According to the statement, when Yum Brands was spun off from
PepsiCo in 1998, 22% of its profits were sourced internationally.
Today, about 65% of the company's profits are from the China and
Yum Restaurants International divisions. Yum said it expects that
percentage to grow to 75% by 2015. In the U.S., Taco Bell accounts
for approximately 60% of the company's profits, followed by Pizza
Hut and KFC.
Maybe a bigger question is, who would want to buy them?
Morningstar analyst RJ Hottovy said that private-equity
investors are plausible buyers for the brands. "Since these brands
didn't fit into Yum's strategy, they could be seen as neglected.
Under private equity they could get more attention and more capital
to upgrade their look, making them more valuable."
"These brands have not received a lot of attention and they are
not a growth vehicle," said Darren Tristano, exec VP at Technomic.
"They're basically non-essential brands. I'd even argue that
they're considered step-children." He added that private equity is
a recent trend in the restaurant industry, as private equity
investors tend to buy brands selling at low prices. "The key is to
buy low and sell when the industry is doing better. If you can get
a nice price and streamline the costs, then you might be able to
build some brand equity."
Mr. Tristano also said that while private equity buyers are more
likely, a restaurant company could potentially buy the brands.
"It's possible someone may want to revitalize, for instance, the
A&W drive-in concept. So someone like Sonic could be a
Yum spends a relatively small amount on marketing Long John
Silver's and A&W compared to Pizza Hut, KFC and Taco Bell.
According to Kantar, Yum spent approximately $1.1 million on U.S.
measured media for A&W in January through October 2010. Yum
spent about $1.8 million on A&W in 2009. For Long John
Silver's, Yum spent about $23.2 million for the same 10 months. It
spent about $27.2 million on the brand in 2009. Overall, the
company spent nearly $614 million on U.S. measured media from
January through October 2010, compared to about $710.5 million in
According to Technomic, A&W accounted for about 0.1% of
total sales in the limited-service restaurant (including both the
quick-service and fast-casual categories) sector in 2009, and Long
John Silver's accounted for about 0.4%. Comparatively, Taco Bell
made up about 3.6% of total sales for the limited-service