by Josh Ozersky
5
AFTERMATH OF THE AMERICAN DREAM
The death of Harland Sanders had no effect on Kentucky Fried Chicken as a business. Far from it. The infirm, quarrelsome man with whom Heublein had warred was gone forever; the eternally beaming Colonel of the bucket was now its sole property. The Colonel’s image was now the company’s to do with as it wished. Thus began the afterlife of Harland Sanders. He succeeded in transforming himself into “the Colonel” so well that his public persona barely shimmered when he himself passed beyond the physical plane. But the image of the Colonel and the business he represented was different when he died than when he began it. And they would continue to change.
How could they not? The country was different. Colonel Sanders already was out of his element in the 1950s, an operetta character in period costume. Now he was doubly removed from that era. America had seen the transformations of the ’60s and the malaise of the ’70s. Southern gentility as an ideal had been tarnished, to say the least, by the new image of the South as a bellicose and violent place, the home of George Wallace and Anita Bryant. Fried chicken had likewise lost its luster as an image of plenty; rather than a special Sunday meal, it was perceived, at least in its bucket form, as a greasy snack or at best a lazy indulgence more likely to be accompanied by a cold six-pack than a pitcher of sweetened tea. Women were in the workplace and more often single than ever before; Kentucky Fried Chicken sold many boxes of chicken to them, but the image of a family sitting together at mealtime was no longer the norm. And it was for these kinds of gatherings that the dish was particularly suited, while the hamburger, a meal that fit in one hand and was not meant to be shared, emerged as the ideal food for a mobile and atomized nation. Neither were small restaurants, or small businesses generally, the model for success; the modern corporation, which truly arrived in the ’50s, had by the ’70s exerted a hegemony that it has not relinquished from that day to this one. More than any other change, this would have a fateful effect on the business after the Colonel’s death.
The largest change by far, however, was the cultural one wrought by television’s central and defining role in the culture. The nation was plugged in, watching the same programs, and becoming more and more united by the shared air stream: packaged culture as a relief from the violent disjunctions of the ’60s. Again, this helped Kentucky Fried Chicken’s bottom line because fast food was part of TV culture geared to the exhausted masses but also because it gave the biggest advertisers an enormous advantage over smaller rivals. Some places might have made a better chicken than Kentucky Fried, but they surely weren’t going to outspend it on TV commercials. At the same time, the need to appear au courant and ever-fresh guaranteed that the menu, appearance, or symbol of Kentucky Fried Chicken would not or could not stay the same.
By the time of the Colonel’s death, the meaning of his image had changed. In the ’50s his dress and title made reference to southern men of leisure of the nineteenth century. Attenuated as this connection was to the America of atom bombs and astronauts, it still held some real sway in the sentiments of the country. The agricultural past, its ceremonial commissions and antique customs, was not then the abstraction it would later become. That America was indeed distant and alien to the 1950s but was still within the living memory of even the middle-aged. The oldest Americans might remember as far back as the Civil War or whose forebears might have spoken to Adams or Jefferson. The country was that young. The Colonel’s string tie and white suit make reference only to itself now; he is likely the only Kentucky colonel about whom most Americans know, if they know of Kentucky colonels at all. Likewise, his image as an antebellum grandee makes no more sense in the current context of America than would that of Martin Van Buren in his wig and ceremonial sword. Insofar as he represents anything in these postmodern times, it involves some kind of mid-century big business: fast-food franchises, processed and uniform, multiplying endlessly across swarming suburbs. Like McDonald’s, Chevrolet, and a few other American businesses that rely entirely on omnipotent brand recognition, Kentucky Fried Chicken was forged in the ’50s, when the country began to assume its modern form. Paradoxically, as he was an image of the nineteenth century to the ’50s, Colonel Sanders now evokes nostalgia for that latter time in an era as far removed from it as Eisenhower was from McKinley or Peyton Place from The Yellow Wallpaper.
