The Colonel Dives Into China's Hot Pot
By TOM ORLIK
Forget Angry Birds, get ready for an explosion of Little Sheep.
Yum Brands, a leader in China's restaurant industry, plans to take its 27% stake in hot-pot chain Little Sheep Group to full ownership. No prizes for guessing why Yum is supersizing its China business. China accounted for 43% of Yum's operating profit in 2010 and rose 26% year on year versus 3% in the U.S.
Yum has enjoyed explosive growth in China, taking its KFC stores from 500 in 2001 to 3,244 in 2010. But organic growth can go only so far. Mathew Crabbe of Access Asia says a move into hot pot makes sense as it avoids competing with Yum's existing Chinese businesses, which already cover Western fast food through KFC and Pizza Hut brands.
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