Pizza Hut 2006 Annual Report Download - page 17

We’re focused on one thing: building
category-leading brands. Each of our
brands has tremendous heritage and
great strengths and we’re making them
even more powerful by building greater
relevance, energy and differentiation for
our customers. We’re not only leading
the industry in innovation but we’re also
accelerating that innovation by sharing
best practices throughout our system.
In 2006, we drove steady progress in our
domestic business with 3% growth in oper-
ating profit*, while generating $1 billion in
operating cash flow.
With over 18,000 company and franchised
restaurants in the U.S., we’re focused on
constantly improving upon our brand
positions and returns. Overall, we have
the leaders in place to drive sustainable
sales and profit performance in our U.S.
business, and we’re working hard to
bring our brand essence to life for our
customers in every restaurant, every
transaction, every day.
Emil Brolick
President U.S.
Brand Building,
Yum! Brands
Taco Bell is a brand Where Left of Center Feels
Right. 2006 marked our fifth consecutive year of
positive same store sales growth, and it’s largely
due to our unique People, Products, Promotions
and Processes.
We encourage our people to let their personalities shine
through, and it’s great to see so many Restaurant General
Managers (RGMs) inspiring their teams to success in their
own special style.
Our food also continues to be uniquely Taco Bell. The innovative
Crunchwrap Supreme® permanently joined our existing line-up
of Mexican-inspired products, like our delicious Grilled Stuft
Burritos, signature Quesadillas and wide-variety of Big Bell
Value Menu® items. And we’re very excited about our recent
offering of Steak Grilled Taquitos— just one of the many new
THINK OUTSIDE THE BUN® products for 2007.
We’re also continuing to THINK OUTSIDE THE BUN® with cre-
ative promotions. In 2006, we launched Taco Bell’s twist
on Late Night —Fourthmeal — the meal between dinner and
breakfast. To drive the success of this important day part,
we integrated in-restaurant merchandising, website commu-
nications, television and online advertising.
Having fun and delighting customers is very important at Taco
Bell. We’re equally committed to improving our One System
Operating Platform, which is a key enabler to our RGMs and
their teams, driving more consistent execution and even greater
Customer Mania.
By continuing to THINK OUTSIDE THE BUN® and innovate
around our People, Products, Promotions and Processes,
we’ll drive Customer Mania in 2007 and achieve beat year-
ago results.
Taco Bell…Where Left of Center Feels Right!
Greg Creed
President and
Chief Concept Officer,
Taco Bell
2006 was a year of repositioning at Pizza Hut. Much of
the year, our team worked to identify critical customer
issues and opportunities. We retuned the way we inno-
vate new products. And we drove home the principles
of Yum! Insight Marketing, to set up stronger results
for 2007 and beyond.
We had some bright spots with the introduction of two very suc-
cessful new products. The first — Cheesy Bites Pizza®— is the
latest in our tradition of innovating pizza products that customers
can’t get anywhere else! And in the fall of 2006, we launched the
very successful Sicilian Lasagna Pizza. It brought America’s favor-
ite pasta flavors together, but…on a pizza!
We’ve really grown our WingStreet brand, recently opening our
1,000th unit. We taste great—WingStreet won first place in the
Best Traditional Medium Wing Sauce category in the annual National
Buffalo Wing Festival! And in 2006, we developed and successfully
tested a dine-in co-branded facility that will allow us to sell WingStreet
in many of our dine-in Pizza Hut restaurants. We’re already the
biggest wing brand and over the next several years, we plan to take
WingStreet into a dominating national presence.
And we made it easier for customers to order, by retooling and
expanding our ability to take Internet orders. 2007 will be the first
year that all Pizza Huts that deliver —almost 5,000 units— will be
able to provide Internet service.
Most important, we began the work to become the best in the
Pizza Category at satisfying our customers’ needs. Our operators
are totally focused on what customers tell us they want from their
favorite pizza company—no-hassle ordering, and pizzas that are
delivered hot, fresh, and when customers want them.
I am proud of the work we did to lay the foundation for 2007. We’ll
continue to execute against our game plan with our new brand
positioning: We are, after all, America’s Favorite Pizza — we give
you more of everything you love about pizza!
Scott Bergren
President and
Chief Concept Officer,
Pizza Hut
For more than 50 years, our purpose has remained
the same — to make great meals so our custom-
ers don’t have to— but in a way that’s relevant to
them today.
Take mom, for example. We have been helping
moms escape from their kitchens since 1952. Even though
mom faces a new reality today — she works full time and is
a master at multitasking — she still sees value in family
dinnertime. And she knows Kentucky Fried Chicken can pre-
vent dinnertime from disappearing in her home.
But moms aren’t the only customers who know that a real meal
still matters at KFC. With our KFC Famous Bowls, customers
love getting all of their favorites— mashed potatoes, sweet corn,
all-white-meat crispy chicken, our signature gravy and three-
cheese blend—layered together in one place. Incredi-bowl!
Plus, we launched two new flavors of our customers’ favor-
ite 99¢ sandwich— the Ultimate Cheese and Buffalo KFC
Snackers—creating even more Snacker Backers. With our
franchise partners, we are continuing to invest in remodeling
restaurants and to innovate around even more new products.
And the Colonel, already one of the most recognized icons in the
world, was voted America’s favorite advertising icon, earning his
way onto the Walk of Fame as the first real person to achieve this
recognition. What’s more, we revealed the Colonel’s fresh new
look by creating the first logo visible from space.
But it was our announcement last October that proved our lead-
ership in the industry, a move to a zero grams trans fat cooking
oil for all fried products that doesn’t compromise the taste of
our world famous chicken.
With three new product launches, two record sales weeks, a
new look for the Colonel, a zero grams trans fat cooking oil and
restaurant teams showing their southern hospitality spirit more
than ever before, 2006 was indeed a finger lickin’ good year in
Chicken Capital U.S.A.
Gregg Dedrick
President and
Chief Concept Officer,
KFC
*Excluding the 53rd week.