Will Colonel Sanders survive KFC’s marketing overhaul?

As it nears the end of a search for new creative and media agencies and welcomes a new chief marketing officer, KFC faces a bucket of questions about its future direction, including whether Colonel Sanders is still fit to fight the Chicken Wars. The agency review and executive changes come amid a tumultuous period for the storied chicken chain, which has absorbed new competitive intrusions and could stand to do better with high-spending younger consumers and digital shoppers, restaurant industry experts say. Overhanging its next creative partnership is the question of whether the chain could back away from its long association with Colonel Sanders, whose reawakening powered an electrifying brand comeback and some of the restaurant industry’s most memorable campaigns. But according to some observers, the Colonel simply isn't an appropriate symbol for the times culturally, saying his image is out of step with diverse, modern consumers. Plotting the character’s future will be among the key tasks for KFC’s new agency, along with figuring out ways to gain traction with younger consumers and drive interest in a loyalty program the chain is expected to unleash soon. Agency and leadership turnover Parent Yum Brands put KFC’s creative and media partnerships into review in September, unraveling a wildly successful six-year creative relationship with Wieden+Kennedy Portland. Yum in a statement credited Wieden for having been “a valuable part of our brand turnaround, creating memorable campaigns that grew brand consideration and sales. We are proud of what we have achieved together.” But the relationship was not without conflict. In 2019, Wieden+Kennedy’s New York office landed the massive McDonald’s account, putting two of the country’s biggest fast food brands under the agency’s creative watch. That change—particularly how it was communicated—didn’t sit well with W+K’s Portland contingent, which worried that the firm’s relationship with McDonald’s could interfere with its pursuit of other accounts, including a potential deal with KFC’s sister brand, Pizza Hut, that was discussed but never materialized, a person familiar with the matter told Ad Age. A Wieden+Kennedy spokesman declined comment this week when asked about the matter. W+K’s KFC loss came in the wake of turnover at the brand and agency. KFC’s chief marketing officer, Andrea Zahumensky, resigned in April. Nearly two months later, Eric Baldwin, W+K Portland’s executive creative director, stepped away from the agency, following his partner, Jason Bagley, who had left a year earlier. Both had been key leaders in steering the account. KFC in the meantime is shaking up its global front office: Retiring CEO Tony Lowings is to be succeeded by Sabir Sami, currently KFC’s global chief operating officer, on Jan. 1. Dyke Shipp will also be taking over as president. Register for Ad Age Next: CMO at AdAge.com/NextCMO. Sandwich arms race The fast food landscape has undergone considerable shifts. Popeyes Louisiana Kitchen’s 2019 introduction of a chicken sandwich proved to be a phenomenal seller and kicked off something of an industry-wide chicken sandwich arms race, with McDonald’s, Burger King and KFC introducing new entrants in the category over the last year, each with considerable marketing pushes. KFC tested its new chicken sandwich in 2020 and began marketing it nationally in early 2021, well over a year after Popeyes’ debut sparked the chicken sandwich wars and giving rivals plenty of time to gain market share. The pandemic introduced additional challenges, as chains adapted to unprecedented demand for online ordering, delivery and takeout. KFC was well-suited to meet some but not all of these challenges. A loyalty program, which can deliver personalized offers to shoppers and drive various consumption occasions, is still in the development stage at KFC in the U.S. That is expected to be one point of emphasis for the brand in the months ahead. McDonald’s, also considered something of a late arrival to quick-service loyalty, signed up more than 20 million members over its first three months, illustrating the potential of such a program. Industry experts see KFC as a durable brand whose advantages include the fact that it sells its food by the bucket, making it well-suited for families. However, consumer surveys identify areas of weakness: Its kids’ menu “is a red flag” that has limited its appeal to high-spending young parents, said Robert Byrne, director of consumer insights for Technomic, the restaurant consulting firm. In Byrne’s view, smaller brands like Raising Cane’s present a challenge to KFC by having done a better job of “adultifying” a similarly craveable menu that is winning with younger consumers. “These are savvy customers who know their options,” Byrne said. “They don’t want the junior version of what Mom and Dad like.” According to Technomic, 31% of KFC’s frequent guests are millennials compared with an average of 40% in the broader quick-service restaurant industry. KFC also draws fewer wealthy diners: 31% of its frequent guests have household incomes in excess of $75,000 compared to an industry average of 41%. Menu opportunities According to John Gordon, a San Diego-based industry consultant, KFC’s biggest opportunity is in its menu, saying it needs more innovative and profitable choices that will inspire franchisees to get behind the sales effort. Gordon sees the new chicken sandwich as one such option, “but they still need to build on its potential.” Doug Reifschneider, an independent marketing consultant with Chief Outsiders, a fractional CMO provider, agrees, saying “innovation is the lifeblood