Not everyone is pleased with the Colonel's secret recipe. The Center for Science in the Public Interest (CSPI), a consumer group, has launched a lawsuit against Yum! Brands' (NYSE:YUM) KFC unit, hoping to halt its use of cooking oils laden with trans fats. While the suit probably won't succeed, the negative publicity surrounding the trans-fat issue may be harder to quell. If they want to keep profits buoyant, KFC and its fast-food brethren should seriously consider replacing the offending oils as soon as possible.
In recent years, various interest groups have branded fast-food companies as major perpetrators in the United States' obesity epidemic. Criticism of the industry has ebbed recently, thanks in part to McDonald's (NYSE:MCD) and other players' introduction of more healthy entree options alongside their traditional fare. But the trans-fat issue threatens to bring on another wave of recriminations.
According to Wikipedia, trans fats are created when manufacturers add small amounts of hydrogen to oils. The hydrogenation process raises the oils' melting point, helping them stay solid at room temperature, which makes them easier to transport and use in cooking. Due to their altered chemical structure, the resulting trans fats have been found to simultaneously raise levels of "bad" cholesterol while lowering levels of "good" cholesterol in those who consume them.
Trans fats' harmful effect on cardiovascular health is well-established. The Food and Drug Administration acknowledged their dangers in agreeing to a separate demand from the CSPI and adopting a regulation requiring packaged food makers to report the trans-fat content in their products. That rule, which went into effect this year, prompted food producers like Kellogg (NYSE:K) and PepsiCo (NYSE:PEP) to reduce or eliminate trans fats from a variety of items.
While the FDA hasn't issued guidelines on daily trans-fat consumption, the trans-fat content in some KFC offerings seems high, based on average U.S. consumption. A three-piece Extra Crispy Combo meal, for instance, contains more than twice the trans fats an average American eats in a day.
For its part, KFC is technically correct in saying that its products are safe. In addition, it's understandable that the chain wants to be careful about maintaining a taste that appeals to consumers. McDonald's has used a similar argument to explain why it hasn't yet fulfilled a 2002 pledge to switch its fry oil.
But recent developments may make resistance to lowering trans-fat content potentially painful from a profits standpoint. With the new FDA trans-fat regulation in place, and lawsuits like the CSPI's in the air, consumers will likely become more aware of the danger of trans fats and their prevalence in many fast foods. As awareness spreads, just as Wendy's (NYSE:WEN) stands to benefit from an early stand against trans fats, it's possible that sales could suffer at KFC and others resistant to change.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
