KFC eyes 'Grilled' rebranding of 'Fried' legacy: expanded tests of new Kentucky Grilled Chicken product line aim for 2009 rollout

Nation's Restaurant News,  March 31, 2008  by Steve Coomes

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LOUISVILLE, KY. -- Representing a potential sea change in its 60-year-old image, KFC Corp. will give franchisees the option of rebranding their stores "Kentucky Fried & Grilled Chicken" as part of a scheduled chainwide rollout of a nonfried product undergoing trials nationwide.

The revised moniker already is being used on KFC store facades during test marketing of "Kentucky Grilled Chicken" in at least six cities where the product is offered as a no-extra-cost alternative on all meal combos and variety buckets.

Some 45 corporate KFC branches in San Diego alone feature the new chicken. That city and Colorado Springs, Colo., were the initial test markets, starting 30 months ago. Branches in Indianapolis: Oklahoma City; Jacksonville, Fla.; and Austin, Texas, also are selling the new chicken.

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In addition to a standard flavor, varieties such as rosemary-citrus, orange-chipotle and honey-barbecue are in the testing pipeline, as are snack products that would use the new chicken. KFC has failed repeatedly for more than a decade to find a following for nonfried chicken offerings, but the struggling division of Yum! Brands Inc. is pinning its hopes this time on what it says is improved cooking gear that would be deployed chainwide domestically by next spring.

KFC president Gregg Dedrick said the grilled product would "contemporize" the brand and mark a defining shift in its marketplace identity.

Exhibition cooking will not be part of the change, however, though window signs reading "Now Grilling" will be part of nonmandatory store upgrade packages the franchisor expects operators will make as part of regular remodels. Food containers also have been redesigned to carry the new product's name.

Kentucky Grilled Chicken uses the same marinated, bone-in chicken as KFC's Original Recipe and Extra Crispy items, but it gets a sprinkling of spices before cooking in a fully automated, high-temperature convection-steam oven.

Technically, the chicken is roasted, although the oven, estimated to cost $10,000 to $15,000, uses a patented nonstick "grill plate" to stripe the chicken.

Doug Hasselo, KFC's chief food innovation officer, said

the oven would get a lot of use as the grilled line is broadened over time. Including work in KFC's corporate kitchens in Louisville, the new product has been in development for four years.

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The boxy roasting device and the grill striping yield a chicken that's said to be tastier and juicier than

KFC's previous nonfried offerings. Taste would be the focal point of the chain's so-far-unspecified national marketing plan, officials have indicated.

About twice the size of an institutional microwave, the new roaster cooks 80 pieces of chicken at a time in roughly 22 minutes. Without breading, operators say, the production process is simple, and the oven is self-cleaning.

Sales results at test locations were not divulged, nor were implementation costs or the chain's planned rollout-marketing budget. However, per-store costs would not be out of line with comparable upgrades, KFC indicated.

Dedrick acknowledged that Kentucky Grilled Chicken would not overshadow fried offerings, but would show "customers they have more options." He said the new product "appeals to people who eat fried chicken and people who don't eat fried chicken."

Kentucky Grilled Chicken would meet the nutritional needs of an increasingly health-conscious public and attract lapsed customers who had given up eating the chain's fried offerings, he added.

The Kentucky Grilled Chicken product, depending on the part, has as much as 50 percent fewer calories and half the sodium, and up to two-thirds less fat than KFC's other chicken, officials indicated.

KFC has been unable to shake the sales downturn that has stung many quick-service chains in recent months, including its closest but still distant rival in the fried-chicken category, Popeyes Chicken & Biscuits.

Yum chairman David Novak told analysts recently that KFC's performance last year "underscored the need for dramatic change" that its new grilled chicken would represent as the "centerpiece of an overall brand transformation."

However, some franchisees are known to be unconvinced about the grilled chicken's ability to reinvigorate the brand and have cited consumers' consistent preference over the years for KFC's fried signatures.

That factor, and inconsistent cooking equipment and production forecasting, led to the Coloners Rotissserie Gold line being plucked by the chain in 1996, three years after $100 million was spent on introductory promotions. The Rotisserie Gold products, which one former KFC franchisee called "a nightmare to execute," were replaced by Tender Roast items that survive today on the chain's menu only in a sandwich, a Twister wrap and a salad topping.

But franchisees involved in field-testing are enthusiastic about Kentucky Grilled Chicken and its automated cooking process. "The night crews love being able to push a button on the cleaning mode and not have to do anything else with it," said Lyndon Poindexter, a four-unit franchisee in the Indianapolis market.