One emerging trend in the restaurant space is the idea of delivering food from multiple concepts to the same house with the same driver.
This is a theoretical opportunity for a chain like Yum Brands, which owns one concept, Pizza Hut, that has an army of delivery drivers that theoretically could pick up some tacos from Taco Bell, chicken from KFC or burgers from Habit on the same order.
So will we see Pizza Hut delivering Taco Bell? Not anytime soon, says Yum CEO David Gibbs.
“I think for us, it’s always good to come back to what’s our purpose for being, it’s to build our individual brands to be the best that they can be,” Gibbs told J.P. Morgan Analyst John Ivankoe earlier this week, according to a transcript on the financial services site Sentieo. “So anything that we might do to sacrifice the success of Pizza Hut, while a Pizza Hut driver is trying to deliver Taco Bell, we’re not going to do.”
Pizza Hut, he said, is plenty busy. The chain’s same-store sales for delivery and takeout were up 20% on a two-year basis last quarter. “So it’s not as if we’re looking for something for our drivers to do right now,” Gibbs said.
Then again, he wouldn’t necessarily rule it out, either. Yum Brands recently completed the purchase of Dragontail Systems, a technology company that can help manage kitchen orders and deliveries. The question of whether Pizza Hut could deliver for Taco Bell, KFC or Habit came up in the context of that deal, which theoretically could enable Yum to manage deliveries from multiple concepts.
And Gibbs admitted that Yum has “played around with that.”
“It’s certainly an opportunity,” he said, “and somebody like Dragontail would enable that with their order management software. And we do have pockets of tests and have played around with it.”
“But certainly,” he added, “as the world evolves, as different means of delivery evolve, as software gets more sophisticated, there’s probably an opportunity there.”
The question of whether Pizza Hut could deliver for Taco Bell or KFC could be an interesting one as the technology does evolve—even if that possibility remains far off.
Large, multi-brand concepts are considering many different options for adapting to current realities of takeout and delivery. Inspire Brands, for instance, is developing its own ghost kitchen. The single-brand Chick-fil-A, meanwhile, is developing a trio of virtual concepts and putting them in one facility, along with a Chick-fil-A, to offer a huge variety of food.
For Yum, however, that issue is more complex because of its history. For several years, the company owned its three brands along with A&W and Long John Silver’s and believed that it needed to cobrand two or more concepts in single locations. In hindsight, such an idea might have worked for delivery today.
Yet the company ultimately sold off the two ancillary brands and moved dramatically away from that strategy, instead letting its concepts work on their own.
That strategy appears to be working these days as all three brands have found their footing in the U.S. As Gibbs noted, there’s risk in pushing a multi-concept delivery strategy using Pizza Hut’s drivers.
“We have three of the world’s greatest brands and a fourth that’s about to become one that are incredibly strong, have loyal followings, have different consumer bases and are standing on their own, have great unit economics and huge growth potential ahead of them,” Gibbs said. “That is what our focus is.”
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