KFC is a leader in traditional hand-breaded, bone-in Southern fried chicken with considerable brand equity around its Original Recipe seasoning (top selling menu option) and Extra Crispy option. Its iconic brand is distinguished by red & white striped buckets of bone-in chicken pieces featuring the Colonel’s portrait. Buckets of KFC chicken are positioned as an indulgent/nostalgic home meal replacement option bolstered by the Colonel’s high standards with taste representing a key brand differentiator (finger lickin’ good) and value primarily presented as affordable home meal replacement bundle options. The chain’s increased relevancy reflects progress in expanding into sandwiches, tenders, wings, bowls and pot pies while also increasing flavor options (spicy, Nashville Hot & KFC Sauce). A successful chicken sandwich (quarter pound filet of double-breaded chicken stacked on a brioche bun in classic or with a spicy sauce) continues to drive sales and its Secret Recipe Fries currently represents a top selling side. Notably, its digital mix has more than doubled from pre-lockdown levels, benefitting from the recent launch of its internally built KFC e-commerce website & app and its new “Quick Pick-Up” program which allows customers to place online orders for pick-up off an in-store shelf (helping DT congestion). Brand strength is reflected by its most recent 3Q21 comp performance (+13% on a 2-year stacked basis) and going forward comp tailwinds include: continued success of chicken sandwich sales; continued strength in group/bucket sales; heightened demand for drive-thru access (buckets travel well) which compliments KFC’s fast DT speed; and growth from digital helped by its new Quick Pick-Up program. A system-high AUV reflects several years of comp growth and closures of underperforming stores. Having said all this, KFC’s market share has declined by -19.5% ($1B+ chicken segment) over the last 10 years and the system has incurred 17 consecutive years of domestic net unit count declines. Current sales headwinds include stiff competition and chicken price inflation which inhibits the brand’s ability to offer lower price points for its lower income demo. Notably, chicken slaughter prices increased an astounding +42% y/y in 2021 which explains KFC’s decision to de-emphasize value/discounting. In conclusion, while KFC is making Southern fried chicken cool again, inflationary pressures pose a challenge to keep things affordable for its traditional low-income demo.