9

Yum! Brands: A global trifecta

Yum! Brands has expanded to more than 4,000 restaurants in China -- including this KFC in Beijing, China.

Image of Taking People With You: The Only Way to Make Big Things Happen
Author: David Novak
Publisher: Portfolio Hardcover (2012)
Binding: Hardcover, 256 pages

Kai Ryssdal: Yum! Brands, out of Louisville, Ky., runs a virtual trifecta of fast food. They own Kentucky Fried Chicken, Pizza Hut and Taco Bell. And they run 'em all over the world. More than 35,000 restaurants in more than 100 countries.

David Novak is the chairman and CEO of Yum! Brands. Mr. Novak, good to have you with us.

David Novak: It's great to be here.

Ryssdal: Let me ask you the first question first: How's business?

Novak: Well, you know, our business is -- we just came off a very strong year. Our earnings per share growth will be at least 13 percent. So that's the 10th straight year that we've had at least that kind of performance. So we feel good about that. And we're going into 2012 very, very optimistic.

Ryssdal: You sound -- I must say -- like a man whose never heard the word recession.

Novak: Well, you know, we never really look at the economy as any kind of excuse for performance. One of the good things about our industry -- in quick service in particular -- our food is always affordable, it's always convenient. You know, it fits in peoples lives. So, you know, we don't take on any excuses.

Ryssdal: Fair enough, I mean, you can't have any excuses I suppose, right?

Novak: Well it doesn't do you much good. You kind of have to deal with the cards that you dealt with.

Ryssdal: Well, where do you grow though? I mean, you guys are -- market saturation is a little thick of a phrase -- but you have to look long and hard to find a place that doesn't have a Yum Brands store in it -- whether it's Pizza Hut, KFC or a Taco Bell.

Novak: Well, what we're blessed to have is a business that 75 percent of our profits now come outside of the United States. We have 4,000 restaurants in China, we just made a new division in India -- 'cause high growth in India. Africa is really taking off for us. We see ourselves as a global business with lots of global growth ahead.

Ryssdal: Well, so I'll tell you, you mentioned China. I was there last summer and it's almost like it is here. You can't turn around without hitting a Pizza Hut.

Novak: Actually we have 3,500 KFCs there. We outnumber McDonald's 3 to 1 there. Now the big news -- and you bring it up -- is that Pizza Hut is really taking off.

Ryssdal: Can I tell you a quick story?

Novak: Sure.

Ryssdal: When I was there in Beijing in 1996, we went to the local Pizza Hut -- my wife and I -- and we couldn't get in. There was actually a red velvet thing because you have to make reservations at Pizza Hut.

Novak: Well, the place is always packed.

Ryssdal: When do you decide enough is enough?

Novak: I think there is always unfinished business. You know, there is tremendous opportunity to grow. When you look at our business in the United State, for example, when you take our three brands -- Pizza Hut, Taco Bell and KFC --we have 60 restaurants per million people. In China it's only three. In India it's less than three. In South Africa it's less than three. So unlike a lot of companies where you're wondering where you're going to get your next little bit of growth, we look at the world -- seriously -- as our oyster in terms of opportunities as we move ahead.

Ryssdal: Before I let you go, how many times a week do you figure you eat at KFC or Taco Bell or over at Pizza Hut?

Novak: I probably eat our food on average four or five times a week.

Ryssdal: Do you get it on the house or do you pay for it?

Novak: I try to pay for it wherever I go.

Ryssdal: Fair enough.

Novak: Look, our guys out in the field, they're working hard to get those sales so I might as well help them out.

Ryssdal: David Novak, the chairman and CEO of Yum! Brands, thanks very much for your time.

Novak: Thank you very much.


Ryssdal: Read an excerpt of David Novak's new book, "Taking People with You."

