It’s the brand, stupid
The kids are in the backseat, fidgeting and demanding to be fed. You and your spouse could use a bite, too. The only question is where to stop: up ahead there’s a Pizza Hut, across the road is Taco Bell and just beyond that is the familiar red roof of KFC. Will it be pizza, Mexican or fried chicken?
You can take your pick as far as John Bitove Jr. is concerned. Thanks to some clever deal-making over the past few months, he now controls the largest collection of franchise restaurants in Canada, with 639 KFC, Pizza Hut and Taco Bell outlets in 400 communities. This year, the company expects to serve 60 million customers. That’s 25 million chickens, 6.2 million pizzas, 3.5 million litres of gravy and 25 million pounds of fries, all washed down with 35 million soft drinks—enough to fill 17 Olympic-sized swimming pools. Food connoisseurs may sneer, but Bitove, 39, is certain he’s
on to a good thing. Drive through any major city or town in Canada and it would be easy to conclude that the fast-food business—the industry prefers the term QSR, short for quick-service restaurants—is saturated. Far from it, says Bitove. Canadians eat only about two-thirds as much fast food as Americans. And in both countries, consumption— particularly of takeout and homedelivered food—is growing rapidly.
“The home-meal-replacement market is becoming a larger and larger part of the North American lifestyle,” Bitove says. “People’s attitude has become, ‘What am I hungry for—what’s fast and easy?’ ”
Bitove is well qualified to respond. His grandfather, who emigrated from Macedonia in 1919, used to run a small butcher shop on Toronto’s Queen Street East. A generation later, John J r.’s father opened the first of a string of restaurants. Later, he expanded beyond Toronto as holder of the Canadian franchise rights to the Big Boy chain of family restaurants, with 32 locations in Ontario, Quebec and Alberta. Today, the family-owned catering and hospitality business, Bitove Corp., controls food and beverage concessions in airports, hospitals and sports facilities across Canada, as well as Wayne Gretzky’s Restaurant in downtown Toronto.
John Jr. began his career working for the family business, then went off and spearheaded the group that started the Toronto Raptors NBA franchise. A diehard basketball fan, Bitove was the team’s first president but sold his 39.5-per-cent share of the team after a dispute with the other owners.
Despite the bad blood, Bitove has fond memories of his
time with the Raptors. “It’s the Raptors experience that woke me up to the importance of branding—I mean, wow. Our goal was to create momentum by going after younger adults and kids, because we knew the Blue Jays and the Maple Leafs had the older set. So coming up with the name and logo was radical in itself. Then we tested it and came out with it and— boom!—the merchandise started flying off the shelves. So holy cow, there’s method to this madness. You do the research and target where you want to go, and you can fundamentally create more value than you had before.”
In his own lifetime, Bitove has seen the same phenomenon in the food-service industry. When his father got into the business, most restaurants were independently owned. Now, brands pull in the big money. “Our generation is a lot more brand-specific than our parents were, and we’ll pay to make
things easier because often we don’t have time for a traditional restaurant where you sit down and wait,” he says. “We can say brands are a horrible thing, but that’s the way the world is going. And I’d rather be on the bandwagon as opposed to trying to educate the world on what I think is a better way.” In practical terms that means more locations, more advertising and more of an effort to implant the KFC, Pizza Hut and Taco Bell
names in Canadians’ daily lives. Already, the three chains combined have one of the largest ad budgets in the country and the largest food home-delivery operation, worth $ 100 million a year in sales. Bitove intends to consolidate the company’s five call centres—in Montreal, Toronto, Calgary, Edmonton and Vancouver—perhaps replacing them with a single toll-free call centre in New Brunswick. Also on the horizon are hundreds of tiny, kiosk-style outlets that can be dropped into office buildings and other locations that wouldn’t support a conventional outlet. “It would blow you away how small of a kitchen we need to get the job done.” Think Fotomat, he says. Now think Pizza Hut in the lobby of a large apartment building. Think three-in-one outlets, combining KFC, Pizza Hut and Taco Bell under a single roof. Kds can’t agree where to eat? No problem. It’s like a gas pump: regular, mid-grade and super from one nozzle. Drive in and fuel up. Bitove knows something the food snobs don’t. It isn’t about the food. It’s about the brand. It’s about mass-marketed carbohydrate and deep-fried protein, fuel to get you through the day. Come and get it. Or phone and they’ll deliver.