Yum Brands last year launched personalized marketing campaigns driven by artificial intelligence, teasing an “AI factory” that leverages consumer data to enable its digital ecosystem. Last month, the company shared some early results from inside the factory, which helped send more than 200 million AI-generated communications that have been up to five-times more effective compared to traditional approaches, across KPIs including frequency and return on ad spend.
“Across the organization, AI is supercharging our marketing,” Yum CEO David Gibbs said on the company’s Q2 2025 earnings call. “This is not just marketing evolution, it's a revolution, and we're only getting started.”
To take part in that revolution, Yum has worked to build a foundational framework for AI, both at the parent company and at subsidiary brands including Taco Bell, KFC and Pizza Hut. Central to that foundation is a yearslong effort to harness the massive amounts of first-party data, which is now centralized in a consumer data program called Red360. Yum has over 140 million highly qualified, permissioned names — complete with transaction history — in Red360, about half of which come from Taco Bell.
“We believe one of our strongest competitive advantages is our scale, and we believe that shows up if you look at all of our brands,” said Cameron Davies, chief data officer at Yum, in an interview.
Yum’s overall AI strategy is focused on three pillars of where the technology shows up: in interactions with consumers (in communications and the drive-thru, for example), as part of the company’s Byte suite of software solutions (which powers inventory and scheduling) and above-store operations. Davies compared the executive use of AI as analogous to the embrace of smartphones during a previous era marked by pages and BlackBerry devices.
“You can't imagine life without [your smartphone], and we believe that's where gen AI sits,” the executive said of technology that is already being used to push productivity at the corporate level.
Live más with AI
Yum sees AI-driven marketing efforts as a way to further optimize a digital ecosystem that accounted for 57% of the sales mix overall for the company. Separating out Taco Bell, digital accounted for 41% of the mix in Q2 2025 — a record high for the brand. During this period, AI-powered efforts helped boost CRM frequency and in-app recommendations for Taco Bell, per details shared by Yum. In other words, digital success for Taco Bell comes from working in close partnership with its parent company and truly embracing technology.
“One of the greatest gaps for brands is having capabilities, but not necessarily being really prepared to drive and champion change,” said Dane Mathews, chief digital and technology officer at Taco Bell. “Technology is going to power the relationships that consumers have with brands, period.”
Taco Bell has worked to build technologies that meet a fervent consumer base that seeks to experience, be part of and amplify the brand. Adding Yum’s AI infrastructure and technological tools to that approach accelerates the brand’s learnings as it looks to communicate relevantly on a one-to-one basis.
“AI is helping us do that and helping us make progress,” Mathews said. “Then we're just moving across surfaces, across channels, whether it's apps, kiosk or drive-thru … really trying to strengthen and grow the relationships with our fans.”
At Taco Bell, AI seen as a way to drive business needs — not as a technology to use because it is buzzworthy among marketers and executives. The brand is using the tech on the “nitty-gritty” work overseen by brand marketers and digital marketing teams. For example, AI is beginning to power the brand’s content workflow, as well as help creative teams “expand the aperture” on their work, Mathews explained. But truly unlocking AI’s full potential requires transformation.
“If this really is going to change everything, that means all of marketing has to change. It means our mental models on how consumers engage and what they engage with has to change,” Mathews said.
To help bring about that change, Taco Bell and Yum have worked to let go of assumptions through testing and experimentation. AI allows the company to test data sets in customer communications and quickly integrate learnings into its models. From there, Yum has the advantage of being able to apply learnings and models across its portfolio.
“Only the marketers that stick with [AI] that … can structure their learning around experimentation are those that are going to win,” Mathews said. “That's the telltale sign of a transformation happening at scale.”
To in-house or not in-house
In the last few years, Yum has aggressively acquired and partnered with companies that make up its digital, AI-powered ecosystem. Determining whether to use in-house technology or not has been enabled by a filter that assesses if there is existing tech that can do the work better than Yum could in-house, if Yum is doing something unique with the tech and who can do the work faster and cheaper.
For example, Yum has an internal consumer intelligence engine that uses Red360 data to personalize upsell offers on digital kiosks; it was cheaper and faster for Yum to handle that internally. But on email and SMS personalization efforts, Yum partnered with OfferFit, a company recently acquired by customer engagement platform Braze, because OfferFit had already built a reinforcement engine that it would take Yum several years to build on its own.
That agnostic approach to in-house or external partnership has allowed Yum and its brands to solve for business problems and focus on an AI-powered flywheel that revolves around data, algorithms and experiences.
“This isn't just about AI, it's not just about digital. It's about how that all works together with great food and great operations,” Davies said. “That's why we're using it. It's not about just being cool with gen AI — it's about how it fits together in the overall strategy.”