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
Image of Taking People With You: The Only Way to Make Big Things Happen
Author: David Novak
Publisher: Portfolio Hardcover (2012)
Binding: Hardcover, 256 pages
Log in to post9 Comments

Kai, why not do a report on alternatives to this global glut of unhealthy food, starting in L.A. with Community Services Unlimited, which is trying to educate people in South Central about healthy eating (http://csuinc.org). Or the Mercado La Paloma, where you can get a healthy meal in the hood for 5-6 bucks. (Ok. it's not cheap but it sustains the community, which is better than corporations like YUM taking money out of local neighborhoods—and now out of global communities).

I too listened to the interview and I just *knew* the public radio crowd would be hysterical in their criticism of the interview. hahahaha
Our population is fat and flabby because most americans get no exercise, are lazy, eat too much, eat too much unhealthy food, and live sedentary lives.
But to the typical progressive/liberal, personal responsibility is irrelevent. The Gummint takes care of all needs and wants if only it has enough control. You libs may be happy to have some bureuacrat tell you how to live your lives, but not me. Viva the large 2-topping for $10!

What a bunch of softballs Kai hurled at his guest here. I am in complete agreement with posters who question the nutritional value of foods served at Pizza Hut, KFC and Taco Bell. I kept waiting for at least one question to this CEO about America's obesity problem and how we could now be helping to export it to China and India. Perhaps Kai is a shareholder. I lost a lot of respect for his objectivity and interview abilities as I listened to this blatantly promotional piece!

No one is pushing Americans, Chinese or Africans to obligatory eat in these places. Free market, free choices. Instead, kudos to Mr.Novak for his "people first" company culture.
Congratulation for the program and the guests!

Absolutely agree with your perspective, Dconsolara...

Anyone who believes in a free economy knows the culture of a business is dictated by it's people. As diverse an offering of foods there are world wide (QSR, or otherwise), YUM! has accomplished success in a global market. A Big Championship Trophy Hoist is due to Mr. Novak and to his team at YUM! Brands - where he appropriately places the credit for his biggest wins.

I also had a strong reaction to these two men enthusiastically practically gushing about this company's inevitable contribution to the sickening of the rest of the world. Often, when people are talking about business, there seems to be a tacit agreement that there isn't any room for ethics or morality. Not only will this company make its CEO and stockholders rich by increasing the rates of obesity, heart disease and diabetes in other parts of the world, they also seem oblivious to the horrendous suffering of the food animals raised to be consumed in their fast food joints. Do these two realize that in the United States alone, we kill one billion (with a b) food animals a year. Most of whom are raised in deplorable conditions, to live their entire short lives in suffering and then slaughtered so that their parts can course through the arteries of the human population. We need an ethics of care and concern in business.

I completely agree with the comments of Veggieblonde. I was saddened to hear Kai responding enthusiastically to the boasts of the CEO of Yum! Brands. In my minds eye, I could see the growing millions of Chinese and Indian nationals, now giving up their healthy native diets and joining the throngs of the overweight and the obese. Viva la 'Freedom' to advertise!

I completely agree with the comments of Veggieblonde. I was saddened to hear Kai responding enthusiastically to the boasts of the CEO of Yum! Brands. In my minds eye, I could see the growing millions of Chinese and Indian nationals, now giving up their healthy native diets and joining the throngs of the overweight and the obese. Viva la 'Freedom' to advertise!

I listened with great interest to your interview with David Novak, the chairman and CEO of Yum! Brands. While the story was titled "Yum! Brands, a global trifecta" with reference to Pizza Hut, KFC and Taco Bell - for me, the more relevant and pressing title should have been "Yum! Brands, a globaal trifecta of poor health" since the prevalence of those restaurants help cause obesity, heart disease and illness. With almost 34% of all U.S. adults obese and approximately 17% (or 12.5 million) of children and adolescents aged 2—19 years obese, it is no laughing matter. Mr. Novak did refer to "no excuses" several times in an almost haughty manner when Kai pressed him about how his business was growing during a recession. I wonder if he would quip "no excuses" when our health care costs skyrocket given the fattening of America with the help of his businesses. Sad actually.

Sincerely,

Liz Hoffmann (a big fan of your show!)

With Generous Support From...