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Exporting Western Diets: Yum Brands' Fast-Expanding Global Fast-Food Empire

Yum Brands' (YUM) recent opening of the first Taco Bell in India (paneer and potato burritos!) highlights a little known fact about the proliferation of American fast food around the world. Despite McDonald's (MCD) untouchable dominance in the US, Yum Brands, which owns Taco Bell, KFC and Pizza Hut, has the biggest and fastest-growing global fast food empire, especially in developing countries.

Last year, the company opened 1,400 new restaurants outside the US, giving it a total of 37,000 in 110 countries, something Yum executives have been crowing about a lot lately. The company is particularly proud of its inroads in places like China and India. Yum's CFO Rick Carucci recently boasted that his company has twice the number of restaurants in emerging markets as McDonald's.

And the surprising thing about all this is that, while Americans might snicker at the idea of Indians -- who have a robust culture of savory food -- eating at a place like Taco Bell, the fact is that most people in developing countries can't wait to eat more American pizza, burritos and fried chicken. On opening day for the new Taco Bell in Bangalore, customers waited in line for more than a hour. Yum says the place has since been drawing 2,000 to 2,500 customers a day.

It's no secret that developing countries have always had a reverence for the splendorous abundance of American culture and, even in the age of obesity, that apparently still applies to American fast food.

Yum Brands' biggest success story is China, particularly with KFC, which opened 500 new Chinese outlets last year (another 500 are planned for this year). For the year, the company's operating profits for the China region, which includes Thailand and Taiwan, were up 23%, a huge boon when US operating profits rose a mere 1%.

Nutrition experts will no doubt have a few thoughts about whether all this is a good thing. A migration to fast food, after all, means an the adoption of the Western diets so often criticized for contributing to chronic disease and weight gain. And it spells trouble for the future of home cooking and traditional foods.

It's certainly not good news for Indians who may be already trying to watch their weight that the Bangalore Taco Bell is offering free soda refills -- a fast-food first for the country. Since per capita soda consumption is down in the US for 11th straight year, I guess somebody's got to drink the stuff.

In addition to the peneer and potato burrito, the restaurant has adjusted its menu to sell potato tacos to the mostly vegetarian customers. Now of they could just get them to pronounce quesadilla....

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