The Trans Human Restaurant Operator

Dec 22, 2022 | Corporate Insights, No Bull Economics


Yum! highlighted during a recent analyst day presentation how its strategy to acquire proprietary tech companies provides a key advantage relative to competitors who must rely on commoditized solutions from third parties.

Key Points:

  • Acquisitions of proprietary tech companies provide Yum! with advantages in digital, kitchen tech/labor efficiencies, and marketing.
  • Annual digital sales have increased from $12B pre-covid to $24B for 2022 (40% mix) and the corporate goal is to eventually drive a 100% digital sales mix. By collecting digital customer data, Yum! can leverage tech to better understand consumer preferences & predict their purchases.
  • Digital sales drive higher frequency & tickets, provide access to new customers & new occasions, and improve labor productivity by eliminating the need for staff to take orders & payment.
  • Yum!’s Dragontail acquisition provides AI automation to make all the decisions critical to running a Pizza Hut. This tech directs the kitchens to start cooking so that the food comes off the line at the right time while also managing delivery drivers (improving productivity so that customers receive fresher, hotter products).
  • New back-of-house systems manage staffing, scheduling & inventory. The planned year-end 2024 integration of kiosks, KDS touchscreens for employee order taking, and POS with Tracks tech should drive a “dramatic” increase in store-level profitability.
  • The Yum! Super App (which started in Pizza Hut as the Hut bot restaurant management tool) is expanding across the company’s brands.
  • Investments in connected kitchen tech (like bluetooth temperature sensors which allow managers to run the store from a tablet) are also designed to drive automation such that more labor can be applied to improving the guest experience.
  • Acquisition of Kvantum Inc. provides Yum! with algorithms & AI models to help its brands understand consumer behavior to make informed media & calendar decisions. The tech also measures the effects of marketing tactics in a designated geography across owned, paid and earned channels.
  • Yum! plans to combine Kvantum’s capabilities with the work of the anthropologists & sociologists at Collider Lab (a culture-based consumer insights and marketing strategy consultancy) and Quantum (another Yum! acquisition) which provides capabilities to mine Collider’s data for insights.
  • Acquisition of Tictuk Technologies (an omnichannel ordering & marketing platform company) provides more ways for consumers globally to access & order through popular social media & conversational platforms.
  • Current tech initiatives seek to implement: computer vision tech which help team members fulfill orders more accurately; labor productivity with robotic assist; conversational AI to automate order taking at the drive-thru; and use of the Internet of Things (IoT) to monitor restaurant systems & drive energy efficiency.
  • The vast majority of Yum!’s stores are located outside the U.S. & plans to develop 4,000 gross units/year (3,000 net) globally going forward reflects that Yum!’s 5 units per million people penetration in its top 10 emerging markets suggests a large upside vs. its 54 level in the US.
  • Yum! employs 1.5MM & adds hundreds of employees every day.
  • Franchisees run 35 restaurants on average.
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