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Kentucky Fried Chicken KFC Corporation, doing business as KFC (an abbreviation of Kentucky Fried Chicken), is an American fast food restaurant chain specializing in fried chicken and chicken sandwiches. Headquartered in Louisville, Kentucky, it is the world's s ...
() is a
fast food restaurant A fast-food restaurant, also known as a quick-service restaurant (QSR) within the industry, is a specific type of restaurant that serves fast food, fast-food cuisine and has minimal Foodservice#Table service, table service. The food served ...
chain founded by Colonel Harland Sanders in North Corbin, Kentucky, in 1930. The first franchise opened in
Salt Lake City, Utah Salt Lake City, often shortened to Salt Lake or SLC, is the List of capitals in the United States, capital and List of cities and towns in Utah, most populous city of the U.S. state of Utah. It is the county seat of Salt Lake County, Utah, Salt ...
in 1952. KFC specializes in selling
fried chicken Fried chicken, also called Southern fried chicken, is a dish consisting of chicken pieces that have been coated with seasoned flour or batter and pan-fried, deep fried, pressure fried, or air fried. The breading adds a crisp coating or ...
. As of the end of March 2024, KFC operated over 10,000 outlets in around 2,000 cities across China. According to research by Millward Brown, KFC was the most powerful foreign brand in China in 2013.


Ownership

KFC was sold to Heublein in the 1970s and later sold to
PepsiCo PepsiCo, Inc. is an American multinational corporation, multinational food, snack, and beverage corporation headquartered in Harrison, New York, in the hamlet of Purchase, New York, Purchase. PepsiCo's business encompasses all aspects of the f ...
. It was then spun off, along with other fast food chains owned by the company, to become
Yum! Brands Yum! Brands, Inc. (sometimes called simply Yum!) is an American multinational fast food corporation. It is a spin-off of PepsiCo, after they acquired KFC, Pizza Hut, and Taco Bell. PepsiCo divested the brands in 1997, and these consolidated as ...
in 1997. KFC restaurants in China are owned or franchised by Yum China, a restaurant company that also owns the
Pizza Hut Pizza Hut, LLC is an American multinational pizza restaurant chain and international franchise founded in 1958 in Wichita, Kansas, by brothers Dan and Frank Carney. The chain, headquartered in Plano, Texas, operates 19,866 restaurants worldw ...
and
Taco Bell Taco Bell Corp. is an American multinational chain of fast food restaurants founded in 1962 by Glen Bell (1923–2010) in Downey, California. Taco Bell is a subsidiary of Yum! Brands, Inc. The restaurants serve a variety of Mexican-inspired ...
, chains in China and was spun off from
Yum! Brands Yum! Brands, Inc. (sometimes called simply Yum!) is an American multinational fast food corporation. It is a spin-off of PepsiCo, after they acquired KFC, Pizza Hut, and Taco Bell. PepsiCo divested the brands in 1997, and these consolidated as ...
in 2016.


History


Early days

KFC became the first Western fast food company in China after its inaugural outlet opened in Qianmen,
Beijing Beijing, Chinese postal romanization, previously romanized as Peking, is the capital city of China. With more than 22 million residents, it is the world's List of national capitals by population, most populous national capital city as well as ...
, in November 1987. It was China's introduction to franchising and grew rapidly. The operation was a joint venture, with a 60% stake held by KFC, 27% by the
Beijing Municipal Bureau of Culture Beijing Municipal Bureau of Culture and Tourism () is an agency of the Beijing Municipal People's Government which sets policies and laws relating to the arts and Chinese culture Chinese culture () is one of the Cradle of civilization#Anci ...
and 13% by Beijing Food Production. In early 1988,
Bank of China The Bank of China (BOC; ; Portuguese language, Portuguese: ''Banco da China'') is a state-owned Chinese Multinational corporation, multinational banking and financial services corporation headquartered in Beijing, Beijing, China. It is one of ...
took a 25% stake in the venture, and KFC's original stake was diluted to 51%. Warren Liu, a former vice-president of Tricon Global Restaurants (KFC's former parent company) argued that "being the first....has continued to provide KFC with a substantial competitive advantage." By 1988, the Beijing outlet had the highest volume sales of any KFC in the world.


