Yum! Brands
Build Leading Brands
Across China:
Joaquin Pelaez
裴华庆
Yum! Brands China Division
百胜餐饮集团中国事业部
Spun off from
Pepsi in 1997
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 The largest restaurant
company in the world in
terms of restaurant units
 37,000 stores
 1 million employees
 Over 110 countries
Rapid Growth
Yum!Restaurants
China Mature
Steady
Growth
Yum!
Growth
High
Return
Yum! U.S. Division
Highly Franchised
International
Refranchising
Yum Has a Powerful
Global Portfolio
2
China-First of YUM’s
Four Key Strategies
Leading Brands
1. Build
Across China in Every
Significant Category
Aggressive
2. Drive
Expansion and Build
Our Brands in
International Markets
Improve U.S.
3. Dramatically
Brand Positions,
Consistency and Returns
Industry-Leading,
4. Drive
Long-Term Shareholder
and Franchisee Returns
China Business
 Fastest growing geography in Yum
 Sales: USD $5.0 Billion (2010)
 Contributes 38% to Yum’s global profits
(2010)
 Over 500 suppliers and with very few
exceptions everything is locally sourced
 Over USD 1.9 Billion food material
purchase in China
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Yum! China . . .
well positioned
Build Shareholder Value
 Portfolio of winning brands
 Long-term competitive
advantage, getting stronger
Unit
Growth
SSSG
High
Returns
China - A Big Growth Opportunity
for Restaurant Industry
 GDP/Personal income growth among top in the world
 Over 18 million people enter cities each year
 Restaurant chain market share low (in contrast to U.S.)
 High purchase intent for western brands
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Big Opportunity
Deserves a Big Goal
“To become the best
restaurant company
not only in China but
the world”
---- Yum Restaurants China Team
Mission Statement
At Pepsi spin-off (October 1997)
Building A Unique Portfolio
YUM! China
Restaurant Categories
QSR
Casual
Dining
Delivery
QSR
Chinese
East Dawning
1987
1990
2001
2005
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Strong Profit Growth . . .
~38% of
Yum! profits
Yum China Operating Profit
($ million)
. . .Driven By Significant
and Profitable Unit Growth
504 509 507
Mainland China
New Restaurant Openings
Another
500+ Year
471
353
378 364
262 268
174
89
’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 '09 '10
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KFC: the Leading QSR
Brand by Wide Margin
 In over 650 cities
 Unmatched reach & frequency, yet
plenty of room for growth
 Increasing brand development rate
 KFC as well positioned in China as
McDonald’s was in the U.S.

Strong unit economics enable expansion
Widening the Gap
3,246
Mainland China
Western QSR # of Restaurants
1,300
976
565
'03
‘10
7
KFC
Shanghai
KFC DT1
8
KFC interior
KFC DT2
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Brand Ready to
Grow Even Bigger
 Multiple proteins
 Multiple day-parts
 Delivery
 Community
involvement
KFC
Beef
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KFC
Shrimp Burger
Brand Ready to
Grow Even Bigger
 Multiple proteins
 Multiple day-parts
 Delivery
 Community
involvement
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KFC
Purple Rice
Congee
KFC
Sesame Cake
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KFC
Dough Stick
KFC
Soy Milk
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KFC
Egg Tart
Regular
KFC
Egg Tart
Blueberry
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KFC
Sweet
Dough Stick
KFC
Popcorn
Chicken
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KFC
Beverage Innovation
Brand Ready to
Grow Even Bigger
 Multiple proteins
 Multiple day-parts
 Delivery
 Community
involvement
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Brand Ready to
Grow Even Bigger
Multiple proteins
Multiple day-parts
Delivery
Community
involvement
KFC
3 on 3 – basketball
It is bigger than
US little league!
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KFC
Campus Aerobics
Competition
How does KFC differ
from KFC in America?
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KFC China:
It is Chinese in taste, lots of
variety and makes a
commitment to food safety.
It fits the lifestyle of the
Chinese consumer.
A disciplined
growth-oriented culture
 Strong focus in store level
execution excellence
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A disciplined
growth-oriented culture