On the business side, Sanders’ passing came just as Heublein was coming around to his point of view regarding operations. A “recolonelization” program was announced to the press. In 1977 a capable and aggressive executive, Michael Miles, had been brought in to turn things around before the business was ruined completely, and he had acted decisively. Miles did everything the Colonel would have wanted: he underwent a kind of boot camp with Pete Harman in Utah that included such fundamental lessons as how to make chicken and how to serve the public. He put money into modernizing and cleaning up aging buildings. He met with franchisees and promised them that they wouldn’t be forced to buy equipment and supplies at a big markup—essentially that the relationship would be more of a partnership and less outright exploitation. Miles cut out the cheap items and nonchicken products that had been metastasizing across the menu, and he announced a return to core competency: “The notion really was to bring KFC back to basics, to throw out all the gimmickry and the over-reliance on price promotion and new products and so on, to take it back to the original recipe chicken.”1 Best of all, one of his first acts was to meet with the Colonel, whom he allowed to vent at length and who, old and marginalized as he was, still had some good suggestions.
The truth was that Kentucky Fried Chicken still survived largely on the strength of the Colonel’s Original Recipe chicken. It managed to fight off the threat from Church’s by introducing Extra Crispy, but three quarters of its sales still consisted of the same chicken (at least in theory) that conquered the hearts of the chicken-eating public two decades before. It was a hard product to make, especially compared with McDonald’s new processed, pressed, chicken “nuggets” in the ’80s. But it was KFC’s special product, and there was nothing quite like it. So the company made it the centerpiece of its marketing efforts, adopted the slogan “We do chicken right,” and swore eternal fealty to the principles of its fallen leader. The initiatives worked, and soon the chain’s resurgence was being held up as a near-miraculous turnaround. For more than two years, every month was a little more profitable than the one before it. Heublein’s board finally, in an act of long-needed good faith, invested $35 million in new facilities. “Now we know that this is a nuts-and-bolts business, not a quick-trick marketing and advertising business,” CEO Hicks Waldron told Forbes in 1980.2 It only took the company ten years to figure that out.
By the early 1980s, Kentucky Fried Chicken was an unqualified success and one of the top earners in Heublein’s portfolio. That made it an attractive commodity for other, bigger companies, even more vague entities with equally little relevant experience in either cooking or chicken. One such was the immensely rich tobacco company R. J. Reynolds Industries, which would later merge with Nabisco and become the face of corporate buccaneering in the 1980s. At the time, however, Reynolds was still a cigarette kingpin with a lot of money on its hands and an interest in making more. Heublein was profitable—why not buy Heublein? So Reynolds did.
Michael Miles, who engineered the whole turnaround that saved the company, was inexplicably sent packing as part of the shakeup. He was replaced as chairman by Richard P. Mayer, the former head of KFC’s U.S. operations. The business press wrote a number of adoring profiles crediting Mayer as the primary author of the turnaround and writing Miles out in the best Soviet style.
This was unjust, but the press couldn’t be blamed for writing with uncritical enthusiasm about Kentucky Fried Chicken. The chain, one of the most conspicuous and successful businesses in America, had been in a severe slump during the ’70s, like so much else in the country. Its fortunes coincided exactly with the Carter-era malaise, following the trend from
the boom years of the early ’60s into the abyss of the recession that paralyzed the American economy in the ’70s. Its resurgence now seemed to be part of the general narrative of patriotic rebirth that was being woven around the pro-business administration of Ronald Reagan. Mergers and acquisitions were easier than ever before, and wondrous new financial instruments to create capital came into being. No company was more at the center of the new vitality than Reynolds, with its massive cash reserves. The behemoth put its new subsidiary in a position to expand beyond the Colonel’s wildest dreams.
