Taco Bell and Alcohol Might Not Mix Well

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Yum Brands Restaurant Locations Ahead of Earnings Figures
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There will be something different about a new Taco Bell that is set to open in Chicago's Wicker Park neighborhood this summer. Parent company Yum Brands (YUM) has confirmed that the eatery has applied for a liquor license, a move that would make it the first Taco Bell to serve up stronger beverages than Mountain Dew or packets of Sriracha.

A look at the proposed menu shows where Taco Bell is heading. There will be a couple of draft beer options, but the more interesting nugget is what the chain is calling Twisted Freezers. They are essentially the chain's existing slushie-style beverages spiked with vodka, tequila or rum.

This doesn't mean that folks will eventually be able to get their drink on at any Taco Bell. This is a unique situation in a location that requires standing out. However, if it is successful -- and that is certainly possible given the attraction of millennials to Taco Bell -- it wouldn't be a surprise if Yum Brands follows through at other locations.

Getting the Last Laugh

Taco Bell's move has raised more than a few eyebrows. Even Saturday Night Live got in on the fun during this past weekend's season finale.

"It was reported that a Taco Bell in Chicago may soon start selling alcohol, which is weird because usually it's alcohol that sells Taco Bell," Michael Che said during the show's Weekend Update segment.

Then again, having a new product offering skewered by Saturday Night Live can be a good thing. The show came down hard on Taco Bell when it rolled out Doritos Locos Tacos three years ago, suggesting that it's Taco Bell's way of saying, "We hate you!"

Taco Bell has gone on to sell more than a billion of the tacos served on Doritos-dusted shells.

Taking a Page Out of the Chipotle Playbook

Fast food and stiff drinks don't traditionally go hand in hand, but Chipotle Mexican Grill (CMG) -- a chain that Taco Bell has tried to emulate in rolling out its Cantina and Fresco lines that up the ante on quality ingredients -- has been serving alcohol for years.

Chipotle offers beers, and two years ago it began rolling out margaritas at more than half of its restaurants. The premium beverages are made with Patron silver tequila, triple sec, agave nectar, and fresh lime. They cost about as much as a Chipotle burrito.

You don't see a lot of people getting buzzed at Chipotle. Customers tend to opt for cheaper sodas or water. However, just the fact that harder options are available helped reposition the brand.

We will see what Taco Bell does with this. Unlike Chipotle, customers associate Taco Bell with cheap sustenance. A buck can go a long way at Taco Bell, and obviously the same pricing won't apply to hard beverages.

Things could backfire. Lax cashiers might wind up serving alcohol to underage customers. Buzzed patrons could wreak havoc. There's a reason most fast-food chains avoid alcohol altogether. However, since casual-dining and fast-casual concepts specializing in Mexican food tend to have alcohol offerings, it's a risk that Yum Brands is willing to test out this one time. We'll see where it stands after the new Taco Bell is at it for a few weeks.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days, and check out The Motley Fool's one great stock to buy for 2015 and beyond.
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