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Chinese Potato: Why not me for KFC's Mashed Potato?
Tricon China is a reputable restaurant group operating chain stores as KFC, Pizza Hut and Taco Bell, being part of the Tricon Global Restaurants Inc. On October 7, 1997, PepsiCo picked out three of its restaurant brands -- Kentucky Fried Chicken (KFC), Pizza Hut and Taco Bell-- to form Tricom Global Restaurant Inc.
As the city's first fast food joint venture, KFC set up its first store in Qianmen, downtown Beijing in 1992. It has 11 stores then and the figure was extended to 50 by 1995. As China's No 1 fast food restaurant, by 2000 KFC has set up 19 branch companies across China, operating more than 400 chain stores in over 100 cities.
"Mashed potatoes are sold out!" This is KFC's reply to many Chinese customers in recent days. Why the major product of KFC is suddenly out of supply? Can Chinese enterprises seize the opportunity? Reporter interviewed Tricon China, headquarter of KFC in China.
Why mashed potatoes out of supply? Xu Zhen, manager of public relation department of Tricon China tells that this time's lacking of supply is quite normal due to provider problems. KFC only has contract with an American provider whose mashed potato has passed ISO9000 quality evaluation and are recommended by the National Potato Council of the US. But now its potato is out of stock.
This shows KFC's restriction in selecting providers and reserve provider has been informed to ensure mashed potatoes back on the table in one or two months. However, as is known, Beijing has 30,000 mu planting area for potato with a total output of 45m kg. Why KFC declared shortage of supply despite of that?
Potatoes of KFC and McDonald's all come from Idaho of the US, where it enjoys a reputation of "the state treasure" with an output of 29 percent of the whole country. An official tells that mashed photos are very common products and now there is no production problem, so maybe it's the transportation process. He also says that because favorable natural environment and advanced agricultural technologies, Idaho's potatoes contain less water and the right volume of sugar, which make them very suitable for being made into chips and mashed ones.
Can Chinese potatoes seize the opportunity? Shirako International Trading (Shanghai) Co,. Ltd, a leading company conducting potato processing business, tells the reporter that Chinese potatoes can not meet KFC's demand not only in natural quality but also in processing equipment. But in recent years many enterprises have updated their equipment and mashed potatoes like KFC's made by Shirako only costs 1 yuan.
How big is the potato opportunity? In KFC's Tuanjiehu store reporter found seven customers asked mashed potatoes within 10 minutes. Taking KFC's business time into consideration a store would sell at least 630 mashed potatoes each day, which brings an income of 1890 a day, or 689,800 yuan a year. That means over 300m yuan for KFC's 450 stores in China.
Experts hold that currently KFC's chicken is all Chinese made due to its high quality and standardized production system. Surely KFC will not seek from afar if Chinese potatoes meet its demand?
By PD Online Staff Li Heng
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