Sunday, July 22, 2007

When Canadian maniacs go trans-fat-free

The tactic might’ve been shrugged off as an oddity of the international market, like serving squid burgers or charging Morton’s prices for fast-food staples, if it wasn’t for the asterisk. But KFC’s Priszm franchisee operates in Canada, the United States’ fraternal twin in terms of culture. And the blunder is hardly alien to the Kentucky-based chain’s domestic operations, which made a similar move about three months ago. Now the U.S. home office can only hope for better long-term results in the motherland.

Because Priszm’s, as the operator acknowledged on Thursday, were discouraging indeed. The company posted a net loss of $1.9 million on a 4.2 percent sales decline. The results reflected the performance of the company’s 484 restaurants, including its Taco Bell, Pizza Hut and Long John Silver’s franchises. Yet the analysis centered on Priszm’s KFC holdings and the marketing tactic that president and chief operating officer Jeff O’Neil admitted pursuing “maniacally.”

For most of the second quarter, he and his team had trumpeted the chicken restaurants’ switch to trans-fat-free Canola oil, “to the detriment of everything else,” O’Neil reportedly said in a conference call with investors. “Our promotion did not gain the traction we hoped it would.”

No doubt those hopes are shared by KFC’s domestic operation. Like Priszm, it, too, decided to crow about changing the oil in its deep fryers to a variation with zero grams of trans fat. Around May 1, it started advertising the switch via television commercials and print spots, using the tagline, “The Bucket’s Back.” The ads were apparently intended to draw patrons who may have been put off by an unhealthy impression of the chain’s signature fried chicken.

“This gives us the ability to break through the clutter,” James O’Reilly, KFC’s chief marketing officer, told Nation’s Restaurant News marketing editor and fellow blogger Gregg Cebrzynski. “We have a very powerful message for consumers. When they see that message, they’ll think positively about the brand.”

He made no indication about pursuing the tactic maniacally, however.

KFC’s parent, Yum! Brands, has already posted results for the quarter in which the ads began, though the reporting period ended only six weeks after the campaign started. The company didn’t specify how KFC stores fared, but it noted that the comp sales for all its brands, considered as one operation, were flat.

KFC is the only one of Yum’s five North American brands that has advertised a change in its oil.

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