Greenpeace recently discovered a key ingredient in KFC's secret recipe: Indonesian rainforest fiber. In fact, KFC's disposable packaging is driving the destruction of this critically important ecosystem, harming its people, accelerating climate change, and threatening wildlife such as the last remaining Sumatran tigers, elephants, and orangutans. Consequently, Greenpeace has joined other environmental organizations such as the Dogwood Alliance by launching a campaign against KFC and Yum! Brands -- the owner of the KFC, Pizza Hut, and Taco Bell chains.
Image courtesy Scott Quaranda
My buddies and I at the Dogwood Alliance, a North Carolina forest protection non-profit, decided the time had come to speak truth to the One Percenters, so we drove to Louisville, Kentucky, to crash Yum's annual shareholder meeting on May 17th and take advantage of the one time each year that Yum's CEO Robert Novak and his Board of Directors have to shut up and listen to rants from nobodies like me -- at least until my allotted 90 seconds were up.
Greenpeace's discovery follows a rising tide of concerns about the fast food industry in general. Nevertheless, this industry continues to rake in mind-boggling profits. For example, McDonald's now proudly serves 68 million customers in 119 countries each day, and did so well in this year's first quarter that they returned $1.5 billion to their shareholders. Things are even yummier at Yum! Fueled by the performance of the 1,561 new restaurants they opened outside the U.S. in 2011, they made over $12 billion last year, and their 2012 first-quarter income rose by a whopping 73%.
When we arrived at Yum's Conference Center on 1900 Colonel Sanders Ln, we were greeted by a band of squeaky clean and cheerful employees at the welcome tent. After our documentation authorizing us to attend the meeting on behalf of some actual shareholders was approved, several "handlers" ushered us into the building. We cleared their airport-level security system, forked over our electronic devices, and were escorted into a room containing banal corporate propaganda, employee awards for such accomplishments as "Thinking Outside the Bucket," cheap eats, and bad coffee.
At 8:50 am, our handlers led us to our seats within a conference room that felt like, well, a fast food joint. A scary-looking man in a fancy suit glared at us as if we were going to try to Occupy The Building or steal the Colonel's secret recipe. Another guy stood in a corner behind a tripod, filming our every move. The company's motto ("Alone we're Delicious. Together we're Yum!") was splayed across the walls above triplets of Pizza Hut, Taco Bell, and KFC icons. I wondered when was the last time any of the Yum brass ate at one of these restaurants, and if any of them had really found the food delicious.
At precisely 9:00 am, Robert Novak, his secretary, and his Board entered, stage right. Mr. Novak sat down behind a desk 20 feet in front of us, and his Board sat in a roped off section to our left. His secretary briskly reported the pro forma results of this year's two shareholder proposals: Yum would not be adopting the recommendation that their Board's chair be an independent director, so Mr. Novak would be retaining this position for yet another year. And despite the enormous environmental and social impacts of the palm oil used in their supply chain, the company would not be adopting the recommendation that they implement a sustainable palm oil procurement policy.
I could see why the shareholders and Mr. Novak (who is also the company's largest shareholder; at the close of 2011, his 2,438,820 shares were valued at $143,914,768) wanted to stay the course -- under his leadership, in the last decade, Yum's shareholders have enjoyed a 445% cumulative return on their investment. And I could see why the shareholders had overwhelmingly approved retaining Mr Novak's compensation formula, which netted him nearly $30 million last year.
Finally, the moment we'd been waiting for arrived: Q and A. A handful of people stepped up to the mic to yuck on Yum's parade. One man was outraged by the company's lobbying last year to allow customers to purchase their products with food stamps (they have since abandoned that effort). A woman spoke passionately about the gruesome treatment of the chickens that end up in KFC's buckets. Another woman from the Rainbow Push Coalition highlighted Yum's poor track record with minorities. A Dogwood staff member talked about some of the stories he'd heard from the people whose lives have been destroyed by the logging practices of the giant paper companies that supply the raw materials to make KFC's buckets and other paper products. Another spoke about the growing momentum of their on-the-ground campaign protesting KFC's environmental practices, and spelled out the simple steps Yum could take to end Dogwood's protests.
When it was my turn, I put on my Ph.D. ecologist hat, took a deep breath, and looked Mr. Novak in the eyes. I told him about how much I love our southern forests. I discussed the ecological horrors caused by logging our endangered forests, clearing and draining our coastal forests and wetlands, and converting our diverse natural forests into monocultures of toxic industrial pine plantations. I concluded by reminding him that the Sustainable Forestry Initiative Yum uses to "certify" their paper products is widely viewed by the scientific and environmental communities as a green-washing corporate front, and that it was high time to switch to the far more credible Forest Stewardship Council.
When the last speaker was through, Mr. Novak and his Board beat a hasty retreat out the side door, and their security team stepped forward. However, in an apparent about-face to their previous practice of ignoring Dogwood (except when they banned them from attending a Sustainable Operations Summit last month in which their Chief Sustainability Officer was speaking), Mr. Novak told the Dogwood team to talk to Jonathan Blum, Yum's Chief Public Affairs Officer, and to their pleasant surprise, before disappearing, Mr. Blum actually gave them his number and said "Let's talk."
Other fast food companies have shown that it is possible to be greener and still make a handsome profit. Time will tell what it will take to finally convince Yum and other corporate laggards to follow suit, and what if any difference our little speeches at that shareholder's meeting made. But I can say that this was the first time I've ever spoken to someone who makes as much money and wields as much power as Robert Novak does, and that I found the experience of giving him a little piece of my mind surprisingly gratifying.