayed by comedian Daryl Hammond who felt Miss led by the company because he thought that he would be the longtime spokesperson but then he was replaced by Norm Macdonald and Jim Gaffigan and many others including Reba McIntyre I don't know it's a bit polarizing it can be seen as disrespectful to an extent maybe it brought more attention to the brand but I don't see any figures suggesting that it's been all that effective in 2009 KFC did have a Hit menu item with their grilled chicken but the marketing of it was not handled very well KFC sent a letter to the UN asking them to recognize a country called grilled nation made up of the 60 million people who ate their new product and then they sent someone dressed as Colonel Sanders to the UN building who somehow got through into restricted areas and even shook hands with some important people there again potentially a misguided even disrespectful marketing attempt still related to the grilled chicken there was another Fiasco where Oprah Winfrey promoted a deal on her show where the public can download a coupon for a free meal of it and ensure too many people showed up the wait times were too long and they couldn't honor all the coupons it was more bad publicity for KFC another potential reason behind their decline would be the health content I don't claim to know exactly what people should or shouldn't be eating but Kentucky Fried Chicken is generally considered to be among the more unhealthier restaurants the public has become more health conscious over time especially compared to their dominating years in the 1970s and that hasn't been good for business I mean they have the word fried in their name well actually in 1991 they changed their official name to the initials KFCs so they wouldn't have that unhealthy sounding word in their name soon after they attempted to introduce more health conscious menu items which again didn't seem to catch on all that well in the early 2000s they had a campaign saying that KFC stood for a kitchen fresh chicken seemingly another health-oriented campaign in 2006 they were sued for the Staggering amount of trans fats on their menu and then later that year committed to phase out the use of trans fats in their cooking oil the Double Down sandwich in 2010 used fried chicken instead of a bun so you know that was joked about for being unhealthy I don't know it's just been a constant struggle for KFC to be seen as a at least somewhat healthy option the final reason on my list is kind of a combination of leftover smaller reasons that I'm just going to call it their reputation KFC just does not have a strong reputation at this point they've had a history of poor relationships with franchisees they've been constantly criticized by animal rights groups whenever they renovate or update their restaurants it always seems like it's a few years overdue their customer service has been criticized and that's especially harmful considering their biggest competitor Chick-fil-A is known for their incredibly good customer service in 1991 when they changed the name to the initials it started this huge rumor that they had to change it because they were genetically doing something with the chickens and then the resulting new creature could no longer legally be called a chicken to be clear that's not true but it's a rumor that's been hanging on for like three decades now so there you have it KFC is not quite as big or as respected as it used to be and those are what I believe to be the biggest reasons behind it though I do want to mention that everything in this video video applies to Kentucky Fried Chicken in the United States they've actually been way more successful in different markets around the world specifically in China they were the first U.S fast food chain to open there in the 1980s with a much different menu and have since capitalized on that Head Start by becoming one of the most recognizable U.S brands in the country in 1997 their International locations surpassed the ones in the U.S and today account for over 80 percent of them so to be fair to KFC most of their attention has been in foreign markets over this time and maybe we can consider that yet another reason that they've been slipping in the U.S let me know in the comments what do you think about KFC do you like getting that classic bucket of chicken or one of their limited time offerings or would you rather go to one of their competitors and has that opinion changed over the years also do you agree with my list of reasons behind their decliners there's something you would change about it this was a wide topic compressed into a short amount of time so if you want me to expand on any of it like maybe a video about Colonel Sanders himself let me know and any other thoughts you have about Kentucky Fried Chicken or anything else in this video leave them in the comments I'd like to hear what you have to say thank you for watching [Music]

Channel: Company Man

Views: 3,256,688

Keywords: Kentucky Fried Chicken, Fast Food, Chicken Restaurant, KFC, Business, Decline

Id: 6z-Tqak6ydM

Length: 12min 27sec (747 seconds)

Published: Wed Oct 26 2022