El Pollo Loco Burns KFC With Taste-Test Challenge

Negative Ads Win California-Based Chicken Chain Market Share

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CHICAGO (AdAge.com) -- Going negative doesn't just get your brand tweeted; it can also build market share. El Pollo Loco, a 418-unit chain based in Costa Mesa, Calif., launched an aggressive campaign against KFC in April, as the chicken giant released Kentucky Grilled Chicken. El Pollo is a Mexican concept that specializes in citrus-marinated, flame-grilled chicken.

Using company President Steve Carley in a series of spots from agency Krueger Communications, El Pollo challenges KFC to a taste test, and describes KFC's product as "cooked on a griddle, no open flames at all." In subsequent ads, with the number 877-EPL-STEVE running across the bottom, Mr. Carley says KFC has yet to call him back, and that KFC's product is flavored with "rendered beef fat" and "beef powder."

El Pollo Chief Marketing Officer Karen Eadon said the spots have not only "disrupted" the Kentucky Grilled Chicken launch in Southern California, they have netted El Pollo four or five market-share points in the region. The chain has not posted second-quarter results.

Ms. Eadon went on to describe KFC as "the gift that kept on giving." While the Yum Brands chain has not officially respond to the taunts, El Pollo said two messages left on its challenge hotline were traced to KFC headquarters. The alleged calls are now on YouTube, with sarcastic commentary and 30,000 views to date. One caller refers to "Highway 5," tourist speak to Angelenos, who call it "the five." Another caller compares El Pollo disparagingly to KFC's "OR," an insider acronym for the Colonel's "original recipe." In another YouTube effort, El Pollo pointed out that KFC's infamous Oprah coupons were not valid on Mother's Day. The resulting "What does KFC have against Moms?" video has gotten 117,000 views, and led to a story in The Wall Street Journal.

KFC not too concerned
KFC, which posted its first same-store-sales increase in two years last week and is calling Kentucky Grilled Chicken its most successful launch, isn't terribly concerned with El Pollo. "Our efforts are focused on keeping up with America's unbelievable demand for Kentucky Grilled Chicken, the biggest product launch in company history, which is a much bigger priority than responding to the marketing efforts of a small regional chain," KFC spokesman Rick Maynard said in a statement. "The product has been as well-received on the West Coast as it has on the East Coast, and everywhere in between." KFC outspent El Pollo more than 15-to-one last year. According to TNS Media Intelligence, El Pollo spent $16 million in measured media during 2008, compared with KFC's $271 million.

Ms. Eadon said after she and her team read that KFC was launching a grilled product about a year ago, they quickly ferreted out a test location for the product and began building a case against it. El Pollo is a well-entrenched brand in Southern California, and has have roughly the same number of locations in the region as KFC, about 270. Ms. Eadon said the brand stood to lose a great deal if Kentucky Grilled Chicken got a lot of regional traction. So El Pollo started 2009 with ads that built up the health benefits of grilled vs. fried, and planned its first attack for April, when KFC began national grilled-chicken advertising.

Ms. Eadon also said PR has been a key component of its "Taste the Fire" challenge of KFC. "Whenever they were mentioned, we wanted to be mentioned," she said. The chain estimates that it has gotten about 8.3 million free media impressions as a result of the campaign.

The small Mexican chain isn't the only brand to benefit from negative advertising of late. Campbell's and Progresso both posted gains following a series of attack ads and Domino's posted its first quarterly same-store sales gain in quite sometime after a series of attack ads against Subway. The sandwich giant is a private company that doesn't release sales. However, industry analysts maintain that the brand is raking in some of the segment's best sales gains. Even Starbucks, while still posting same store sales on the decline, said yesterday that McDonald's massive McCafe advertising has boosted awareness and trial in the category, and is one of several factors helping the chain pull itself out of freefall.

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