Disciplined innovation
in new products
KFC
New Orleans
Roasted Chicken
Burger
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KFC
New Orleans
Roasted Chicken
Pizza Hut, Dual Channels
Brand Building
Home Delivery Brand
Casual Dining Brand
More than just pizza, a unique western
casual dining experience
Best delivery brand
with everyday affordable value
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Pizza Hut the Leader in
Casual Dining
Mainland China Restaurants
522
95
’02
'10
Pizza Hut the Leader in
Casual Dining
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 120+ units
 Expanded menu
Pizza Hut
Delivery an
Emerging
Growth Brand
 Strong SSS growth
 Growing category
 Entering new cities
East Drawing
New Growth
Brand –
Chinese QSR
 20+ units
 On TV in Shanghai
 Strong transaction growth
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27.2% ownership of
Little Sheep
A Strategic
Partnership
 Leading Brand in Chinese
―Hot Pot‖
 460+ units today in China
Philanthropy/
Community Programs
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 First Light Foundation
 1st Phase: (2002 – 2012)
Four year scholarship plus
work experience in KFC
stores
A total donation of RMB
38,000,000 ($5.6million) and
7,000 recipients
nd
 2 Phase: (2009 – 2016)
A total donation of RMB
40,000,000 ($5.9million) and
8,000 recipients
 Public Donation
Campaign –―Nutrition for
Needy Mountain Kids‖




Part of Yum global ―World
Hunger Relieve‖ program
Raised over RMB10,000,000
($1.5milliion) in past two
years
Provide 11,000 children with
one year daily nutrition
enhancement food
6,500,000 consumers
participated in the donation
campaign
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 College Student
Environmental
Protection Award

Providing financial
support to outstanding
environmental protection
projects developed by
college students
A disciplined
growth-oriented culture
 All the people are trained on a few core of programs that
embody or values and principles:
 7 Habits
 ABR training
 Making better decisions
 The individual success of our people is viewed as the success
of the team, therefore good times and not so good times are
shared by everyone
 A very strong feeling of being part of something bigger that Yum
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A disciplined
growth-oriented culture

Fact based quest for knowledge
A disciplined
growth-oriented culture

Break-through &
risk taking mindset
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A disciplined
growth-oriented culture

Crisis-like sense of urgency
Localize,
Localize,
Localize




Localize tastes and menu offer
Localize supply chain and distribution
Local business partnerships
Localized management and talent
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World-class infrastructure and longterm competitive advantage
Unmatched
Food Innovation
Capabilities
Highly Developed
Supply Chain
Management
Unequaled
Talent &
Experience
World Class
Distribution
Business
Self owned
Logistic Network
58
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State of the Art Logistic Centers

11 Logistics Centers (LC)
 5 Satellite Logistics Centers (SLC)

1 Consolidation Center (East China)
 We are building Consolidation Centers in
Beijing and Guangzhou
Delivery to > 3000 Restaurants and Receiving from > 500 Suppliers
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A Huge Opportunity
— Best growth market of 21st Century —
China Population
Urban 600 million
Total
1.3 billion
U.S. Total Population
300 million
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What Do Companies need to
learn before they come to China?
Understand the competitive landscape
WHO? HOW? WHERE?
What Do Companies need to
learn before they come to China?
Understand the culture differences
and ways of doing business
What makes it in the
West or in other
countries may not
work in China
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What Do Companies need to
learn before they come to China?
Have a competitive
and proven business model
Whatever model makes it in
other countries, may not prove
competitive in the China
environment
What Do
Companies need to
learn before they
come to China?
Localize as much you can
Management, Employees,
Raw materials, Insights etc.
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What Do Companies need to learn
before they come to China?
Fully understand your consumer
and consumer base
What Do Companies
need to learn before
they come to
China?
The China consumer
demand innovation and
rapid change, be
prepared to invest on
innovation and to adapt
to a relentless pace to
keep up with the market
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谢 谢！
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