Healthier Fried Chicken at KFC?
By Alyce Lomax (TMF Lomax)
The Motley Fool (investment website), October 30, 2006 http://www.fool.com/News/mft/2006/mft06103042.htm

With the furor over trans fats, nobody is likely to be surprised that Yum! Brands' (NYSE: YUM) KFC has added its name to the list of restaurants stripping trans fats out of its menu items.

The fast-food company has said that its signature fried foods will no longer include the unhealthy fats. By April 2007, the fried menu items in all 5,500 of its restaurants will be prepared with low-linolenic soybean oil, which contains zero trans fats. However, not all of its items will be trans-fat-free -- the formulation of its biscuits, which aren't fried, won't be changed as of yet.

Trans fats raise levels of "bad" cholesterol, and the fight against them has been well publicized. Last summer, the Center for Science in the Public Interest, or CSPI, filed a lawsuit against KFC pertaining to the use of trans fats in its foods. Fool contributor Brian Gorman has covered this issue frequently -- he looked at the original lawsuit against KFC and at Wendy's (NYSE: WEN) having taken the opportunity to eliminate trans fats early in the game. In the same spirit, Disney (NYSE: DIS) recently moved to convert its theme-park food to healthier options. And of course, McDonald's (NYSE: MCD) has also made many moves toward providing healthier menu options.

Meanwhile, not just fast-food establishments are facing criticism from the CSPI. Starbucks (Nasdaq: SBUX), with an ambiance quite different from many of the names noted above, was also criticized for serving up the fattening items.

In an interesting aside, the company that provides the Vistive brand of low-linolenic soybeans is none other than biotech giant Monsanto (NYSE: MON). Monsanto put out a press release applauding KFC's move, while KFC said it is working with several possible suppliers, including Monsanto, to secure its oil. Known for genetically modified agricultural products, Monsanto says that Vistive soybeans are grown through conventional breeding techniques, but critics say that's a bit misleading because they still contain the Roundup Ready trait.

Connections to GM foods make this an issue that could, at some point, become controversial, since some people believe that GM foods might prove dangerous in their own right. Of course, it seems unlikely that the people who police their diet against GM foods are the same consumers who frequent fast-food establishments such as KFC, Wendy's, and McDonald's. (In a news conference, KFC President Gregg Dedrick said he didn't know whether the oil would contain GM soybeans).

Given developments like New York City's hearings on banning trans fats in restaurants (talk about the fat police!), I'd have to say it's best when companies voluntarily assess how their brands might be affected if they don't address such concerns. Policies of labeling foods' nutrition content lend transparency to the issue. And, of course, consumers should educate themselves on their food choices as well -- talk of bans always means choices are being made for people, and some of this is certainly reminiscent of the media furor over whatever the latest trendy health "epidemic" is.

On the other hand, given the recent high profile about trans fats and their ill impact on health, it's logical that companies like KFC would do their best to get ahead of any problems, whether from public backlash, lawsuits, or legislation.

Starbucks and Disney are Motley Fool Stock Advisor recommendations. Sign up today, and we'll send you a free market report.

Alyce Lomax owns shares of Starbucks. She is currently ranked 2,393 out of 11,823 in CAPS. The Fool has a disclosure policy.

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