Wednesday, March 1, 2023

KFC By-By Baby Boomers Hello Gen Z Maybe Not


Marketing to baby boomers in 2023 just might be an investment that will not pay off. Once again Steven Johnson reminds us that restaurant companies that ‘Look A Customer Ahead’ will do better over time that those companies that simply can’t let go of the past.  Johnson stated, if your restaurants and marketing messaging look more like 2011, 2016, or 2020, and you are dispersing the marketing in the same legacy channels of distribution you did back then you are out of touch. 

Marketing, brand messaging, and menu innovations that drive more occasions ensuring value require an omnichannel approach with distribution in new channels with a strong focus on geo enabled, time relevant, hand-held marketing for immediate consumption according to Johnson.

Regular readers of this blog know that back in 2015, KFC recruited Saturday Night Live alum Darrell Hammond to play Colonel Harland Sanders in a series of commercials declaring, “I’m back America!” The campaign gained some traction and the chain’s celebrity carousel continued to turn for the next several years, with Colonel interpretations from Norm Macdonald, George Hamilton, Rob Lowe, Reba McEntire and several others. The campaign was credited in part for helping to drive KFC’s turnaround – bringing the chain back to positive sales and positioning it for net new unit growth for the first time in nearly 20 years. 

Then in June, KFC introduced a new celebrity partnership with fellow Louisvillian and Grammy Award nominee Jack Harlow, though this time around, Harlow plays himself – a definitive shift for the brand. And an intentional one at that.

Looking A Customer Ahead, KFC’s chief marketing officer Nick Chavez came on board in late 2021 as the chain was experiencing a strong tailwind from its chicken sandwich launch. The product enabled the company to continue its pre-pandemic momentum and allowed Chavez to rethink its position. In doing so, he prioritized expanding the brand’s audiences, including younger consumers, which is where Harlow comes into play.

KFC’s chief marketing officer Nick Chavez, stated, “It’s fair to say our core customer, the customer who comes to KFC most frequently, is older than the average quick-service customer. And that’s great, we want to continue to serve them with a finger licking experience every day,” …“And we need to bring in new audiences and invite new generations of customers to discover or rediscover KFC. Everyone has a KFC moment, and we hear amazing stories about KFC experiences. Sometimes those stories come with a past tense, though.”

With a clear understanding that both Gen Z and Millennials are seeking ‘food discovery’, Chavez is focused on menu innovations, like the chicken sandwich or its new wraps or the KFC chicken nuggets, which are currently in test in North Carolina. These are the types of products that resonate with busy families with kids – the very audience the company is targeting. 

Chavez continued, “The Colonel advertising was great and very distinctive, but the Colonel as a showman was a little bit distant from the finger licking good food we promise to consumers every single day,” ... “So our pivot was not about abandoning the Colonel, but moving a little bit from the enduring image of the Colonel to customers and food. We wanted to convert some of that distinctiveness, some of that attention-getting quality of the Colonel advertising into actual relevance and actual visitation through our new approach.”

So far, this new approach also seems to be working. KFC U.S.’s sales have continued to stay mostly positive despite challenging year-over-year laps from its chicken sandwich launch. The product’s success has inspired the company to press the gas on more “every day” offerings. That means finding a balance between its core fried chicken and buckets and newer “to-go” offerings such as the sandwich and its variations, bowls, wraps and whatever else may come.

Building a Larger Share of Stomach


Looking A Customer Ahead

Chavez notes that enticing younger consumers is about more than just offering relevant menu items, however. There’s also a value piece and a digital piece, and both of those have also become bigger priorities accordingly. As an example, the company is currently in the process of updating its app so that users have exclusive access to digital promotions in a new “special offers” section. The rollout is underway and is live in more than 50% of the U.S. system.

The price, value, service equilibrium needs to be relevant, “We want to be always staying on with value – for both core and new items – so we can really drive repeat visitation and frequent visitation. There are multiple ways to attain that value. We look at it from an omnichannel perspective – however the customer wants to interact with KFC, are we offering good value for the money for that vehicle?” Chavez said. “We know our digital customer is a more valuable customer to us – they come in more frequently, they buy more food, so we’re aggressively trying to acquire new app downloads.”

I’m sure you have figured this out, KFC has also shifted its marketing spend to better engage younger consumers. The company doesn’t break out its media investment mix, but Chavez notes that video has become a bigger focus.

Customer relevance matters, Chavez went on, “It’s not that younger people watch less video, in fact they consume far more video, they just consumer it in different spaces and places. The biggest shift in our marketing mix has been a pivot to addressable, targeted video – connected TV, online video, streaming video -with the primary screen being the mobile phone” .

Consumers are dynamic not static.  When your customer moves to a new platform or avenue of distribution you must move with them.  It’s that simple.

Life-long learning is required as Chavez points to his previous experience as SVP of Marketing at Nintendo for enabling him to better understand how to connect with the very demographic KFC is now targeting – families with kids. So far, the shifts he’s led seem to be working. He said the chain experienced a “fairly rapid demographic shift” following its Jack Harlow promotion last year and called it a “great moment for our brand.”

“We continued to see that demographic shift with our Mac and Cheese Bowl promotion (in July). The beginning of 2022 was a rough – we were fighting omicron, facing labor shortages, our franchisees were facing inflation. But as we launched Jack Harlow and then the Mac and Cheese Bowl, we saw the appeal of the sandwich, of the bowls business, for our younger customers, and we started to see a pickup in total transactions. The Colonel is a critical part of our brand, and his voice is in every TV commercial we make to this day. What we’ve noticed, however, is that we really had an opportunity to be more relevant to new audiences through the food we serve.”

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

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