The mood of KFC’s senior management could be characterized at the time of the purchase as gleeful. After years of struggling to extract the cost of a new striped roof from Heublein, KFC suddenly had all the money in the world at its disposal. Even Pete Harman was beside himself. “KFC grossed something like $2.4 billion in 1982 [the first year under RJR],” he later remembered. “Things were really going good. In 1983 we had 4,500 stores in the U.S. and another 1,400 stores in fifty-four foreign countries. Nobody but McDonald’s was even close to us.”3
The business was booming in the United States, thanks to the back-to-basics approach initiated by Miles and his “recolonelization” program. Reynolds supported all of Kentucky Fried Chicken’s management moves, including expensive ones like the creation of “franchise managers” who would go around to stores overseeing operations, imparting the latest cutting-edge management techniques, and training servers in the various nuances of upselling. This was all heady new stuff for the chain, enabled by the new breed of manager being turned out by the nation’s top business schools, armed with backgrounds in applied sociology, economics, and market analysis—and utterly unencumbered, of course, with real-world restaurant experience.
Its more ambitious undertakings aside, however, the main focus for Reynolds was to get the Colonel’s face to beam down benevolently from every corner of the globe—a goal it was able to attain with surprising ease. Kentucky Fried Chicken had been selling overseas for a long time, but that expansion came in fits and starts. An early initiative brought fried chicken to Hong Kong, but the experiment proved a misadventure and was soon shuttered. Kentucky Fried Chicken franchises were operating in Japan, South Africa, and other countries from the mid-1960s onward, albeit with mixed success. Some, as in Brazil, actually followed the original model of Kentucky Fried Chicken’s earliest years, adding the signature product to the menus of standing full-service restaurants. For all that, the expansion did not proceed with systematic political clout, armies of managers, or an unbreakable airborne supply chain. Under R. J. Reynolds, Kentucky Fried Chicken became a legitimate colonial power second only to McDonald’s in its ability to take root anywhere and bend local tastes in its favor.
In many ways, Kentucky Fried Chicken had it much easier than McDonald’s. While the hamburger was a uniquely American food, invented in the United States essentially from whole cloth, chicken is a universal human food. Beginning in antiquity as a South Asian jungle fowl, it is kept and eaten everywhere in the world. The fried-chicken tradition of the American South, with its communal connotations and complicated racial history, may not have meant anything to the citizens of Bahrain or Beijing. But the people there ate chicken, and they ate salt, and they ate fried, crunchy things of varying degrees of spiciness, and so Kentucky Fried Chicken made sense in a way that its burger-based rivals didn’t.
And, surprisingly, so did the Colonel. Of all KFC’s overseas conquests, none was more important or more lucrative than its China operations. At the time of writing, KFC had 3,500 restaurants in China, generating nearly a million and a half dollars each, with huge profit margins, and many more on the way. Obviously, a lot went right for that to happen. An entire book, KFC in China, was written on the subject by Warren Liu, one of the architects of the business. Colonel Sanders, Liu says, was a natural way for Chinese consumers to connect with this alien product.
In addition to its product advantage, KFC China has benefited from the symbol of its brand, Colonel Sanders. For millennia the Chinese have revered their aged. Respecting and honoring the elderly, a symbol of wisdom and good fortune, has been a virtue practiced by the Chinese over the centuries. During the 1980s and throughout the 1990s, there was probably no more effective brand symbol than Colonel Sanders with his natural white hair and long beard, offering a perception of wisdom, affection, and grandfatherly gentleness. Young children were attracted by the white-haired grandfatherly figure. Parents and grandparents willingly put their trust in the same gentle, grandfatherly figure. KFC’s business was boosted by the image of the Colonel.4
As so often with great symbols, the Colonel was valuable to KFC China for precisely the same reason as here in the United States: not for what he represented, but for what he didn’t. None of the qualities Liu’s Chinese customers associated with the Colonel had anything to do with the business, which was in no way either grandfatherly or family-oriented. On the contrary, it was, behind its white-haired face, a wholly impersonal, faceless, disembodied entity with no discernible human identity at all. By this point, KFC in the United States was owned by a company that had no kind of business relationship with Harland Sanders other than as a logo, and KFC in China was one step removed even from that.
