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KFC in China

How the Colonel convinced the Chinese to eat more chicken — lots of it

KFC’s success in opening and operating fast food restaurants in China is such that one analyst declared it to be “the most successful foreign company in China.” Now, here’s one of the broader effects of that achievement — a huge surge in chicken consumption among the Chinese. According to China’s Ministry of Agriculture, urban Chinese increased their per capita intake of chicken by 219% between 1983 to 2006. Factors like rising incomes and greater availability of packaged meat in supermarkets have played an important role in this, but KFC, which is owned by the Louisville, Ky-based YUM Brands (YUM), is one of the biggest single contributors.

We know this, in part, because over the span of just 10 years, poultry consumption at fast food outlets, restaurants and hotels has more than doubled, from 4.4 million metric tons in 1998 to 7 million metric tons in 2008, according to Guo Huiyong, an analyst at Orient Agribusiness Consultant in Beijing. Fast food in China is dominated by KFC, which opened its first restaurant there in 1987. McDonald’s, the next biggest competitor, has 1,100 restaurants to KFC’s 3,900.

China’s newfound love of chicken — pork has been its staple meat for generations — is one instance of how the global expansion of American food companies is changing the way the world eats. KFC has been successful in China partly because it adapted its menu to local tastes, offering things like the Dragon Twister, a chicken wrap in a Peking duck-type sauce, and a spicy tofu chicken rice based on the cuisine of Sichuan province. But they’re also getting Chinese accustomed to eating previously non-existent foods like buckets of the Colonel’s ”secret recipe” fried chicken.

In India, the land of dal, samosas and vegetable curries, Kraft is introducing Oreos and Tang. Kraft’s Anand Kripalu, who heads up the company’s India and China units, says he hopes to leverage the company’s Cadbury acquisition to dramatically boost sales of chocolate, gum, candy, powdered beverages and biscuits. If Kraft succeeds at this, the result will be a lot more Indians eating processed foods. Already, the packaged food market in India is growing by 15% a year.

Exporting American products represent huge growth potential for US food companies. YUM, which also owns Taco Bell and Pizza Hut, now gets more of its operating profits from KFC in China than all its U.S. restaurants combined. But from a public health point of view, there’s no good news here. Americans have some of the highest rates of obesity and diet-related chronic diseases in the world, and many attribute that to a diet heavily skewed towards processed and fast food.

Source: BNet

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