Something amazing that's what!!!
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It may just be the cure.
Roughly one year after the sky almost fell in on Taco Bell — amid a since-withdrawn lawsuit that falsely accused the nation's largest Mexican fast-food chain of stuffing its beef with filler — the brand is going on an offensive to turn its 50th anniversary year into one for the fast-food record books.
USA TODAY was the first media brought inside Taco Bell headquarters and into its secretive test kitchen to observe and taste the breadth of the brand's attempt at self-reinvention. Among the highlights: a slew of new products, including a Chiptole-like Cantina Bell platform; a new breakfast roll-out; a new slogan and brand campaign; and one ultra-simple but culturally cool concept that could finally revive the brand: a line of Doritos Locos Tacos with shells made entirely from — you guessed it — Doritos.
Get ready to rock, Doritos-heads. You'll soon be able to turn your tongue, fingers and hoodie strings orange by eating at Taco Bell. The national rollout is on March 8, but the buzz has been building for months. A clock on Taco Bell's website is counting down the seconds until launch date of the product that it brags, has "Taco Bell on the inside and Doritos on the outside."
Wounded brands such as Taco Bell can take years to recover. What the 5,600-unit fast-food behemoth is about to try is almost unprecedented. It's making so many major changes at the same time that next to the wildly successful McDonald's turnaround of the past decade, this could rank as one of fast food's most complex turnaround attempts in decades. Its likelihood of success — or failure — rests on the head of a Doritos chip.
Two commonly ridiculed "junk" foods — the Doritos chip and the Taco Bell taco — are being rolled into one. In this case, one plus one might not equal two. For Taco Bell, it may equal millions of dollars in incremental sales. The year has hardly begun, but there's already industry chatter about the Doritos-laced taco emerging as one of the nation's top new products this year.
Take it from new-products guru Lynn Dornblaser. As director of innovation and insight at research firm Mintel, she sees tens of thousands of new products every year. But this new taco, she says, will be "one of the big successes of 2012." She calls the link-up of the snack- food and fast-food giants targeting 18-to-34-year-olds "a marriage made in belly-busting heaven." Savvy to social media, Taco Bell is even hosting a "tweet off" to determine one town that gets the new tacos delivered ahead of the curve.
Never mind that it's taking place at a chain coming off a lousy year, when same-store sales fell 2% after the lawsuit.
"Taco Bell could have a McDonald's-like year," says David Palmer, industry analyst at UBS Investment Bank. That's the same McDonald's that's been pummeling the rest of the fast-food industry with growth throughout the economic downturn.
This would be huge about-face for the chain, whose parent, Yum Brands, also owns Pizza Hut and KFC. Taco Bell, whose sales topped $7 billion last year, sees 35 million customers walk in or drive up every week. It's the nation's sixth-largest fast-food chain, ranking just behind Wendy's in domestic sales, says research firm Technomic.
Not everyone, however, is jumping on the Taco Bell rebound bandwagon. "Unemployment remains their challenge," says Steve West, restaurant analyst at ITG Investment Research. No matter what new products Taco Bell rolls out, he says, as long as unemployment is above 8% — particularly affecting the brand's target 18-to-34-year-old demographic — the chain will struggle.
Don't tell that to Taco Bell CEO Greg Creed, whose 11-year stint has been marked by a series of image-challenging twists and turns. For Creed, it's redemption time.
"This will be the biggest new-product launch Taco Bell has ever had," says Creed, who at 54, may be playing out his last chance to fix the brand.
Getting here hasn't been easy.
In the past six years, Taco Bell has faced a series of serious image setbacks. In 2006, it was hit by an E. coli outbreak that sickened more than 70 people in five states. Less than a year later, it was skewered by a viral video that showed rats running rampant in a Manhattan unit that it shared with sister brand KFC. More recently, the Centers for Disease Control and Prevention linked Taco Bell to a 2011 salmonella outbreak that sickened 68 in 10 states. Then, there's the lawsuit.
The Alabama law firm behind the lawsuit, Beasley Allen Crow Methvin Portis & Miles, isn't talking. Its lawsuit was quietly withdrawn about 90 days after it was filed. Spokeswoman Helen Taylor says the firm won't comment on the lawsuit.
The lawsuit claimed that Taco Bell's beef was made from 35% beef, and the rest was binders and extenders. Taco Bell says its tacos are made from 88% beef and the rest is seasonings and water. Taco Bell has done everything to fight back, except countersue. Creed insists that wouldn't be worth it because it would, once again, put the media focus on a negative instead of a positive. "Why go back and make it a story again?" he asks.
Public relations guru Katie Delahaye Paine says Taco Bell has little choice. "I think the question about the beef and filler lingers on," she says.
