During a presentation at Bernstein 39th At Thursday’s annual strategic decision-making meeting, Yum Brands CEO David Gibbs reiterated how the company’s massive global scale creates a key advantage. One of his advantages lies in the company’s ability to seek out and acquire technology companies and make their proprietary systems available to franchisees at low cost.
“We can do a lot of small business acquisitions, and then we can expand that technology in our system. We can’t do that because many restaurants don’t have the capacity to scale, so this environment is poised for us to be a leader in our unique offerings, the advancement of technology in the restaurant industry.” Mr Gibbs said.
In fact, this is also the case with Dragontail, which Yam acquired in September 2021. The system leverages AI to automate kitchen flow and optimize pick-up and delivery times. This is also the case for Kvantum, which Yam acquired in March 2021 to bolster the company’s ability to make “data-driven marketing decisions,” including marketing spend. Essentially, Kvantum develops algorithms and AI models that enable brands to understand consumer behavior. And this is also the case with Tictuk, which Yum acquired in March 2021 to integrate conversational commerce through social media and messaging channels such as WhatsApp, SMS and Facebook Messenger.
Executives have repeatedly shared the benefits of these technologies at recent earnings calls and conferences. For example, during Yum’s first quarter earnings release, CFO Chris Turner said that KFC and Pizza Hut restaurants that have implemented Dragontail so far have consistently “improved product quality and customer satisfaction scores.” said to have experienced
“[Customers] Pizza is getting hotter and fresher,” he said.
In the fourth quarter, Turner said the Tiktuk rollout was proving to be “more customers and more digital sales.”
“This is evidenced by the launch of chat ordering at KFC in Mexico, where over 90% of users Users transacted on the chat channel had never placed a digital order on any other channel before,” he said.
One of Yum’s lesser-known acquisitions, likely because it dates back to 2015, is Collider Lab, which offers “culture-based consumer insights.” Consulting company. On Thursday, all eyes were on Collider again as Gibbs called it a “proven game-changer” for Yum Brands.
“Collider is one of the secrets we talk about, but people don’t quite get it. It was,” Gibbs said. “They identified where the gaps were in us, what we were doing in terms of bringing the brand to life in our marketing programs, redirected the brand and, you guessed it, the business You can gain insight on that part of the brand and going on a slightly different trajectory can make a big difference between success or failure. It was a home run.”
what’s next?
So, now that Yum has found a strong pace of technology acquisitions neatly embedded in its own mammoth system, what’s next? Focused.
“There are a lot of changes to come, and we expect to be at the forefront of them,” he said. “We haven’t talked much about what robotics and automation can do, but the benefits of robotics are that humans are given more interesting jobs, and restaurants are more efficient. It’s obviously a big part of this journey.”
Gibbs also said AI is “a big plus for the industry,” and believes it could be especially true for Yum. Yum says he is leveraging AI technology and video to ensure order accuracy, for example, and improve product quality, and is also considering voice AI.
“It’s no secret that we use humans and their voices to process many of our orders. Voice AI in places like drive-thru and phone orders can improve unit economics for franchisees and efficiency for restaurants. It can have a huge impact,” Gibbs said. “AI is going to change the way we run our businesses.
Please contact Alicia Kelso. [email protected]