Taiwan influence

Instead of hiring managers from America, KFC hired the managers from rising Asian economies such as
Taiwan Taiwan, officially the Republic of China (ROC), is a country in East Asia. The main geography of Taiwan, island of Taiwan, also known as ''Formosa'', lies between the East China Sea, East and South China Seas in the northwestern Pacific Ocea ...
. Existing Chinese distribution infrastructure was poor or non-existent, so KFC created its own to ensure quality standards. The founding leadership were known as "Taiwan Gang" because they were from Taiwan. The team was filled with veterans in the fast food industry with up to 10 years of experience before joining. They were knowledgeable of
Chinese culture Chinese culture () is one of the Cradle of civilization#Ancient China, world's earliest cultures, said to originate five thousand years ago. The culture prevails across a large geographical region in East Asia called the Sinosphere as a whole ...
and formed local partnerships to come up with localized menus and management practices despite being educated in the west. The chain had an early advantage against its Western fast food rivals, as fried chicken has been a staple Chinese dish since antiquity, whereas hamburgers were foreign and relatively unknown. Taiwanese businessman Tony Wang was hired by KFC in 1975 to work as a
business analyst A business analyst (BA) is a person who processes, interprets and documents business processes, products, services and software through analysis of data. The role of a business analyst is to ensure business efficiency increases through their kno ...
. Wang met with the mayor of Tianjin city, Li Ruihuan, and was asked to teach him how to start a fast food business. Wang used his newfound knowledge to successfully open his business in Tianjin, Orchid Food, and KFC became interested in having him lead the expansion of KFC in China. Although KFC had success with international expansion in
Southeast Asia Southeast Asia is the geographical United Nations geoscheme for Asia#South-eastern Asia, southeastern region of Asia, consisting of the regions that are situated south of China, east of the Indian subcontinent, and northwest of the Mainland Au ...
, they struggled to integrate into China. Wang's journey of expanding into China was riddled with problems. KFC was stuck with using chilled chicken since they did not have a transport system for the chicken. China's salt was coarse-grained, but KFC uses fine-grain salt, requiring imports. According to Wang, In addition to ingredients, "skilled labor was hard to find and training the staff was very tedious". Wang was able to open 5 outlets by the time he left KFC in 1990. KFC and Pizza Hut Taiwan operations are managed by
Jardine Matheson Jardine Matheson Holdings Limited (also known as Jardines) is a Hong Kong–based, Bermuda-domiciled British multinational conglomerate. It has a primary listing on the London Stock Exchange and secondary listings on the Singapore Exchange ...
’s Jardine Restaurant Group.


Rapid expansion

By 1994, there were 28 KFC outlets in China, including seven in Beijing. By 1997, there were 100 outlets. In 1999, two KFC stores in
Changsha Changsha is the capital of Hunan, China. It is the 15th most populous city in China with a population of 10,513,100, the Central China#Cities with urban area over one million in population, third-most populous city in Central China, and the ...
were wrecked by crowds protesting the United States bombing of the Chinese embassy in Belgrade. By 2007, there were 2,000 outlets in 240 cities. KFC began to expand North and West into China and also in the central region. Eventually, it gained operations in all of China's provinces except for Tibet.
In 2008, CEO David Novak announced plans to open more than 20,000 restaurants in China, saying: "We're in the first innings of a nine-innings ball game in China." At the beginning of 2008, the chain added its first Chinese
street food Street food is food sold by a Hawker (trade), hawker or vendor on a street or at another public place, such as a market, fair, or park. It is often sold from a portable food booth, food cart, or food truck and is meant for immediate consumption ...
snack to its menu, the
youtiao ''Youtiao'' (), known in Southern China as yu char kway, is a long golden-brown deep-fried strip of wheat flour dough of Chinese cuisine, Chinese origin and (by a variety of other names) also popular in other East Asia, East and Southeast Asia ...
. The street snack menu was expanded in 2010 with the addition of the
shaobing Shaobing ( zh, p=shāobǐng, w=shao-ping), also called huoshao, is a type of baked, unleavened, layered flatbread in northern Chinese cuisine. Shaobing can be made with or without stuffing, and with or without sesame on top. Shaobing contains a ...
. In August 2010, KFC China announced its biggest product launch to date: the Rice Bowl, which heralded the arrival of rice as an accompaniment across the chain.