Creed says he is sick and tired of addressing the issue. He prefers to discuss Taco Bell's multiple changes in the works for 2012 and beyond:
Rolling out Doritos tacos. Two years ago, amid softening taco sales, Taco Bell approached partner Frito-Lay about helping it reinvent the taco. Frito-Lay had previously helped it develop the top-selling Beefy Crunch Burrito, stuffed with spicy Fritos. When the snack-maker came back with the Doritos Locos Taco, "it was a no-brainer," Creed says. "It was so simple. So obvious."
Especially to Frito-Lay. Doritos is the nation's No. 2 snack brand, second only to sister brand Lay's. Frito-Lay's chief marketing officer, Ann Mukherjee, is ecstatic about the link-up — and the buzz. Eat a Doritos Locos Taco, she jokes, "and you get a Doritos fix." Then, a couple of hours later, she says, "You're gonna want a bag of Doritos."
It didn't happen overnight. New machinery had to be added in four Frito-Lay plants to create hundreds of millions of new shells. A special cardboard holster was created for the taco, so customer hands aren't coated with the familiar orange Doritos cheese dust.
Test-market results around Toledo, Ohio, San Bernardino and Bakersfield have been outside the bun. About three in 10 consumers are ordering the new tacos — an enormous number for a new product. In northwest Ohio, where 14 stores are selling the new tacos, sales of Doritos Locos Tacos outnumber conventional tacos, says franchisee Don Unruh. "It's been huge," he says.
Customers keep asking if they can buy the Doritos shells and bring them home. He's refused.
One commercial airing in test markets features the true tale of 25-year-old customer Nat Christiana, who drove from Clifton Park, N.Y., to Toledo, Ohio, just to try one. There are plans to extend the line to Cool Ranch — and, ultimately, even more of the current 123 Doritos flavors worldwide.
Marty Schreiber, a handyman from Laguna Hills, Calif., purchased a Doritos Locos Taco at a Taco Bell in Lake Forest, Calif., that was test-marketing them only for the day. "I know it's kind of a gimmick," says Schreiber. "But I happen to like Doritos." He was so excited to eat the new taco, he concedes, "I even forgot to put on hot sauce."
Plopping breakfast inside burritos. Taco Bell has tried and failed at breakfast three times. This time will be different, insists Liz Matthews, senior director of food and beverage, because the chain has learned that most consumers prefer more traditional American breakfasts. "They don't want jalapeños in the morning," she says.
That's why 800 West Coast locations are selling breakfasts that have only a slight Taco Bell twist. Instead of serving eggs and sausage on English muffins, they're rolling them into burritos. And they're selling round, pop-able, Cinnabon co-creations that have the icing melted on the inside.
The chain plans to slowly roll out breakfast nationally in the next two years, Creed says. But the hours are targeted at teens, not hourly workers, so don't look for 6 a.m. breakfast. At Taco Bell, it's served at a more civilized 8 to 11 a.m.
Already on board as a regular is Eduard Eisenhauer, a CPA from Lake Forest, Calif., who stopped at Taco Bell on his daily drive into Los Angeles. "It's convenient," he says holding a customized burrito in one hand. "Eating in the car only saves a few minutes, but it seems like it saves you an hour."
Selling Chipotle-like grub. Following Chipotle's success, Taco Bell is testing a Cantina Bell line of more upscale foods made with more natural ingredients in Louisville and Bakersfield. If it's a hit, it will likely roll out nationally in 2013.
Taco Bell enlisted celebrity chef Lorena Garcia to help create the line, with entrees priced a few bucks below Chipotle.
She concedes: "It was surprising for me to hear from Taco Bell." Her goal with the Cantina Bell line: "Keep it simple."
Among the items: all-white-meat chicken marinated in a cilantro dressing, grilled corn salsa and black beans. "This will change the perception of what you can get at Taco Bell," Creed says.
Creating a slogan — with attitude. So long "Think outside the bun." That's being nixed for a more lifestyle-targeted slogan: "Live Más" ("Live More" in Spanish.)
The idea is to replace the concept of "food as fuel" with "food as lifestyle," says marketing chief Brian Niccol.
The very brand that once advised consumers to "Run for the border," and later enlisted a feisty Chihuahua to utter, "Yo quiero Taco Bell," is now advising folks to "Live Más."
Which is exactly what Jose Acosta, a twentysomething sign installer from Fountain Valley, Calif., did while on a work break with some buddies. He sat down with a tray-load of food that he bought for less than $5: a burrito, a bag of Doritos, a soft drink — and a Doritos Locos Taco, which he eats with gusto. "That's good," he says.
"Junk food" doesn't bother Acosta, he says, as he prepares to inhale the second half of his Doritos Locos Taco, then stops, smirks and offers one final thought: "Hey, at least it's got lettuce."