When R. J. Reynolds became RJR Nabisco in the leveraged buyout by Kohlberg Kravis Roberts and Company, described in Brian Burrough and John Helyar’s 1990 book Barbarians at the Gate, its already remote interest in Kentucky Fried Chicken began to weaken even further. As happened with Heublein a decade earlier, there was no real leadership from RJR Nabisco, which was now primarily involved with the price of its own stock. Eventually, as Heublein had before it, RJR Nabisco management decided to unload Kentucky Fried Chicken despite its vast profitability. In fall 1986, RJR Nabisco sold it to PepsiCo for approximately $840 million and moved on. By this time, all parties involved were used to the shuttling of the business from one corporate owner to the other. The new boss, like the old boss, was a vast beverage conglomerate whose experience in the packaging business was held up, weakly, as a sign that unlike the old boss, this one would be true to the roots of the business. “We didn’t fit,” Mayer said of the erstwhile parent company. “R. J. Reynolds is a behemoth in the packaged goods business. PepsiCo has a major interest in the restaurant business. It’s a better fit.”5 The sale went through on October 1, and sycophantic profiles of the new CEO appeared in the business press. “KFC’s lack of innovative leadership in recent years should change under PepsiCo,” wrote Nation’s Restaurant News breathlessly. What this meant, as the article made clear, was that the primary decision that turned KFC around—the decision to stick to what the company did best and improve the way it was delivered to customers—was to be abandoned. Apparently, CEO Mayer didn’t get the memo. In the same issue of Nation’s Restaurant News (NRN), Mayer, “as important an ingredient in the chain’s success in recent years as the 11 herbs and spices,” opined about what he thought made the company successful.
Since joining KFC in 1977 as a marketing executive, Mayer has strived to keep the chicken chain aloof from the menu expansion binge that has swept up virtually ever other fast food feeder.
“In the past few years, people have gone absolutely schitzoid [sic],” Mayer commented. “People are groping for new [market] positions. A lot of chains blurred their image by adding so many new menu items.”6
Meanwhile, elsewhere in the very same issue, a triumphalist feature, “KFC Rules the Roost under PepsiCo’s Wing,” contained the exact opposite message: “KFC-USA president Donald E. Doyle has said the major shift in the chain’s strategy is the aggressive development of new menu items.”7 Right, then! It was clear who would win this argument, if argument it could be called. A couple of years later Mayer, the invaluable man, joined Mike Miles in limbo. There was no past inside KFC’s corporate culture; even leadership, such as it was, consisted of various career executives shuttling into and out of the system. The only way to distinguish one from the other was by their names
and titles.
Five years after its self-contradicting PepsiCo pieces, NRN repeated the imposture with two more contradictory KFC pieces in the same issue. One was on message with a puff piece on the latest suit occupying the CEO’s office: “With a master’s degree from Harvard University and a career spent largely in giant corporations, John Cranor III is clearly cut from a different cloth than Colonel Harland Sanders,” it began, before going through the usual litany of testimonials to the executive’s people skills and tough-mindedness. Cranor, it declared, once had a job requiring actual physical labor picking strawberries alongside migrant workers. “I don’t pretend that I’m migrant-worker-friendly,” Cranor added, lest NRN readers think him overly sentimental.
Meanwhile, thirty pages earlier one could find a more credible story indeed—one that told of the war between the company and the franchisees who actually ran the stores and brought in most of the chain’s earnings. Unlike John Cranor III, these owners were in fact cut from the same cloth as Colonel Sanders and despised Cranor almost as much as their departed leader would have. Cranor had little regard for the franchisees; he considered them a hindrance to PepsiCo’s making free with its new possession. There was a suspicion among some of them that PepsiCo wanted to own the stores outright and had no compunction about playing hardball with its new partners. Darlene Pfeiffer was the new president of the Association of Kentucky Fried Chicken Franchisees, a powerful group that had been fighting management since 1974.