2005 Sudan I incident

In 2005,
Sudan I Sudan I (also known as CI Solvent Yellow 14 or Solvent Orange R) is an organic compound typically classified as an azo dye. It is an orange-red solid, used to color waxes, oils, petrol, solvents, and polishes. Historically, Sudan I used to serve ...
(organic compound) was found in the spice pickle powder used in some KFC menu items. Affected items included spiced drumsticks, spiced chicken wings, popcorn chicken, and the "New Orleans Roasted Chicken". The discovery was made by quality inspection authorities in Zhejiang Province. Sudan I is an industrial dye used for coloring solvents, oil waxes, as well as shoes and floor polishes. It is not safe for use in foods because it increases the risk of cancer. The discovery led to the ban of all flavoring products made by Heinz-Meiweiyuan Food Co.


2012–2014 supply issues

In December 2012, KFC faced allegations that some of its suppliers injected
antiviral drug Antiviral drugs are a class of medication used for treating viral infections. Most antivirals target specific viruses, while a broad-spectrum antiviral is effective against a wide range of viruses. Antiviral drugs are a class of antimicrobials ...
s and
growth hormone Growth hormone (GH) or somatotropin, also known as human growth hormone (hGH or HGH) in its human form, is a peptide hormone that stimulates growth, cell reproduction, and cell regeneration in humans and other animals. It is thus important in ...
s into poultry in ways that violated food safety regulations. After this, the chain severed its relationship with 100 suppliers and agreed to "actively co-operate" with a government investigation into its use of antibiotics. KFC China sales in January 2013 were down 41% against the previous year. In May 2013, ''
Businessweek ''Bloomberg Businessweek'', previously known as ''BusinessWeek'' (and before that ''Business Week'' and ''The Business Week''), is an American monthly business magazine published 12 times a year. The magazine debuted in New York City in Septembe ...
'' speculated that KFC may be "losing its touch" in China. Sales continued to decline throughout 2013, albeit with a slower rate of decline than analysts estimated. Leslie Patton of ''Businessweek'' highlighted increased competition in the fast food category from competitors. To counter sluggish sales, the menu was revamped in 2014. In April 2014, Yum announced that first-quarter KFC sales had risen by 11% in China, following a 15% fall in 2013. In July 2014, Chinese authorities closed down the
Shanghai Shanghai, Shanghainese: , Standard Chinese pronunciation: is a direct-administered municipality and the most populous urban area in China. The city is located on the Chinese shoreline on the southern estuary of the Yangtze River, with the ...
operations of the OSI Group, amidst allegations that it had supplied KFC with expired meat. Yum immediately terminated its contract with the supplier and stated that the revelation had led to a "significant ndnegative" decline in sales.


Since 2016

Following the 2016 result of the
South China Sea arbitration The South China Sea Arbitration (Philippines v. China, PCA case number 2013–19) was an arbitration case brought by the Republic of the Philippines against the People's Republic of China (PRC) under Annex VII (subject to Part XV) of the Unit ...
, KFC restaurants in Chinese cities became locations for public protests. Protestors denounced what they viewed as United States interference in China's sovereignty issues. Viewing KFC as symbolic of American presence in China, the protestors called for a boycott of the restaurant chain.


