Must-know: Yum! Brands’ initiatives for pizza and taco business

Yum! Brands’ initiatives for Pizza Hut and Taco Bell 

Yum! Brands (YUM) plans to venture into untapped pockets to grow its revenues. Yum! Brands will be opening new restaurants in lower-tier cities in China—mainly in tiers three to six. The pizza business’ two-year cash payback period is more motivation to open new units.

Must-know: Yum! Brands’ initiatives for pizza and taco business

Pizza Hut initiatives

The U.S. market has performed weakly in the second quarter. However, according to the QSR magazine, the company received a top tier ranking for “speed, accuracy, and hospitality.” The company plans to catch the millennials with a new advertising campaign and digital strategy such as mobile ordering application (or app). Globally, it plans to open 450 Pizza Hut restaurants in 2014. The company also introduced a pizza sized cookie that would cost $4.99 if accompanied with a pizza and $5.99 stand alone, according to Time. The cookie is filled with Hershey chocolate.

Taco Bell initiatives

For Taco Bell, Yum! Brands is focusing on the breakfast menu. It’s served only between 7 am–11 am. This will help the company drive more sales, according to the management. However, it has also introduced Quesaritos, to help sales during non-breakfast hours. The name Quesarito originates from a combination of quesadilla and burrito and as the name suggest, it is a hybrid of the two. While the breakfast menu will directly compete with McDonald’s (MCD), the Quesarito will compete with Chipotle Mexican Grill (CMG).

Overall, Yum! Brands, has 700 units in India. It plans to open another 115 restaurants by the end of 2014 and 2,000 restaurants by the year 2020. An investor looking to invest in the restaurant industry can gain exposure by investing in exchange-traded funds (or ETFs) like the PowerShares Dynamic Leisure and Entertainment ETF (PEJ) and the PowerShares Dynamic Food and Beverage ETF (PBJ).