Yum! Brands Q2: Taco Bell, KFC U.S. have new product momentum

2013-06-11

Yum! Brands continues its recovery from China's avian flu and poultry supply chain issues that befell the company during the first part of this year, but its U.S. and international businesses are both on a solid growth path.

The company's domestic business performed positively during the quarter, anchored by Taco Bell, which now contributes about half of the U.S. operating profit.

Taco Bell grew same-store sales by 2 percent in the quarter, on top of the 13-percent growth in the same quarter last year, which was driven by the Doritos Locos Tacos launch.

CEO David Novak said the Taco Bell franchise community is enthusiastic about the brand's Live Mas marketing campaign and new product platforms, including the Doritos Locos Tacos and the Cantina Bell line. Following the Nacho Cheese and Ranch Doritos Locos Tacos introductions will be the Flamas Locos Tacos, sometime later this year or early next year. The national breakfast launch is also planned for 2014.

President Richard Carucci said consumers have been driving the fast-paced Doritos introductions.

"As soon as we launched Nacho Cheese Doritos Locos Tacos, people were almost asking for Cool Ranch Doritos Locos Tacos. So we actually had to wait a little longer than we would have liked to, just because the demand was so great on the Nacho Cheese. We couldn't get the supply we needed to launch the Cool Ranch," he said.

Taco Bell is still evaluating the timing of the Flamas rollout, as well as potential follow ups to the "main three" flavors.

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