031249 KFC Leader Answers Questions

USA Today - Just weeks into his tenure as KFC's president,Gregg Dedrick, 44,found himself enmeshed in a controversy about new KFC ads that implied KFC's fried chicken can help consumers diet. Even the Federal Trade Commission subpoenaed KFC about those ads. That's the least of Dedrick's problems. While much of the fast food world has enjoyed banner sales the past year, KFC has been lagging. A nation of increasingly health-conscious consumers won't equate fried chicken with healthy eating. Dedrick, it seems, is caught between a leg and a thigh bone. Maybe that's why, since being named president three months ago, he's granted no interviews -- until now. USA TODAY Money reporter Bruce Horovitz asked Dedrick the tough questions:

Q: Why have you declined all interviews until now?

A: My focus has been on the business. I'm listening to what customers are saying and what franchisees are saying.

Q: By many measures, your core product - fried chicken - seems to go against the grain of the eating habits of a growing number of consumers.

A: KFC is one of the great brands in the USA and the world. It has one of the greatest products of all time: Original Recipe Kentucky Fried Chicken. There also are issues about how we can grow this brand and make it more relevant to consumers. The good news is we have a clearer understanding of what our consumers are telling us (needs to be fixed).

Q: Which is what?

A: 1) Customers are not thinking about KFC as frequently as we'd like. We're not top of mind. We're not as relevant as we once were. 2) Our customers want better value from KFC. They want us to fit their pocket books. 3) They want more than fried chicken when they come in. 4) Our customer wants us to be more reliable. They tell us we're inconsistent in service and in product availability.

Q: This sounds pretty serious. What are you doing about that?

A: We're going back to try to understand who we are as a brand. We want to own the chicken (eating) occasion. We want to be the destination for eating chicken. We can continue to grow that category. But we also know that people should have opportunities to eat chicken in different ways. In 2004, our Oven Roasted line will be launched. That includes oven roasted chicken strips and oven roasted Twisters in a wrap.

Q: KFC tried selling baked chicken years ago, and it flopped. What makes this one different?

A: This one will be off the bone.

Q: When in 2004?

A: We plan to relaunch our brand by early summer. We want to sell our world-famous chicken in all forms the customer wants. A new menu board will represent the backbone of our new menu.

Q: A new menu board is the answer to your problems?

A: The new products will arrive in stores at the same time as our new menu boards. A green section on the board will highlight Oven Roasted products. We're also testing a salad. KFC has never had an entrée salad. There should be one from us in the next 18 months.

Q: You'll be about the last fast food seller to come out with an entrée salad line.

A: We are playing catch-up on some of these things. We think we can do them and be the leader. Our salads will be driven by chicken.

Q: You'll have roasted chicken and salads on the new menu boards. Anything else?

A: Big Value Meals. We don't really have any now. You'll get chicken breast, cole slaw, mashed potatoes and biscuit for $4.

Q: What many consumers want to see on their menu boards is more detailed nutritional information - such as calories, fat and carbs in the items. Will this be part of your new boards?

A: You may see the menu boards built around some compelling nutritional information. That's all we can say on that right now.

Q: Any products you plan to dump from the menu?

A: No.

Q: Could fried chicken become a minority of KFC sales?

A: I doubt that could happen in the near future. But the growth in the fried category will be off the bone (items).

Q: When you claimed in TV spots that fried chicken could be part of a healthy diet, consumer groups and the FTC came after you. And some consumers laughed. If you had it to do over again, would you air the ads?

A: The ads communicated facts that were very relevant to our consumers. It was surprising news. Customers reacted favorably. Our sales were up 1% (for the month of November.) It elicited a number of inquiries from our customer hotline.

And it validated what people had been doing already - the idea of peeling the skin back from the chicken breast. The idea that people can eat fried chicken and have less fat than a Whopper was relevant to our customers.

Q: But weren't you playing it fast and loose with the commercials? A tiny disclaimer at the bottom of the ad said that KFC chicken is not a low-fat, low-sodium, low-cholesterol food. You can't have it both ways.

A: We don't believe we were. We stated the facts as they exist. Our message was not intended to say that this was a health food - but that it's better for you than you think. The campaign was a set of commercials that run three to four weeks. It went off as planned.

Q: Any plans to air it again?

A: We have no plans to run that same advertising. But our (nutritional) claims will continue to evolve around our new products. Our intent is never to mislead customers. We take seriously what our customers think.

WHO IS GREGG DEDRICK? Born: Binghamton, N.Y.

Years with Yum Brands: 10, most recently as executive V.P. of people and shared services.

First fast food memory: Raised on his mother's home cooking. Didn't eat fast food until he was a teen. Then I became a fast food junkie.

Favorite fast food: KFC Original Recipe Fried Chicken.

Family: Married to Shelley for 24 years. Daughters: Jessica 23; Jennifer, 21; and Michelle, 17.

Pets: Kip, a Maltese dog.

Hobbies: Boating, water-skiing, jet-skiing, church volunteer.

How Dedrick thinks he'll look after one year as KFC's president: " I'll look like all the (U.S.) presidents look after a year in office: more gray."

Q: You appear to have one of the toughest jobs in fast food.

A: Any time a brand is struggling to consistently grow sales, you know there are a lot of challenges facing you. But it is an exciting time to be at KFC. Besides, I've been through this before. I was at KFC in 1995 when the company was struggling. I was at Pizza Hut in 1997 when it was struggling. And I was at Taco Bell when it was struggling four years ago.

Sure, I have a lot of challenges. With fried chicken, the question is: How do you keep that vibrant and relevant at the same time you introduce new forms (of chicken)? Our DNA is chicken. Will this be easy or happen overnight? No.

Q: Same-store sales at KFC domestically have been lower - or stagnant - for 14 of the past 17 months. Why?

A: The customer is telling us: If you can give me better value, products that are better for me and an understanding that I can count on you, I'll come back more often. People tell me they love this brand.

Q: Will there someday be more KFCs in China than the USA?

A: We're the number one brand in awareness in China. We have more KFCs outside the U.S. than inside. Chicken is a protein that's accepted throughout the world. We will have aggressive growth outside the U.S. But we still see the U.S. as a growth opportunity.

Q: People for the Ethical Treatment of Animals says KFC has no comprehensive animal welfare program. Why not do what McDonald's, Burger King and Wendy's did and adopt one?

A: We helped set the industry standard. We don't believe PETA accurately represents all the points of view on the things we have done.

Q: Did you dump Jason Alexander as a spokesman because he sided with PETA?

A: We felt the Jason campaign had run its course.

Q: What's been your crystallizing moment as president?

A: I got an e-mail from a franchisee who said "good luck." At first, I thought it was cynical. But he meant it. "Our lives are in this brand," he said. "We are counting on you to help lead the way."

That crystallized the fact that this is more than rebuilding a corporate icon. This brand is about people. I realize that I affect all the franchisees and their families. The trust and responsibility I've been entrusted with I take very seriously.

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