【英语中国】食品安全危机考验肯德基中国掌门 KFC’s Crisis in China Tests Ingenuity of Man Who Built Brand

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2014-1-13 18:16

小艾摘要: Sam Su for years ran one of the highest-flying foreign business operations in China. These days, he's trying to pull it out of a tailspin.As China head for Yum Brands Inc. for the past 16 years, Mr. S ...
KFC's Crisis in China Tests Ingenuity of Man Who Built Brand
Sam Su for years ran one of the highest-flying foreign business operations in China. These days, he's trying to pull it out of a tailspin.

As China head for Yum Brands Inc. for the past 16 years, Mr. Su built its KFC arm into the biggest foreign restaurant chain -- and one of the most successful foreign brands -- in the world's most populous market. Yum has more than 6,000 restaurants in China, including Pizza Huts and other, smaller brands -- about three times as many as rival McDonald's Corp.

Mr. Su's efforts helped make China Yum's biggest source of profit, and earned him promotion to company vice chairman.

That achievement is under threat from a persistent public backlash over the reported use of growth hormones and antibiotics by two KFC chicken suppliers. The backlash is expected to push Yum's China annual same-store sales down for the first time at least since Yum started breaking out China in financial reports in 2005.

Yum is scheduled to report full-year numbers Monday, but same-store sales in China through November fell 16%.

More than a year into the crisis, Yum is still struggling. Now Mr. Su and Chief Executive David Novak say the Louisville, Ky., company can turn things around in 2014, vowing that new menu items and digital-media initiatives will revive the brand in China. 'I fully expect a strong comeback year,' Mr. Su said in a rare interview last month.

Some investors are getting restless. Yum's shares -- which had been propelled for years by its China growth -- are up only 12% since late November 2012, when Chinese state media started reporting on food-safety concerns surrounding KFC suppliers. The Dow Jones Industrial Average rose 26% in that period.

'If things don't turn around, he'll be gone,' said John Kornitzer, CEO of Kornitzer Capital Management Inc., which now holds more than 27,000 Yum shares, down from more than 92,000 a year ago. 'I'd give him a year or two.'

Yum's woes began with a Chinese media report in November 2012 alleging that a KFC supplier had been using growth hormones and antibiotics to help chickens grow faster. The claims, which quickly spread online, tapped into widespread consumer fright in China over food safety.

Government officials investigated, and recommended Yum strengthen its poultry-supply-chain practices, which Yum says it has done.

On top of the fears was a sense among some Chinese consumers that Yum had lost its allure. Yum executives acknowledge that they did too little in recent years to jazz up KFC's China menus, and that they misjudged how stubborn the food-safety concerns would be.

Mr. Su says an avian-flu outbreak last spring prolonged the sales slump.

'For several months, a lot of people stopped eating chicken and a lot of places stopped serving chicken. We were one of the few restaurants that still had chicken on the menu,' Mr. Su said of the avian-flu outbreak. 'That's one of the reasons we hadn't seen as quick a recovery as we would have liked.'

The crisis is testing the ingenuity and determination that current and former colleagues say helped make the 61-year-old Taiwan native a success since he joined Yum as a regional marketing director in 1989, when the chain operated four KFCs in China.

Don Mulligan, chief financial officer at General Mills Inc., noticed that Mr. Su was willing to challenge convention when the two worked together in the 1990s. At one point Mr. Su called the treasurer of PepsiCo Inc., then Yum's parent company, to question a calculation Pepsi had made about risk in China that would have limited Yum's ability to expand there.

'He won the day,' recalls Mr. Mulligan, who worked then in Pepsi's finance team in Hong Kong. 'It was very impressive. At the time he was much more junior in the Pepsi hierarchy.'

In 1997, the year Pepsi spun off Yum, Mr. Su was made the restaurant company's China president. To expand KFC, he enticed China's burgeoning middle class by pairing relatively inexpensive American-style chicken with Chinese additions to the menu like rice and soy milk.

For restaurant managers, Mr. Su -- who earned an M.B.A. from the University of Pennsylvania's Wharton School -- hired only college graduates. He required them to undergo four years of on-the-job training in a program Yum refers to as Whampoa Academy, named for the famed Chinese military academy.

He rewarded successful employees with an annual 'clock builder award,' inspired by the management book 'Built to Last,' about companies that succeed beyond the tenure of any single leader or product. Mr. Su gave winners a Rolex watch.