Impact in China

When KFC first arrived in China, it was not visited very frequently, but now the chain plays a crucial role in urban life. China's advertising market started growing significantly during the 1980s. With the growth of the ad market, brand names became a staple in China, increasing the recognition of large chains such as KFC. Television advertising helped spread brand recognition to even remote regions. KFC has been credited with assisting
globalization Globalization is the process of increasing interdependence and integration among the economies, markets, societies, and cultures of different countries worldwide. This is made possible by the reduction of barriers to international trade, th ...
in China. The first KFC restaurants to open in China were considered a novelty, and attracted customers with an inspirational "Western lifestyle". China was also becoming more accepting of Western influences during this era. In turn, KFC competes against domestic rivals by offering an extended menu with localized food options. KFC claims it invented the New Orleans-Style Chicken Wings recipe in 2004, a local invention that became a common dish in Chinese restaurants and is known nationally in China. The specific marinade is sold by the seasoning companies, such as McCormick and
Tyson Foods Tyson Foods, Inc. is an American multinational corporation based in Springdale, Arkansas that operates in the food industry. The company is the world's second-largest processor and marketer of broiler industry, chicken, beef, and pork after JBS ...
, in the Chinese region.


McDonald's versus KFC

KFC and
McDonald's McDonald's Corporation, doing business as McDonald's, is an American Multinational corporation, multinational fast food chain store, chain. As of 2024, it is the second largest by number of locations in the world, behind only the Chinese ch ...
were the first American fast food companies to enter China during the 1980s, after foreign investments became more widely accepted under the economic reforms of
Deng Xiaoping Deng Xiaoping also Romanization of Chinese, romanised as Teng Hsiao-p'ing; born Xiansheng (). (22 August 190419 February 1997) was a Chinese statesman, revolutionary, and political theorist who served as the paramount leader of the People's R ...
. McDonald's entered China in 1990, three years after KFC. Similarly to KFC, it adopted a joint venture with a state-owned enterprise, the Beijing Corporation of Farming Industry and Commerce. In 2006, China had the largest market of fast food consumers, with McDonald's and KFC together claiming over 90% of the market share. McDonald's aimed to make customers feel at home with their slogan, "Get together at McDonald’s; enjoy the happiness of family life". Despite a similar slogan working in the US, it failed to attract Chinese customers. Instead, KFC adopted traditional Chinese themes in their commercials. In China,
McDonald's McDonald's Corporation, doing business as McDonald's, is an American Multinational corporation, multinational fast food chain store, chain. As of 2024, it is the second largest by number of locations in the world, behind only the Chinese ch ...
is typically associated with western food, while KFC is considered more locally adapted. The two brands adopted different marketing strategies, with McDonald's appealing to modern tastes and purposely maintaining a foreign feel, and KFC adapting to local tastes and adapting to Chinese culture.


Operations

The Zinger burger is the highest selling menu item. KFC has adapted its menu to suit local tastes, with items such as rice
congee Congee ( , derived from Tamil language, Tamil ), is a form of savoury rice porridge made by boiling rice in a large amount of water until the rice softens. Depending on rice–water ratio, the thickness of congee varies from a Western oatmeal ...
, egg custard tarts and tree fungus salad, with an average of 50 different menu items per store. Another item is the Dragon Twister, a wrap that includes fried chicken, cucumbers,
scallion Scallions (also known as green onions and spring onions) are edible vegetables of various species in the genus ''Allium''. Scallions generally have a milder taste than most onions. Their close relatives include garlic, shallots, leeks, chive ...
s, and duck sauce, similar in preparation to Peking duck. Chinese outlets are typically two to three times larger than American and European outlets; many are open 24 hours a day and provide home delivery, and two new menu items are released each month. 78% of Chinese sites are company-owned, compared to 11% internationally.


References


Further reading

* Warren Liu. ''KFC: Secret Recipe for Success''. Wiley. September 26, 2008.


External links

* Drewery, Hayden (
University of North Florida The University of North Florida (UNF) is a public university, public research university in Jacksonville, Florida, United States. It is part of the State University System of Florida and is accredited by the Commission on Colleges of the Southern ...
).
West Meets East: KFC and Its Success in China
" ''Armstrong Undergraduate Journal of History'',
Armstrong State University Armstrong may refer to: Places * Armstrong Creek (disambiguation), various places * Armstrong River (disambiguation), various rivers Antarctica * Armstrong Reef, Biscoe Islands Argentina * Armstrong, Santa Fe Australia * Armstrong, Victor ...
. {{KFC 1987 introductions 1987 establishments in China Fast-food chains of China
China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...