Taco Bell to Offer More Sweet Treats

NEW YORK (AP) -- Taco Bell wants to become a destination for snack-starved younger people, not just a place to get burritos for lunch or dinner.

The Mexican-style chain plans to announce this week an expansion of its sweet treats menu, with the addition of churros and cookie sandwiches to its current lineup of cinnamon twists and caramel apple empanadas. And in coming weeks, it will beef up its offering of savory snacks with the introduction of its "loaded grillers," which are nachos, chicken or loaded baked potato wrapped in a tortilla.

Taco Bell is owned by Yum! Brands (NYSE: YUM  ) , which also owns KFC and Pizza Hut.

There's a grand scheme behind the new menu additions; by early next year, Taco Bell plans to launch a "Happier Hour" TV ad campaign touting its snack offerings.

The move follows a broader trend in the fast-food industry, with companies trying to find new ways to attract customers at all hours of the day. McDonald's (NYSE: MCD  ) , for example, has seen great success in recent years in large part because of the introduction of its snack wraps in 2006, specialty coffee drinks in 2009 and fruit smoothies in 2010. Burger King (NYSE: BKW  ) followed suit this year with its own snack wraps, specialty coffees and smoothies, and Wendy's (Nasdaq: WEN  ) is testing specialty coffees in select markets.

Attracting customers to restaurants during those between-meal hours has become a critical way to drive sales, because chains have to pay for fixed costs such as electricity and labor anyway. The strategy is particularly relevant for Taco Bell, because its younger customer base tends to snack around the clock, said Brian Niccol, Taco Bell's chief marketing officer.

"They are on a timeless eating schedule," he said.

This photo provided by Taco Bell shows some of the snacks the company aims to introduce this week. (AP Photo/Taco Bell)

Earlier this year, the company also began testing a breakfast menu in select markets. Taco Bell says the breakfast menu -- which it refers to as "FirstMeal" -- could go national by 2014. It already touts a "FourthMeal" for those craving a late-night hit of junk food.

For now, Niccol said customers are ordering the cinnamon twists and caramel apple empanadas more as desserts to go with meals. But by early next year, Niccol said the sweet treats will be marketed as snacks for any time of day, perhaps to go along with one of its specialty drinks.

The more aggressive courtship of junk food-loving younger people comes even as Taco Bell also seeks to expand its customer base with its higher-end Cantina Bell bowls and burritos, which executives have said bring in more women. In the third quarter, Taco Bell said the new Cantina Bell items helped lift sales at restaurants open at least a year by 7%.

Without naming Chipotle Mexican Grill (NYSE: CMG  ) , Yum! Brands President Richard Carucci said in a conference call with investors last month that fast casual chains taught the company an important lesson: That people are willing to spend more money for higher-quality food, if it can be delivered quickly and conveniently.

As such, Taco Bell will also announce plans to extend its Cantina Bell line, with a test of a steak quesadilla for $4.99 in Charlotte, N.C.

For its core menu, it will launch "XXL Steak Nachos" for $5.99. In Dayton, Ohio, it will start testing a "smothered burrito" with red sauce that will cost $2.99 for beef, or $3.99 for chicken or steak.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2100557, ~/Articles/ArticleHandler.aspx, 7/30/2014 1:27:22 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement