Yum Brands' CEO Greg Creed (left) and his successor, David Gibbs.
When David Novak retired from Yum Brands in early 2015, a giant question mark loomed over the company he helped create in 1997.
After all, that new company–which then included Taco Bell, KFC and Pizza Hut brands, as well as former Yorkshire Global Restaurants’ Long John Silver’s and A&W (Yum sold the latter two in 2011)–came to be long before multi-brand companies were much of a thing in the restaurant space. The relatively unproven structure enabled Yum to quickly and efficiently scale into a dominant global player unmatched in many international markets, including China.
The China market was especially opportunistic, allowing Yum to tap into a swiftly-growing population enamored by Western brands and pop culture. Bolstered by this affinity, the company’s shareholder value increased 10-fold during Novak’s tenure.
When Novak retired, he unquestionably left big shoes to fill. But as it turned out, Greg Creed fit into them quite well.
Creed, a Yum Brands’ disciple who led Taco Bell through wildly successful campaigns like “Think Outside the Bun” and the game-changing Doritos Locos Tacos launch, announced his retirement on Monday, effective at the end of this year.
Creed has made his own indelible footprint on the restaurant industry. The 62-year-old Australia native earned his chops as a brand manager working for Unilever before landing as CMO for KFC, Pizza Hut and Taco Bell in Australia and New Zealand when they were under the umbrella of PepsiCo Restaurants International (1994-2001). With subsequent roles of varying degrees at both Taco Bell and Yum, Creed has spent a total of 25 years with the company.
He took over at Yum as the company counted 43,000 restaurants in 135 countries, opening six new units a day on average. Now, it boasts over 48,000 restaurants in more than 145 countries and territories and opens over eight new restaurants per day on average.
Global development is a mere blip on Creed’s list of accomplishments, however. Near the top of that list is Yum’s successful spinoff of its China business in 2016, a move meant to facilitate a more focused strategy. At the time, the China business had lost much of its luster, experiencing about 10% market share loss in just four years due to changing consumer tastes and a number of food safety incidents.
Yum put an ensuing three-year strategic transformation plan into place for its Pizza Hut, KFC and Taco Bell brands that has generated growth, increased franchise ownership to 98% and created a leaner organizational structure.
Much of Yum’s transformation investments have paid off. The plan enabled Yum to re-prioritize its domestic KFC business, for example, which (some opined) declined because of the company’s considerable focus on China. In 2014, the number of KFCs in China surpassed those in the U.S. for the first time.
Now, the U.S. business is riding two-plus years of same-store sales growth and is primed for net new unit growth for the first time in 15 years.
Creed’s focus on re-franchising as part of that plan has also been a major boon, reducing capital requirements, generating higher earnings per share and freeing up more cash flow across the board.
This strategy has enabled the company to take some bold investment moves, for example its $200 million stake in Grubhub in 2018. The partnership is quickly bringing Yum’s three brands up to scale in the fledgling but fast-moving delivery space, while also largely insulating its franchisees from the high fees that have hindered the space.
It also illustrated Creed’s foresight on delivery, a channel that remains complicated for most restaurant operators, but that certainly isn’t going away.
Also under Creed’s watch, Yum has aimed to achieve “RED” for each of its three brands, or “relevant, easy and distinctive.” Think about the brand relevance in Taco Bell’s hotel selling out in two minutes or the rotating Colonel campaigns; the ease of Pizza Hut’s new online ordering infrastructure or Taco Bell’s kiosk rollout; or the distinctiveness of the Nacho Fries and the Cheetos sandwich. In his four years in the driver’s seat, it’s clear the Creed-led Yum has hit on these RED goals.
But Creed’s leadership has been about much more than the day-to-day business.
“The most pleasure and joy (from the job) is just seeing people grow,” Creed told Nation's Restaurant News.
His leadership has certainly enabled such growth. Earlier this year, Creed was named as an “Industry Titan” by the Women’s Foodservice Forum for driving gender equity and investing in women leaders after Yum committed to achieving greater gender parity in senior leadership globally by 2030. Yum also signed onto the CEO Action for Diversity & Inclusion, the largest CEO-driven business commitment to advance diversity and inclusion within the workplace. And, Creed established a diversity and inclusion council called Leading Inclusion for Today and Tomorrow. This list of people-first examples goes on and on.
Creed will be succeeded by David Gibbs, another veteran of Yum who was recently promoted to president and chief operating officer. Prior, he served as president and chief financial officer. His experience spans disciplines, from global strategy to real estate, and gives him a remarkably unique perspective on the business.
To no surprise, Gibbs already has big ideas and big plans for the role, telling Bloomberg on Monday that Yum will consider additional partnerships and strategic investments and, perhaps, maybe even another restaurant chain.
However, the clearest indication that Yum won’t miss a beat during this transition comes from Creed himself: “(David) has been an invaluable strategic partner to me during our transformation and instrumental in shaping our global strategy, accelerating the pace of global new unit development, executing our transformation goals and laying a strong foundation for future growth. Importantly, David lives and breathes our people-first culture and is determined to take it to the next level.”