for quick-service restaurants.” KFC is making up for lost sales due to restaurant closures during the pandemic: In the third quarter, U.S. same-store sales climbed by 4% on the strength of its new chicken sandwich and the boost of group eating occasions. KFC totaled $4.7 billion in U.S. systemwide sales in 2020, making it the 14th-largest restaurant chain, just ahead of fast-growing rival Popeyes, which rung up $4.6 billion in sales from 2,600 U.S. locations, Technomic figures show. Chick-fil-A is the largest U.S. chicken fast feeder, with $13.7 billion in sales in 2020, according to Technomic estimates. W+K’s legacy KFC had suffered through a decade of declining sales when Wieden+Kennedy began working for the brand in 2015. The partnership reunited counterparts of the successful Old Spice campaign for Procter & Gamble; KFC’s chief marketer, Kevin Hochman, was a former P&G executive and had worked with Baldwin and Bagley on that effort. Wieden made a renewed Colonel Sanders the centerpiece of its marketing strategy, reintroducing the character in a commercial starring Darrell Hammond of “Saturday Night Live” that aired for the first time in May of 2015. Around 80% of viewers said they loved the new ad. Everyone else hated it. “But you know what, that’s better than 100% being indifferent and that really is what’s important,” Yum Brands’ then-CEO, Greg Creed, said at the time. “We had lost relevance in the U.S.: 60% of millennials had not eaten KFC. So I’m very excited that this work is really distinctive and disruptive. And I am actually quite happy that 20% hate it, because now they at least have an opinion, they’re actually talking about KFC and you can market to love and hate, you cannot market to indifference.” Wieden cleverly kept the campaign fresh behind a rotating cast of actors portraying the Colonel in increasingly memorable activations: In one, the Colonel was rendered as a bearskin rug; in another he hosted a dinner party as Robocop. He was a romance novelist and an astronaut. The campaign platform introduced a bit of diversity and even included a female Colonel (Reba McEntire) and a Latino Colonel (Mario Lopez). Ads also reemphasized the brand’s legacy strengths, including its “Finger Lickin’ Good” slogan and distinctive red-and-white-striped design. The effort helped to generate years of growing sales and relevancy for KFC. Colonel concerns? Yet some still wonder if the Colonel has run his course. “KFC has complicated issues to address,” said Tim Calkins, a professor of marketing at Northwestern University. “One of the real questions is what do you do with the Colonel Sanders character? Is it as inclusive and diverse as it needs to be to connect with audiences today?” New attention on social and racial justice arising during the pandemic has encouraged numerous brands to overhaul legacy associations that could be seen as insensitive, or based on outdated values. Consumers in the meantime are increasingly supporting brands they feel reflect their own beliefs. The character is based on Harland David Sanders, a real-life businessman who developed a chicken recipe at a Kentucky restaurant and granted its first franchise in 1952. “Colonel” was an honorary title granted to him by Kentucky Gov. Lawrence Weatherby in 1950. He served as the chain’s spokesman and public brand face for decades, providing an enduring, regal but folksy charm. “The Colonel harkens back to another time, to the South and to Southern aristocracy. You could put him in the same class of Aunt Jemima; characters that promote classic stereotypes that we don’t want to see today,” Calkins said. “So do you try and change the imagery or distance yourself? It’s a question we’ve seen a lot of brands wrestle with, and one I would suspect they are dealing with in the agency review.” It seems certain that KFC will move to better communicate with younger consumers, a need that some see as a strength of its incoming chief marketing officer, Nick Chavez. Chavez spent more than 11 years at Nintendo, helping the gaming giant launch its Switch platform and hundreds of new games. “I am not at all surprised that KFC is interested in the strategy and tactics around consumer engagement of a younger audience, which is ground zero for the gaming industry,” said Richard Sanderson, marketing, sales and communications practice leader at Spencer Stuart, the executive recruiting firm. “I imagine that experience brings a lot of value to brands like KFC.” Chavez is expected to weigh in on the selection of new agencies; the process is expected to be complete before the end of the year. Shops in contention for the creative account include FCB, Johannes Leonardo, Mullen, Fig and Arnold, while Publicis Groupe’s Spark Foundry, WPP’s Wavemaker and IPG’s UM are vying for the media assignment, according to people familiar with the matter. “We were extremely pleased by the breadth and quality of agencies that participated in our request for information for the KFC creative and media business,” a spokesperson for KFC said in an email. “We received interest from some of the best agencies in the industry. While our search process remains ongoing, we are optimistic about finding the best agency partners to help deliver our next chapter of growth.” Don’t miss the latest news. Sign up for Ad Age newsletters here. See Ad Age's 2021 Social Commerce Guide here. How NFTs and the Metaverse could solve supply chain issues All the social commerce capabilities introduced in 2021 How retail chains are using social commerce this holiday Influencers impacted by supply chain shortages

Will Colonel Sanders survive KFC’s marketing overhaul?

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