Two recent articles written by cbsnews and Bloomberg discuss KFC’s intentions of launching a campaign to rebuild its brand in China. The campaign follows December allegations that a former chicken supplier was found to supply meat with high levels of antibiotics to Chinese chains. YUM Brands Inc., which owns the company, has promised to enforce a more strict level of monitoring and managing of suppliers based on a principle of “zero tolerance in food safety.” Even though the complaints against KFC are less serious than other Chinese product scandals from the past decade, the controversy has damaged the foreign company’s image in China.
KFC, which is the largest fast-food chain in China with 4,000 outlets, has estimated that sales will fall by 25 percent in the current quarter after falling 6 percent in the fourth quarter of 2012. This estimated fall in sales is particularly significant as 44 percent of the company’s sales revenue was generated from Chinese chains in 2011. As part of the rebuilding campaign, KFC has eliminated 1,000 small producers that supplied chicken to Chinese chains. Furthermore, KFC has planned to develop 700 new locations this year outside of Beijing, Shanghai, Guangzhou, and Shenzhen in areas with higher potential for future growth.