Taco Bell’s Waffle Taco is finally coming.
Two years after the quick-service chain began testing “First Meal,” Taco Bell will roll out breakfast to all participating U.S. restaurants on March 27, marking the biggest menu expansion in its 50-year history.
Breakfast is currently available in about 900 Taco Bell units, still mostly in the West, but the chain said it's ready to add the daypart to about 5,500 participating locations within its 5,800-unit domestic system nationwide. The Irvine, Calif.-based chain first began offering breakfast in early 2012 in a soft test in about 750 units in 10 states.
“Our mindset is: We’re not just getting into breakfast; we want to win at breakfast,” said Taco Bell president Brian Niccol.
Taco Bell’s breakfast menu will be anchored by products that have already generated considerable buzz. The headliner will be the Waffle Taco, filled with either bacon or sausage, and scrambled eggs and cheese, served with syrup in a portable package for eating on the go.
The A.M. Crunchwrap, Taco Bell’s version of a breakfast sandwich, packs scrambled eggs, a crispy hash brown, melted cheese, and bacon, sausage or steak into a griddled tortilla. Easily eaten with one hand, the item taps the success of its later-daypart cousin, the Crunchwrap.
Cinnabon Delights, mini cream-filled cinnamon-sugar doughnuts, were so popular in tests that the chain already rolled them out systemwide last year.
The company said it would unveil recommended pricing with the rollout in March.
Niccol declined to disclose sales at units that currently offer breakfast, but, he said, “It’s highly incremental.”
In addition to the core products, the breakfast menu will include various breakfast burritos and grilled tacos, a Sausage Flatbread Melt, hash browns and a number of $1 value items, Niccol said.
Although the chain tested Seattle’s Best Coffee earlier, it selected a non-branded supplier that will produce a proprietary roast and brew. Each cup of coffee will be made fresh to order using single-brew technology, and all units serving breakfast will add new coffee machines.
Restaurants will open for breakfast by at least 7 a.m., though many locations will open even earlier depending on demand, Niccol said. Others may not offer breakfast hours at all where it doesn’t make sense, like units in malls.
The rollout will be accompanied by a marketing campaign that will include television, in-store marketing and radio, along with digital, social and public relations efforts.
Taco Bell is at a high point, boasting a 3-percent same-store sales increase for fiscal 2013, lapping an 8-percent increase the prior year. The addition of breakfast will be a key driver in its quest to double sales from $7 billion last year to $14 billion by 2022, Niccol said.
Roughly one year into that plan, Taco Bell has already added close to $1 billion in sales, largely on the success of its wildly popular Doritos Locos Tacos line, introduced in 2012, which Niccol said has “reinvented the crunchy taco.” More Doritos-inspired flavors are expected later in 2014.
This year, Taco Bell also intends to “reinvent the burrito” with the expected debut of the “Quesarito,” a burrito wrapped with a quesadilla, which is in test in Oklahoma City. “It’s a killer product,” said Niccol. “It’s lighting it up.”
Continuing with Cantina Bell
The chain will also add new items to its premium fresh-Mex Cantina Bell menu later this year. That menu, created with celebrityLorena Garcia, now accounts for about 4 percent of sales, Niccol said.
And Taco Bell is promising more aggressive growth. The chain opened about 115 units in 2013 and plans to double that in 2014, with mostly franchised openings.
The chain aims to add about 2,000 more restaurants over the next five to seven years, focusing on rural areas and urban sites, said Niccol. Later this year, the chain will introduce a new in-line design with no drive thru and a smaller footprint for city locations.
A key aspect of growth, however, will be winning all dayparts, Niccol said.
“We’re famous for late night. We’re becoming famous for Happier Hour, and the good news is people still love us for lunch and dinner,” he said. “But one place our customers keep asking us, ‘Why aren’t you there?’ is breakfast.”
Breakfast is seen as a huge growth opportunity for the restaurant industry overall, particularly for quick service, as a growing number of Americans dine out for their first meal.
The morning daypart is estimated to account for about $45 billion to $50 billion in annual foodservice sales, about 10 percent of the industry overall, according to market research firm Technomic Inc. Taco Bell, however, with 5,800 U.S. locations, is going up against the Goliath of McDonald’s, with more than 14,000 domestic units.
The Golden Arches rules at breakfast by far, with an estimated $9 billion in annual sales during morning hours, according to Technomic. In a recent survey, 62 percent of consumers said they visit McDonald’s for breakfast at least once every 90 days. Burger King and Dunkin’ Donuts ranked a distant second, each with 29 percent of such visits, respectively.
Still, Niccol argued that Taco Bell will bring something new to the quick-service breakfast landscape: innovation.
“The best thing I’ve seen is an egg white, as far as breakfast innovation goes,” he said, referring to McDonald’s Egg White Delight McMuffin, introduced last year. “I think we can do for breakfast what we did for the crunchy taco.”