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KFC, Beyond Meat executives detail the launch of plant-based fried chicken

KFC President Kevin Hochman and Beyond Meat CEO Ethan Brown join Yahoo Finance Live to discuss their partnership to bring plant-based chicken to U.S. consumers, the shift to plant-based foods, and fast-food product innovation.

Video transcript

BRIAN SOZZI: Colonel Sanders probably didn't see this day coming when the first KFC franchise opened in 1952. Today, the fried chicken joint will launch nationwide plant-based chicken from Beyond Meat for a limited time. This is not the first time the two have teamed up. KFC first tested Beyond Meat's plant-based chicken in August 2019 at several locations in Atlanta. The items sold out in under five hours. Joining us now is Beyond Meat's founder and CEO, Ethan Brown, and KFC US president, Kevin Hochman. Good morning to you both gents. Nice to see you again. Ethan, first question to you. Who do you think the core customer is for this?

ETHAN BROWN: So this is really about enabling people to continue to increase the choices that they face as they go into their favorite restaurants. And KFC has been such an incredible partner to us over the years, allowing us to iterate together to create a product that is absolutely delicious. And it really is to appeal to what we call flexitarians, folks that are making reductions in animal protein consumption, but not eliminating animal protein consumption, and doing that in the places they love to eat like KFC.

BRIAN SOZZI: Kevin, from the KFC perspective, if I'm a person going to KFC ordering my bucket of chicken, like I have done for 15 years, do I buy these products as an add-on or do I give up that bucket of chicken and buy a bucket of Beyond?

KEVIN HOCHMAN: Well, I think it's a both answer, right? We think that we're going to attract some new younger customers that traditionally have not come to KFC that are looking for more plant-based options in their lifestyle, as well as potentially getting our existing customers to come more frequently because they have folks in their households or themselves wanting to eat more plant-based protein. So, you know, it's an amazing product. Beyond's an amazing partner. They're a terrific brand. They have the best tasting products. And they've been able to develop a product that is worthy of the Kentucky Fried Chicken name, which is what we're super excited about.

JULIE HYMAN: Hey, guys, it's Julie here. Certainly, you can fry most things, and they're going to taste pretty darn good, although they're different-- they're a different strata of fried stuff. Ethan, I'm curious how you guys formulated this differently from some of your other products, too. And are you trying to taste like the chicken at KFC? Or talk to me about the development process, if you will.

ETHAN BROWN: Sure, and it's been a really-- it's been a fun process. It's been one we've done together. And that's always really important. I mean, they opened up all their research and development capabilities to us. And we did the same. And this has been going on for years now. So what we've been doing is trying to get toward that North Star. Everyone really loves a taste of Kentucky Fried Chicken. And we wanted to deliver that to the consumer, but simply change the substrate or the meat component of it.

And so for us, it was really a focus on texture. How do we get that whole muscle texture so when the consumer bites into it, it feels so much like what we've been used to consuming for so long, which is that chicken breast feeling. And so never deviated from that goal, which is the North Star of Kentucky Fried's really delicious tasting products. And I think we're getting closer and closer. And this launch today, consumers are going to get an opportunity to taste I think what's the best in the market.

JULIE HYMAN: And Kevin, just to go back to you on this, I am curious. Do you think that this is going to generate new traffic for you guys?

KEVIN HOCHMAN: Yeah, absolutely. We've got 90% of the folks that are buying Beyond and plant-based proteins at the grocery store are also eating animal-based proteins. And so you think about our core customer and our longer term strategy, which is to get the next generation of customers into the KFC brand, whether they're families or single people.

And this is the type of product of many innovations they're looking for, that they're going to come and drive past a bunch of other QSRs to get to. So, you know-- and there's a lot of other changes that we have in our restaurants right now, whether it's our new app or our new website, our new chicken sandwich, which has done exceptionally well. These are all things that that customer is going to experience and come back to KFC more often.

BRIAN SOZZI: Ethan, fast food sales have been strong, really, in the past six months, KFC and many other brands, too, as well. I mean, given where we are in the pandemic, do you think we have some sort of healthy eating fatigue amongst people?

ETHAN BROWN: You know, it's a great question. And I think KFC did an amazing job pivoting to drive-through and really showed success throughout the pandemic. I think we're emerging from what has been such a difficult time. And I think people are looking now to make changes in their diet and in their lifestyle to put all this behind us. And so I think it's the perfect time to be launching this. And I think KFC is a great partner to do it with. I think over the next 12 months, you'll see more and more people come out of this pandemic and resume a healthier lifestyle. And so this is an opportunity for them to do it.

BRIAN SOZZI: There's been-- Ethan, I don't want put it lightly. There's some interesting stories out about Beyond Meat in recent months. How-- maybe you can set the record straight for us. How full is your product pipeline, looking out over the next 12 to 18 months?

ETHAN BROWN: I mean, it's really-- it's fun to look into our innovation pipeline and see all the products that are available for us to push out into the market. And if you look at what we're able to accomplish over the last 18 months, I think we've commercialized more products than anyone in the plant-based industry across the globe. We've opened up facilities in Europe and in China, introduced new products there.

Here in the US, this is a perfect example. This is the largest nationwide plant-based chicken launch ever. And so we are innovating at a terrific pace. We're growing our infrastructure to be able to produce and serve these customers at an even stronger pace. And so we feel really good about what's coming down the pike. I think you'll see additional announcements from us throughout the year on products and partnerships.

BRIAN SOZZI: Good to hear. And lastly, just on the innovation front, too, as well, how hard is it to create products like this? And how long does it take?

ETHAN BROWN: You know, I think it's-- we began this journey on chicken 13 years ago. And so we've been iterating our platforms. And it's really around these characteristics that we call FAAT-- Flavor, Aroma, Appearance, and Texture. And we're trying to improve those every year by looking sort of relentlessly at the composition of animal protein, and then sourcing the analogous molecules or the same from plant-based inputs, and then organizing those in the architecture of animal protein.

And so when you do that year after year, and you're doing that against a target that is static, which is the animal's body, or the animal's body is not evolving or changing at a pace that we can see. And so we have this opportunity to continue to innovate and iterate toward our North Star. And we get closer every year. And I think this product with KFC is an absolutely perfect example of that. I think it's going to delight consumers. It's certainly delicious. And we'll keep working with KFC to introduce better and better versions over the years.

BRIAN SOZZI: Yeah, I'm going to get the heck out of my kitchen and go order myself some of these. Beyond Meat founder and CEO Ethan Brown, good to see you as well. KFC US President Kevin Hochman, good to see you, too. Have a great rest of the week, guys.

KEVIN HOCHMAN: Thank you.

ETHAN BROWN: Thank you much.

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