When employees came up short, he let them know. Around five years ago, Mr. Su saw that Chinese consumers were losing interest in Pizza Hut. 'What do Chinese diners really want?' he asked his marketing team at a strategy meeting. When some employees gave answers he deemed insufficiently thorough, Mr. Su reacted angrily, raising his voice and demanding immediate answers, recalled a person who worked with Mr. Su at the time.

He made the team develop dishes that would include everything from pasta to rice in order to please an entire Chinese family, and demanded that the food-innovation team refresh at least half the menu every year, this person said.

The Pizza Hut business has since rebounded in China, posting 5% same-store sales growth in the third quarter of last year.

Mr. Su's promotion to vice chairman in 2008 made him Yum's No. 2 leader -- an unusual status for a regional chief in a major multinational. Still, he and his wife, president of Gucci's China business, keep a low profile in China. He likes to play golf-often with Mr. Novak -- but says he spends most of his time working. He acknowledges that his style can seem harsh. 'I'm very serious -- a business first, brand first kind of person. Sometimes I'm not as sensitive,' Mr. Su said.

The current struggle is more vexing than previous stumbles. SARS in 2003 and an avian flu outbreak the following year hurt KFC sales. In 2005, KFC pulled several items from its menus after discovering that some of its chicken seasoning contained a carcinogenic dye.

Each time, Yum rebounded quickly and kept growing, eventually reaching nearly 1,000 Chinese cities. China sales rose 24% to $6.9 billion in 2012, and Mr. Su was Yum's highest compensated executive that year. He received a total of $16.6 million in 2012, compared with $14.2 million for Mr. Novak, the CEO.

Messrs. Su and Novak have given scant detail about their plans this year to revive KFC's China sales and modernize the brand. The company has already started some measures, such as an advertising and social-media blitz labeled 'I commit' in which employees and suppliers proclaim that KFC is safe.

'The pressure we put on ourselves exceeds anything we could ever get from any shareholder,' says Mr. Novak. 'But we do have a mind-set in this company that you have to earn the right to keep your job, and that starts with me and with Sam.'

'How 2014 will unfold, I don't know,' says Mr. Su. 'What I do know is we've done a lot of work.'

多年来,苏敬轼(Sam Su)经营的肯德基(KFC)中国业务一直是这个国家增长最快的外资企业之一。但现在他正努力将肯德基从螺旋式滑坡的困境中拯救出来。

过去16年中,中国业务一直在百胜餐饮集团(Yum Brands Inc., YUM)的业务中独占鳌头,苏敬轼也将肯德基建成了中国最大的外资连锁餐饮企业,以及在这个全球人口最多的市场最成功的外资品牌之一。包括必胜客(Pizza Huts)和其他较小的品牌在内,百胜在中国拥有超过6,000家餐厅,数量是对手麦当劳(McDonald's Co., MCD)的三倍左右。




危机已经持续了一年多,百胜仍在挣扎。苏敬轼和首席执行长戴维•诺瓦克(David Novak)称,这家位于肯塔基州路易斯维尔市的企业2014年能够扭转逆境,并称新菜式和数字媒体项目将在中国市场重振品牌。苏敬轼在上个月接受不多见的采访时称,他完全相信今年的形势将会大幅改善。


Kornitzer Capital Management首席执行长科尔尼采尔(John Kornitzer)说,如果情况无法好转,苏敬轼将走人。该公司目前持有逾27,000股百胜股票,低于一年前的逾92,000股。科尔尼采尔称,他愿意给苏敬轼一两年的时间。







通用磨坊(General Mills Inc., GIS)首席财务长穆里根(Don Mulligan)说,他与苏敬轼曾在20世纪90年代共过事,苏敬轼给他的印象是愿意挑战传统。曾经有一次苏敬轼打电话给当时百胜的母公司百事公司(PepsiCo Inc., PEP)的司库,质疑百事对中国风险的计算会限制百胜在中国市场扩张的能力。



拥有宾夕法尼亚大学(University of Pennsylvania)沃顿商学院(Wharton School) MBA学位的苏敬轼在招聘餐厅经理时,只选择大学毕业生。苏敬轼要求他们参加一项被百胜称作“黄埔军校”(Whampoa Academy)的四年在职培训计划。黄埔军校是中国历史上非常有名的一所军事院校。

受到企业管理书籍《基业长青》(Built to Last)的?发,他授予成功的雇员年度“造钟者奖”。苏敬轼奖励获得这一奖项的雇员一块劳力士手表。《基业长青》研究的是那些超越某个领袖或某个产品的一时辉煌而取得长久成功的企业。










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