Will Taco Bell's Weird New Menu Really Work?
This Cinco de Mayo, you can start the party early thanks to Yum! Brands and its Taco Bell restaurant. While the chain that was made famous from its "FourthMeal" campaign doesn't have any immediate plans to serve margaritas, beginning on March 27, it will be serving the "FirstMeal" in style. Look out, McDonald's ! It looks like Yum! Brands plans to have a siesta on McDonald's turf. It should further beg the question: Is Chipotle Mexican Grill next up to start serving breakfast?
Yum! Brands to embrace its difference
It sounded a bit ridiculous at first when Taco Bell was first toying with the idea of breakfast. A Taco chain is serving breakfast. Really? It seemed difficult for the chain to get over the stigma that it makes and sells lunch and dinner sandwiches, not breakfast. It is not dissimilar to Burger King and Wendy's, both of which have struggled to make any serious dent into McDonald's breakfast stronghold. Part of the problem is the serving of "me too" breakfast sandwiches from chains that are known for their burgers.
So the logic seemed that a taco place would have an even tougher time. Yum! Brands saw and sees it differently. Instead of trying to change its image around breakfast time, it is going the opposite route and embracing the taco. It is offering items such as the Waffle Taco, Crunchwrap, the Breakfast Burrito, and the A.M. Grilled Taco
They are completely original breakfast ideas and ones that only a chain known for its delicious tacos could get away with. Admit it -- you are curious.
Yum! Brands originally only tested the concept at a handful number of Taco Bell locations with an anticipated slow rollout based on success.
Twenty-five percent of McDonald's domestic business is breakfast. If the national rollout works as well as the tests indicate, McDonald's may be in a bit of trouble.
Taco Bell domestic restaurants are already struggling to show growth, having fallen by 1.4% last quarter. But the tide could be turning. On Feb 24 Yum! announced a full national rollout only a month away. With 5,500 Taco Bells serving breakfast for the first time, it's easy to see the sort of impact a blockbuster breakfast menu could have.
Yum! Brands will be partaking in radio, television, digital, social media, and public relations campaigns all designed to make you aware, curious, and hungry for Taco Bell breakfast while steering you away from McDonald's. Yum! Brands also plans to add another 2,000 Taco Bells over the next eight years, providing further competition.
Chipotle Breakfast Grill?
To potentially rub table salt in McDonald's wounds, you can bet Chipotle Mexican Grill could be next if Yum! Brands is successful with its Taco Bell breakfast. Two of its airport locations already successfully serve this most important meal of the day. With the incredibly growing popularity of its brand, why not take advantage of the early morning hours to generate even more sales?
Don't be surprised if Chipotle Mexican Grill throws its hat into the breakfast ring right behind Taco Bell. Sorry, McDonald's.While Chipotle Mexican Grill hasn't announced any formal plans to start serving breakfast nationally, there was a preliminary hint back in April of last year that this could be coming someday. Chief executive Steve Ells mentioned at one of the two airports the company serves a Frittata that is "really, really delicious" and "very, very popular and gaining more popularity as we continue to serve it."
Foolish final thoughts
Yum! Brands plans to grow earnings by 20% of more for 2014 compared to 2013. With two-thirds of its profits in the U.S. coming from Taco Bell already as opposed to its KFC and Pizza Hut brands, breakfast could and should make or break its goals. Look for evidence, possibly from the media and definitely from Yum! Brands' conference calls, to learn how customers are responding to the breakfast rollout. If it's going well, that one meal for that one brand could make Yum! Brands a winner for 2014 and beyond.
One thing is certain, Yum! Brands Needs Taco Bell's breakfast to be a big growth driver. Fortunately you don't have to count on bizarre waffle tacos for your big money growth. Their are better options, like David Gardner's 6 Picks For Ultimate Growth. David has proved the naysayers wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.
The article Will Taco Bell's Weird New Menu Really Work? originally appeared on Fool.com.Nickey Friedman has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill and McDonald's. The Motley Fool owns shares of Chipotle Mexican Grill and McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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