Yum! Brands consolidating global operations under brands, to keep India and China units separate

NYSE-listed Yum! Brands Inc is consolidating global operations under key QSR brands KFC, Pizza Hut and Taco Bell by integrating international and US units, while keeping its business in India and China as separate country specific entities, as part of an organisational restructuring. 

The new structure would be effective from January 1, 2014 and basically combine Yum! Restaurants International (YRI) and the individual divisions for KFC, Pizza Hut and Taco Bell in its home market the US.

Yum! Restaurants China and Yum! Restaurants India, which have already been outside YRI, will remain separate divisions given their strategic importance and enormous growth potential, according to a press statement. 

A top executive of Indian origin, Muktesh (Micky) Pant, who is currently the chief of YRI, will become CEO of KFC (covering all regions except India and China). He was promoted from president of YRI to CEO two years ago.

Pant joined Reebok in October, 1994 as managing director for Reebok India and two years later appointed to the position of regional director for new markets - Africa, the Middle East and India, and remained based in India. In June, 1999, he was promoted to vice president of global marketing, based at Reebok's corporate headquarters. A year later he became senior vice president of global marketing services and in 2001 became global marketing head of Reebok. He had quit his position three years later to start a venture related to yoga but joined Yum! Brands in 2005 as its chief marketing officer. 

Prior to Reebok, he spent four years at PepsiCo after a 15-year stint at Unilever. 

Talking about the organisational overhaul, David Novak, chairman and CEO, Yum! Brands, Inc, said, “We believe that having 100 per cent focused brand teams will enable us to more aggressively accelerate growth. We also believe know-how sharing will be more powerful by bringing the US and international businesses together.” 

“This is a natural evolution from where we are today.  Over the last few years, we have been separating our YRI field business units by brand. The next logical step was to organise our division leadership and resources by brand, as we are now doing,” he added. 

Meanwhile, global president Rick Carucci has announced his plans to retire in March 2014. 

Commensurate with this new organisational structure and beginning in fiscal year 2014, Yum! Brands will be providing financial reporting by global division: KFC, Pizza Hut and Taco Bell, as well as for Yum! Restaurants China and Yum! Restaurants India. It will share more details related to this new organisational structure and financial reporting during its annual investor meeting on December 4 in New York. 

Yum! Brands trails its global rival Domino’s in terms of size of pizza chain business in India, but has aggressive plans to expand presence in the country across units. It also has a reasonable spread through KFC outlets and though it has been bullish on Taco Bell, which was launched only around three years ago in India, it has not managed to significantly scale up its presence as yet.

Two years ago, Yum! Brands made India a separate division with local head Niren Chaudhary, president of Yum! Restaurants India, reporting directly to global chief Novak. The local team has been adapting the China business model for India to leverage its iconic brands.

In its first year as a standalone division, India added 138 outlets, including 80 KFCs. This was the second year in a row where it built more than 100 new stores in the country. The firm ended 2012 with 280 KFCs, 310 Pizza Huts and three Taco Bell outlets in India. Four-fifths of its outlets in India are franchised. The group seeks to hit the 1,000 outlet mark in India within two years, almost double of last year’s level.

(Edited by Joby Puthuparampil Johnson)

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