Food is something we all need to eat and some companies are seemingly a license to print money and others doing almost the same thing, do not make money or barely break even. The issue is always why and how do you invest in companies that have a license to print money? In the food business it is difficult, but we all like to eat which means we all have an opinion.

In an article by Dee-Ann Durbin of the Associated Press, one of the owners of the food that we like to eat is called Yum Brands Inc. They own the franchises of KFC, Taco Bell, Habit Burger & Grill and Pizza Hut. If you are a relatively average consumer you likely eaten at one or more of the restaurants over the years.

At one time Pizza Hut is where everyone wanted to eat pizza. The company expanded and there are 6,500 stores in the US and another 14,000 stores around the world. The biggest location outside of the US is China, although half the sales of the company come from the US.

One of the biggest problems of Pizza Hut is the design of the store, it was designed with the expectation people would come to the store to eat their pizza or spend a couple hours. Some of the readers will remember a pizza chain saying they deliver 30 minutes or it is free. There was a number of accidents which stopped the advertisements; however, consumers want fast pick-up and delivery which was not something Pizza Hut does well.

Yum President Chris Turner says Pizza Hut has many strengths and controls 15.5% of the US pizza market down from 19.4% in 2019 according to Technomic, a food service consulting company.

The Pizza Hut team has been working hard to address business and category challenges: however Pizza Hut’s performance indicates the need the brand realize its full value, which may be better executed outside of Yum Brands.

Linking to dividend paying stocks, there is a reason why longevity is difficult in the food industry although we all have to eat. Things change, consumers change and business has to adapt or the license to print money is gone. There is money to be made, but growth rates change.

There are more questions than answers, till the next time – to raising questions.