Meal kits and buckets of bubble tea: How Yum China is pivoting

  • March 13, 2021
Yum China (YUMC), the local owner of KFC, Pizza Hut and Taco Bell, is tapping into new ways to reach customers at home as the pandemic continues to dampen its business.

The company, which reported better-than-expected earnings on Thursday, said that home delivery and takeout now account for more than 50% of sales. Revenue grew 11% to almost $2.3 billion, though same-store sales dipped 4% in the quarter ended December, compared to the previous year.

“Home consumption is a growing trend. The pandemic has accelerated that,” CEO Joey Wat told CNN Business.

Yum China is now trying to cash in further on the shift with a push into meal kits, which encourage people to make their own “KFC” at home. The product line is an offshoot of KFC called “Kai Feng Cai,” which is a Chinese nickname for the brand. But it’s no ordinary bucket of fried chicken. Instead, the kit includes dishes such as chicken breast, chicken soup, and chicken “luosifen,” a snail-based rice noodle soup dish that has become immensely popular in China.

Wat said that the initiative, which launched last October in 2,000 stores, was not just a pandemic play. After an “encouraging” show of results, the company plans to expand the offering to more cities.

Beyond Meat brings its plant-based burgers to KFC and Pizza Hut in China
Yum China, which has about 10,000 stores and 400,000 employees, has been experimenting heavily to try to bring its business back to pre-pandemic levels, even as China has recovered faster than most major economies.
Over the last year, it’s launched smart lockers for customers to pick up their takeout, self-driving vans that serve breakfast to office workers, plant-based meals, and home delivery of Pizza Hut steaks. It’s even started to let customers buy 1.5 liter buckets of bubble tea to take home, which “sold out within days,” said Wat.
Yum China has started selling oversized buckets of bubble tea for home consumption. The new products "sold out within days," according to its CEO.

The company has reason to cling onto any new idea that sticks. On Thursday, it warned of a shaky recovery, which chief financial officer Andy Yeung attributed to “regional outbreaks [of coronavirus], reduced travel and lingering…

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Meal kits and buckets of bubble tea: How Yum China is pivoting

 
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