Web Exclusive | March 2015 | By Barney Wolf

Taco Bell Is At It Again

New Biscuit Taco part of ongoing innovation efforts at Yum! Brand.
Quick service restaurant giant Taco Bell innovates breakfast menu with biscuit taco.
image used with permission.

Brian Niccol is a man on a mission. In the nearly two years since Niccol was tabbed as Taco Bell’s president, and in the three months since he became chief executive, the Mexican-inspired quick-service restaurant chain has been an innovation engine for its parent company, Yum! Brands.

Last year alone, the division launched breakfast nationally, began a mobile ordering and payment application, added menu items like Quesaritos and Power Bowls, rolled out its dollar menu, and debuted a fast-casual brand, U.S. Taco Co. and Urban Taproom.

More is on the way, such as this week’s launch of a new breakfast platform, the Biscuit Taco, which is replacing the Waffle Taco on the morning menu.

“We have been on a mission to be not just a restaurant brand, but a cultural brand,” Niccol says. “With food, fashion, music, sports, technology—we are innovating in all those areas, while staying true to Taco Bell.”

The Irvine, California–based company’s brand positioning has been aimed directly at Millennials. That continues with a new ad campaign titled “Routine Republic,” set in a Soviet-style dystopia and complete with several less-than-subtle jabs at quick-service breakfast leader McDonald’s. Young people are shown escaping the conventional breakfast sandwiches and switching to Taco Bell’s hexagonal A.M. Crunchwraps or Biscuit Tacos.

The taco-shaped biscuits are filled with eggs and sausage or bacon, or they are packed with a new crispy chicken fillet topped with honey jalapeño sauce or country gravy. The marinated white-meat chicken, breaded in tortilla chips, also will be available for a limited time throughout the day in burritos and quesadillas.

“We’ve taken the traditional chicken biscuit breakfast and added just a touch of foodie culture with the honey jalapeño,” Niccol says of the morning taco.

“When Taco Bell is best is when we give people an unexpected approach to a known experience.”

Taco Bell’s breakfast items account for 6 percent of the chain’s total sales, and “we plan on growing it from there,” the CEO says. The Biscuit Taco represents “the first real platform addition to the breakfast menu” since the national launch a year ago.

This latest tweak to Taco Bell’s menu follows the creation of all-day items like the Quesarito, a combination quesadilla-burrito that added a sriracha version this year. A quesadilla-chalupa mash-up, the Quesalupa, is now testing in the Toledo, Ohio, market.

Meanwhile, Taco Bell hopes to parlay the success of its Doritos Los Tacos by rolling out the Fritos Taco—a Fritos shell with chili inside—later this year. And Cap’n Crunch Delights, which are doughnut holes covered with Cap’n Crunch Crunch Berries cereal, are in tests.

“When Taco Bell is best is when we give people an unexpected approach to a known experience,” Niccol says.

Food innovation is a key component of the company’s culture, he adds. “It comes from listening to the feedback from customers. Not every idea is a great idea, but if you learn from it, you may have something.”

But featuring fast, affordable, and innovative Mexican-inspired food is only part of the company’s overall branding success. It also involves tapping into Millennials’ lifestyle.

“We have created a brand that is a category of one that has really grabbed hold of the Millennial spirit and taste buds,” says Niccol, a former marketing chief. “We are really excited about how we are positioned and getting people to champion the brand.” That extends to a program that helps older team members get their high school diplomas.

Taco Bell’s firm commitment to its base is a big reason for its success, says Julia Gallo-Torres, senior food service analyst in Chicago for market research firm Mintel.

“You know who they are targeting, and it’s Millennials,” she says. “These consumers like the experience of dining out but they don’t like to sacrifice flavor or price.” The cost factor is important, especially with younger members of this age group.

Millennials are more diverse than earlier generations and are interested in ethnic foods, which helps even the mainstream Taco Bell items, she adds. And while Millennials are more attuned to healthier dining options, Taco Bell’s indulgence doesn’t turn them off.

“Taco Bell’s not afraid to take chances, and it features new, exciting, novelty items on a regular basis,” Gallo-Torres says. “No one is pretending the food is healthy or good for you, but it tastes good and it is different. It always will surprise its base.”

Although more food innovations are on the way at Taco Bell, Niccol says, there are no plans to expand U.S. Taco. Instead, there is a growing effort at Taco Bell to get food to customers more quickly and when they want it via mobile ordering, catering, or delivery.

More than 2 million customers have downloaded the mobile app, allowing users to customize orders. Catering is being tested in Houston, and delivery is expected to begin in some markets sometime during the second half of the year, he adds.

“There’s no reason why all of that can’t be frictionless,” Niccol says. “We aim to make it very easy.”

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