KFC To Have Bird Flu Commercials On The Ready
KFC to have bird flu commercials on the ready
In event of outbreak, chain will be prepared to ease customers' fears
http://www.msnbc.msn.com/id/9971549
Updated: 7:08 p.m. ET Nov. 8, 2005
LOUISVILLE, Ky. - In coming days, KFC will have television commercials ready to reassure customers that its chicken is safe to eat in the event of a bird flu outbreak.
The chicken chain said Tuesday it hopes the spots never have to air, but it’s taking no chances in the face of a potential threat to business.
“We’ll keep them on the shelf and hope not to use them,” Jonathan Blum, spokesman for KFC’s parent, Yum Brands Inc., said of the spots expected to be shot soon.
Kentucky Fried Chicken and its parent, both based in Louisville, have spent months making plans to respond quickly in case of bird flu outbreaks in its markets worldwide. Executives have discussed the topic with government officials and outside health experts.
“We’re keeping our fingers on the pulse of what happens day in and day out around the world,” Blum said. “And we are taking action in terms of preparing for this in the event it becomes an eventuality in any market.”
The ad campaign would be ready to air wherever an outbreak occurred.
National Chicken Council spokesman Richard Lobb called KFC’s decision to have standby ads “wise and prudent,” but insisted there is no reason for concern of an outbreak in this country. The United States will produce 9.5 billion birds this year and does not import any poultry from countries affected by the avian flu, he said.
Currently, the virus is hard for people to catch, and most deaths have been linked to human handling of infected poultry. Vietnam, the country hit hardest by bird flu, on Tuesday reported its 42nd human death. World health experts warn, however, the virus could mutate into a form that’s easily passed from person to person, possibly sparking a global outbreak.
“The message is to reassure consumers that eating cooked chicken is perfectly safe,” Blum said. “As our investors would hope, we are being proactive in preparing the materials in the event that we need to use them.”
Monday, Yum reported that KFC sales in October were up 6 percent in the United States, where the company has detected no consumer backlash from media reports on concerns about bird flu. In recent months, KFC has shaken off a slump and taken an upward trajectory amid the success of its 99-cent Snacker sandwich and variety chicken bucket.
In China, where KFC recently opened its 1,500th restaurant, Yum posted sharply lower sales growth in October. Yum has Pizza Hut restaurants in China, but the bulk of sales come from KFC.
Sales rose by 8 percent in the China division, compared with 24 percent growth a year ago. Blum attributed the slowdown to a disappointing promotion for a crispy chicken steak product.
“It’s too early to tell whether or not the bird flu has had any impact on our business in China,” Blum said.
Industry analyst Larry Miller of Prudential Equity Group also cited the weak product promotion for lower-than-expected China results. But in his response to October sales, he also wrote, “Headlines from the avian flu situation continue to weigh on overall consumer sentiment towards chicken in China.”
KFC’s China sales slumped earlier in the year after concerns about a seasoning used in select products that contained a dye unapproved for human consumption. The company destroyed the products and seasonings that sparked the concerns.
Meanwhile, Yum chairman and chief executive David Novak was upbeat in Yum’s October sales report, predicting the company would yet again post double-digit growth in earnings per share in 2006 on the strength of international expansion and strong U.S. same-store sales growth.
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