Experts: Taco Bell breakfast a serious threat to McDonald’s

Taco Bell no doubt had the attention of McDonald’s even before the brand debuted its breakfast platform last week, but its accompanying ad campaign took direct aim at McDonald’s and its dominance of the breakfast market.

For its new commercials, Taco Bell rounded up several real people who share the name of the McDonald’s brand mascot and had them try its new AM Crunchwrap sandwiches to promote “a new breakfast anyone can love, even Ronald McDonald.”

McDonald’s has responded with everything from a light-hearted retort on Twitter — which read, “Nothing beats the original #FirstMeal” — to an offering of free coffee for the next two weeks.

Several marketing experts said McDonald’s has moved to defend its breakfast turf in tacit acknowledgment that Taco Bell could potentially be a significant rival to the Golden Arches in the lone remaining daypart in which the two brands had not competed.

Taco Bell would have the morning market cornered on items like the Waffle Taco, AM Crunchwrap or Cinnabon Delights, but merely touting menu differentiation would not have been enough, said Pete Favat, chief creative officer for Deutsch LA, the agency that created the provocative campaign and “Ronald McDonald” ad. The newest player in the hotly contested breakfast business sought to make the biggest entrance possible, Taco Bell’s agency partners said.

“Breakfast is the hardest routine to shake up,” Favat wrote in an email to Nation’s Restaurant News. “People are so tired in the morning, they’ve almost preprogrammed their cars to take them to McDonald’s. So we needed something that would grab people by the lapels and make them pay attention. It had to be bigger than just focusing on the menu.”

Competitive claims are not new to quick-service advertising, but some advertising executives nonetheless praised Taco Bell’s move to go right at McDonald’s as a way to make quick-service breakfast a two-brand competition.

“It begs the question: How does Taco Bell win this when they’re talking about McDonald’s breakfast the whole time?” said Charlie Hopper, creative director for Indianapolis-based agency Young & Laramore. “But I think they got what they wanted. They got my neighbor to go try a Waffle Taco and put a picture of it on Facebook, they got McDonald’s to respond by giving away free coffee, and they look like they’re having fun.”

He added that it is a “classic move” for a brand to elevate itself and its offerings by calling out the category leader in the way that Taco Bell is doing by pitting its new breakfast platform against that of McDonald’s. But rather than an act of desperation, this campaign seems like it has been made from a position of strength, he said.

“Taco Bell is in a good position to do this right now,” Hopper said, “because I think there’s a halo from Doritos Locos Tacos, and they’re known for this fun mind-set. It’s fun to eat a Waffle Taco, and that’s a holdover from Doritos Locos, when they got everybody to indulge themselves with that product and made the brand newsworthy.”

Taco Bell has done more than just buy air time for its commercials, including getting more than 1.6 million views of its “Ronald McDonald” commercial on YouTube and running a “Breakfast Phone” campaign on Twitter that built up social chatter long before the March 27 launch, Hopper noted. “That’s kind of what makes it a two-chain race,” he said. “If Burger King or Jack in the Box tried to do it, they could buy the same amount of time for the ads, but they don’t have the following in social.”

A new breakfast landscape

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Tim Nelson, president of Chicago-based agency Tris3ct, said another revealing aspect of Taco Bell’s ad strategy and McDonald’s response has been how seriously McDonald’s takes Taco Bell’s prospects for making inroads at breakfast.

The two brands compete in every daypart, including snacking and late-night dining, which Taco Bell established with “Fourth Meal” and where McDonald’s has had some recent success extending hours to grow sales, Nelson said. Breakfast was the last place Taco Bell had not gone, he added, and the brand has the scale and marketing skill to make it a game.

“If you’re Taco Bell, you must get up every day and think how you can beat McDonald’s,” Nelson said. “Really, the last big front on which to attack McDonald’s is breakfast. What this reveals is how their strategy is very largely focused on how to take visits from McDonald’s.”

In the meantime, Nelson agreed with Hopper that Taco Bell’s advertisements have framed the breakfast daypart as a two-brand race in quick service, which might benefit McDonald’s in the near term and negatively affect other fast-food advertisers opting to stay out of the slugfest.

“In the longer term, I think Taco Bell will be the big winner,” Nelson said, noting that, even if Taco Bell does not take all the market share it plans to take from McDonald’s, it also could pick off customers from Burger King, Hardee’s or other quick-service chains that do a lot of business at breakfast.

“There’s other breakfast out there … and people are eating around just to eat around or to look for deals,” Nelson said. “Burger King’s breakfast business was wobbly to begin with, so if suddenly they’re not getting traffic in the morning they count on, it could have some real impact in the short term.”

As for McDonald’s, the new commercials from Taco Bell acknowledge that the Golden Arches sets the bar for quick-service breakfast, which might be a net positive in the short term, Nelson said. He added that McDonald’s responded appropriately, with a coffee giveaway to keep its breakfast top of mind and with a playful counterpunch on Twitter. But ultimately, he said, Taco Bell’s breakfast launch and its Ronald-theme advertisements made Taco Bell’s intentions clear.

“For all the giggles of the Ronald commercials, and the response it provoked from McDonald’s, there is something going on here, and that is that Taco Bell is a serious competitor,” he said. “They’re not there yet — more people have to get their heads around Taco Bell having something they would want for breakfast. But if they have a good offering, they could be a formidable competitor, more than Burger King or Wendy’s ever could be.”

Irvine, Calif.-based Taco Bell has more than 6,000 units. The Oak Brook, Ill.-based McDonald’s has more than 14,000 U.S. locations.

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN