Image: Grilled chicken at KFC
Darron Cummings  /  AP
KFC hopes grilled chicken will lure back health-conscious consumers who dropped fried chicken from their diets, or cut back on indulging.
updated 3/23/2008 3:13:34 PM ET 2008-03-23T19:13:34

What in the name of Colonel Harland Sanders is going on at KFC? The chain built by his secret recipe for fried chicken is about to give equal billing to, gulp, grilled chicken.

Kentucky Fried Chicken customers will be greeted eventually by lighted "Now Grilling" signs, starting in coming weeks in select U.S. cities. Storefront signs will be altered to promote the new product — called Kentucky Grilled Chicken. Even the brand's ubiquitous chicken buckets will get a makeover.

"This is transformational for our brand," said Doug Hasselo, KFC's chief food innovation officer.

Louisville-based KFC, a subsidiary of Yum Brands Inc., hopes grilled chicken will lure back health-conscious consumers who dropped fried chicken from their diets, or cut back on indulging. KFC announced last year that fried chicken at all its U.S. restaurants had zero grams of trans fat per serving after the chain switched cooking oils.

KFC says the grilled chicken has significantly fewer calories and fat, plus much less sodium, than its Original Recipe fried chicken that launched the brand more than a half-century ago.

The chain says it now serves some 12 million customers daily at more than 14,000 outlets around the world.

The grilled product, served on the bone, is being tested in six cities — Indianapolis, Colorado Springs, San Diego, Oklahoma City, Jacksonville, Fla., and Austin, Texas. A national rollout is planned early next year.

The company says prices for grilled and fried chicken will be comparable. Even while planning a big marketing push for grilled chicken, KFC executives insist the chain is not backing away from its most famous product. New fried chicken items are planned this summer.

Larry Miller, a restaurant analyst with RBC Capital Markets, said the chain faces a possible "speed bump" in winning over health-savvy consumers. But if grilled chicken becomes a hit, it could boost KFC's U.S. performance, which has lagged behind its burgeoning China business in sales and profit growth, Miller said.

Last year, Yum had 30 percent operating profit growth in its China division, where KFC is a dominant fast-food brand, while U.S. operations had a 3 percent decline. Yum's other chains include Taco Bell, Pizza Hut, Long John Silver's and A&W All-American Food Restaurants.

"If they can get people over the hump — which is `Do I believe KFC can sell me a healthy alternative' — they'll increase their (customer) frequency," Miller said. "I don't see too much risk in trying it."

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By expanding into grilled chicken, the chain hopes to build on its core dinner business and strengthen lunch and snack segments, said KFC President Gregg Dedrick.

KFC has flirted with non-fried chicken before, but each initiative flopped.

In the early 1990s, the chain introduced a rotisserie-style chicken, but it was doomed after a couple of years by equipment problems and long cook times. A tender roast product followed, but it lasted only a couple of years.

KFC executives say the company has solved operational problems with a new oven that grills a batch of chicken in just over 20 minutes.

"We think we finally have cracked the code," Hasselo said.

Jayne Hurley, senior nutritionist with the Center for Science in the Public Interest, a Washington-based advocate for nutrition and health, said KFC deserves credit but the chain lagged behind competitors.

"KFC has sort of been missing in action for healthier options," she said.

The grilled chicken easily beats KFC Original Recipe fried chicken in calories, fat and sodium, but Hurley warned a grilled chicken breast contains 600 milligrams of sodium, slightly more than a third of what someone 50 years or older should consume daily. By contrast, an Original Recipe fried chicken breast has 1,020 milligrams.

Still, there's likely more on a plate than just KFC chicken. Hurley said she'd like to see KFC offer healthier side dishes as an alternative to such standards as macaroni and cheese and mashed potatoes and gravy.

"Just because you're getting grilled chicken doesn't mean you can just chow down on biscuits," she said.

KFC says some of its restaurants offer salads.

In promoting the new grilled product, KFC plans to change "Kentucky Fried Chicken" storefront signs to add grilled to the name. Chicken buckets will still feature KFC founder Harland Sanders but will get a redesign to promote fried and grilled chicken.

Still, Hasselo acknowledged that changing perceptions about KFC won't happen overnight.

"With Kentucky Fried Chicken being part of your name, trying to get people to understand that you have these non-fried options available now — it's not an uphill battle but it's certainly something we have to work on and make sure we communicate well," he said.

Brian Shinn, in charge of operations at 13 Colorado Springs KFC stores part of the grilled chicken test, said some KFC franchisees have been frustrated with the chain for not rolling out non-fried items sooner.

"When we saw everything going healthy, we needed to jump on sooner," Shinn said.

"We have to play catch up now," he added.

KFC has been testing Kentucky Grilled Chicken for about 2 1/2 years, and even the chain's president admitted he's been anxious at times about the wait.

"You might say, `What took us so long,'" Dedrick said. "I've asked that question a couple times myself. The answer is we had to get it right."

In Colorado Springs, grilled chicken sales had a robust start 2 1/2 years ago, backed by television advertising, Shinn said. TV spots promoting grilled chicken ended about a year and a half ago, and since then sales for the product "have not been where we wanted to be," he said.

Now KFC plans a series of TV ads promoting grilled chicken in test markets, including a spot featuring Dedrick and workers adding grilled to a storefront name.

Shinn said the company seems committed to grilled chicken, and said he's optimistic that KFC has finally come up with a lasting non-fried chicken winner.

"We need to have it," he said. "We need to make it work."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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