Following a new contract with a brand-new supplier, KFC had to shut at least 750 of their 900 restaurants due to a chicken shortage – leaving customers disappointed and some staff temporarily out of work. With experts predicting that the fast-food chain lost around £1 million per day during their chicken shortage crisis, KFC have become a key example highlighting the importance of finding a trusted and reliable supplier in the catering industry.
With KFC, and many other catering services, delivering fresh food to the business is complex and time sensitive – which QSL, DHL and KFC soon realised, just four days into their new contract, when delivery and supply faced serious delays. With little room for error in the supply chain, a small mishap in the delivery of fresh chicken caused a domino effect across the business as it faced a chicken shortage. Thankfully, KFC have now reopened their doors to their loyal customers, but following the business downtime, what can other catering services learn from their mistakes? Just how important are your suppliers to the smooth running of your business? Nisbets, retailers of catering equipment, discuss.
For catering professionals, the cost of ingredients is considered the most important factor when deciding on menu choices. In a Nisbets’ Pulse Survey in 2017, 37% of respondents claimed it was the main consideration when changing menus. The cost of ingredients can also lead a business to look for a new supplier. If two suppliers offer the same ingredients, but one is significantly more expensive than the other, it can seem like a no brainer to choose the cheaper supplier. But that doesn’t necessarily mean you’ll be saving money. Which KFC soon realised.
KFC chose to switch their delivery contract in favour for a new agreement with a cheaper alternative to save money and increase profits. However, instead, they have now faced days and days of lost profits in more than three quarters of their UK restaurants. Teething problems are expected whenever you change your process, but how much will it cost your business?
When it comes to food deliveries, distribution can be aided with multiple warehouse locations – especially when delivery needs to be fast-paced and to so many locations. With KFC, delivering produce to over 900 stores is a complex system to begin with. Their previous suppliers had six warehouse locations to distribute from, however, their new supplier had just the one. Relying on one distribution location can cause issues, if it struggles to keep up with the demand, there is no safety blanket to fall back on. If something goes wrong, there is little room for contingency plans – which is what led to KFC’s supply shortage.
However, that’s not to say that the KFC new agreement won’t smooth out in time. When it comes to changing suppliers and delivery contracts, you should evaluate if you can afford to endure some teething problems. The right supplier and delivery system is key to the smooth run of business – without your ingredients, you have no products to sell to your consumers. Highlighted by KFC, quality, quantity and safety of your ingredients in transit can be the difference between meeting and failing to meet consumer demand.
Luckily, KFC’s PR team were hot on trying to keep upset customers on side. Also highlighting the importance of social networking, KFC used their Twitter account to keep their customer up-to-date with its progress by posting a whole host of bird-related puns to make light of the struggling situation. And it appeared to work, with many industry professionals forecasting that the ‘chicken crisis’ and KFC’s clever marketing will boost its long-term demand. A triumph for the fast-food brand, addressing the issue head on with good humour.
Social media has many benefits for catering companies, with modern day consumers trusting social platforms to help make their decision on where and what to eat. Other catering services can learn from KFC’s clever use of social media to interact with their consumers. Whilst bad press and criticism can be hard to swallow, KFC have proven that addressing the issues cleverly can have the opposite effect. Furthermore, the Nisbets’ Pulse Survey results also reveal that 93% of respondents believed that their social media efforts had a mostly positive impact on their business. A figure that can’t be ignored when it comes to successful marketing for any catering business.