Border Running Goes Gourmet
Taco Bell to recoup market share by following Chipotle
IRVINE, Calif. -- Yes, this is still the year Taco Bell will “reinvent the taco” with a cheesy Dorito shell. But it’s also the year it goes after fast-casual competitor Chipotle in a very different way: food quality.
The chain is working with Miami celebrity chef Lorena Garcia to improve its menu and bring in signature Chipotle ingredients such as black beans, cilantro rice and corn salsa. It’s an attempt to turn the behemoth-burrito peddler from a threat to an opportunity.
“Chipotle is an opportunity because what it’s done has expanded the trial and usage of Mexican food,” said CEO Greg Creed at a recent investor meeting in New York, as reported by Bloomberg. “It’s got people to believe they can pay $8 for a bowl or a burrito.”
Taco Bell can make food “every bit as good as Chipotle,” he said, and instead charge less than $5.
Since 2000, Taco Bell’s store count has decreased by more than 1,000, as parent company Yum! Brands focuses on expanding sister brands KFC and Pizza Hut overseas.
Meanwhile, Chipotle’s been what Bloomberg calls a “stock market star, its shares tripling since the end of 2009.”
“They have a tough road ahead to really reposition themselves as a direct competitor to Chipotle or Qdoba,” Mike Brumagin, a former Yum! Brands senior project manager and Taco Bell store owner, told the media outlet. Taco Bell has “always been about value,” he adds.
Of course, quick-serve restaurants have seen slow growth since the start of the recession, and Taco Bell has trailed behind McDonald’s, Subway, Burger King and Wendy’s in market share in 2010.
The chain has focused much of its efforts on targeting value-conscious males, ages 18 to 24. This customer base--along with the since-dropped lawsuit claiming Taco Bell didn’t use enough real beef to label it as such--could mean a long road ahead if the chain wants to steal share of the quality-driven customer.
Former franchisee Brumagin told Bloomberg he is also skeptical and says introducing somewhat fancier, higher-priced food could go the way of a healthy menu experiment in the mid-’90s that he called an “abysmal failure.”
In the coming months Taco Bell will “be announcing further details” about the menu and strategy, Rob Poetsch, a Taco Bell spokesman, told Bloomberg.
The strategy could be pricy, especially for franchisees who could be asked to increase their costs in order to bring in better ingredients or new equipment.