The big interview: Some like it hot

The big interview: Some like it hot

Fast food may have cleaned up its act to a certain degree, but in general it still suffers from a poor perception – a pile ‘em high, flog ‘em cheap image that hardly sits well with environmental or anti-obesity agendas. But the American chain Taco Bell, with its prolific array of Mexican-influenced meals, comprised of its core offerings of tacos, quesadillas, nachos and burritos, is growing on an apparently insatiable global demand for all things spicy.

Add in another key element – affordability – and the company, part of Yum Brands, seems to be on to a sure-fire winner, certainly when compared to its more mostly expensive Mexican food rivals, such as the now troubled Chipotle chain. Like-for-like revenue sales at Taco Bell grew by 4% last year, outstripping both its fellow Yum Brands, KFC, which grew by 3%, and Pizza Hut, which had flat sales.

In Britain, where Taco Bell launched eight years ago, the chain is a relative tiddler. It has just 24 restaurants, all of them entirely owned by various franchisees, compared to 7,000 in America. Moreover, it has no presence in trend-setting London. As Gault emphasises, it is about doing more with less and differentiating itself from fast-food rivals by using social media to woo young millenials though fashion, music and the arts. “We are a global brand, yet one that is essentially operating in a start-up environment,” explains Ellen Gault, head of marketing for Taco Bell in Europe.

This brings considerable challenges, she admits. Yum aims to open a total of 350 Taco Bell restaurants in Europe by 2022, with a 100 of them in Britain. Currently, relatively low restaurant numbers in Europe compared to the US, where the group was originally established 56 years ago, means lower supply volumes as well as lower budgets and resources. “It’s a bit of a juggling act,” admits Gault, a young Australian, who previously worked for an Australian pizza chain. “We’re a new brand that must educate consumers about our products and their relevance to them.”

In other words, Gault and her team have to make maximum noise on minimum budget. It has taken some of the basic ingredients of Mexican cuisine favoured by immigrants to the US and in the words of one restaurant critic, endlessly recombined them “to create a changing kaleidoscope of fast food”. The menu is constantly updated and, as Gault stresses, “tweaked” to appeal to local tastes in various regional markets.

The company also boasts that nearly three quarters of its menu options are less than 500 calories. Weight watchers can customise their menu options to what Taco Bell terms its ‘Fresco Style’, which eliminates mayonnaise, cheese sauces, sour-cream and guacamole in favour of less fattening freshly-prepared pico de gallo – a type of salsa.

Again, customisation is at the heart of Taco Bell’s recent British launch of chicken nachos in March. They are crispy chicken pieces incorporated into a nacho chip with cheesy sauce dip, albeit essentially a spicier version of the naked chicken chip offered to customers in America. Basically, five chicken nachos served with a warm nacho cheese dipping sauce can be purchased from Taco Bell restaurants for just £1.99. Another new innovation is a £6.69 box containing chicken tacos, a crunchy taco, a regular side, a regular drink and churros with dulche de leche sauce. “We tailored it to the local market,” Gault explains. “There is definitely an appetite for something different out there. We also want to provide craveable food at good value.”

Adapting American favourites to local markets appears to be a strategy that is paying off. In little over a month, the sale of chicken nachos now accounts for 15% of all Taco Bell’s menu sales in Britain. The same holds true of other European regions. In Finland, where Taco Bell launched last year, there is considerable demand for meat-free protein, something that Taco Bell has had to incorporate into its own menus. As a result, Taco Bell found a local partner to source a meat-free protein for its customers. “It was non-negotiable for us in the Nordic market,” Gault says, “whereas in the UK demand for meat-free, or even gluten-free, is not as developed as it is over there.”

But it is one thing to create “craveable” global food relevant to local tastes and another to drive that message across when budgets are limited. To this extent technology is providing Taco Bell with many of the answers. Like many fast food chains, many of Taco Bell’s products appear to have been designed to be shared on Instagram. But brands such as Taco Bell and Starbucks seem to be going a lot further by creating a whole lifestyle around their offerings.

As Gault acknowledges, the creation of a cool, edgy lifestyle brand is not something with which fast food brands are readily associated. It tends to be something associated with premium brands such as Absolut Vodka and high-end car manufacturers. “We have a generation that has grown up online – family and friends who communicate with each other and with their favourite brands,” Gault says. “This is what we at Taco Bell have identified and are incorporating into all our strategies because this is where the world of brands is heading.”

Creating the right image has also involved Taco Bell teaming up with another brand. It recently partnered with Mountain Dew, a carbonated citrus flavoured drink made by Pepsico, on social media with a prize on offer to social media influencers. It also hosted a skateboarding competition in Barcelona last year for Taco Bell fans.

In the UK market, Taco Bell worked with fashion retailer Forever 21 to produce a range of fashionable clothing aimed at millennials, with slogans based on its various sauces. It was the company’s first ever retail collaboration, using its own iconic graphics on pieces of clothing that included cropped sweatshirts, tops and bodysuits. “We often think of Taco Bell as ‘the fast fashion of food’, so we knew the partner for our first-ever retail collaboration had to be the leader in actual fast fashion,” said Gault at the partnership launch last autumn. It pressed all the right buttons in terms of originality, creativity, affordability and fun, she added.

Taco Bell’s own research, unsurprisingly, reveals that people want more transparency from their brands. They also expect more but don’t want to pay more. There is also another factor to be taken into consideration – what Gault refers to as the increasingly “blurred boundaries” between quick service restaurants (QSR), casual dining and even fine dining, all fighting, she says, for “share of stomach”. “We all have to be more creative and innovative. We have to embrace technology and convenience, which will impact the way customers access your food and brand.”

This inevitably means home delivery. Taco Bell has teamed up with Deliveroo in half of its restaurants to deliver its meals to people’s homes. While aggregators such as Deliveroo allow more people to enjoy the Taco Bell brand, there are a number of important considerations involved. “We have to make sure we deliver to the same quality and consistency as we do in our restaurants. There are a lot of checks and balances needed to get it right.”

But getting it right also includes opening a further 76 new restaurant sites in Britain. So far, its biggest presence is in Yorkshire. Its most recent opening have been in Glasgow late last year, and in Liverpool earlier this year, where a further three more Taco Bells are planned. But why not London, where so far Taco Bell has no presence? Surely this is an omission that must be rectified. “QSR is highly competitive,” says Gault. “There is lots of choice in London, but the UK is much larger than just the capital city. We need to keep an eye on the entire country and not be too dictated to by London.”

While Gault does not preclude an eventual London presence, even with its exorbitant rents and rates, were the prospects right, Taco Bell seems more focused on other UK metropolitan regions. For examples, cities such as Sheffield, with its big university population, offers the ideal base. “Yes there are high rents in London, but they exist in other cities too. If we find the right site with a high rent that justifies our criteria we will move forward.”

In this jittery, uncertain marketplace, a cautious move does not seem misplaced. Indeed, a 50-restaurant chain in prime central London might seem like a risky move to anyone but a hopeful property developer. Spicing up the life of university students and young millenials and making them appear cooler, more fashionable and attractive than the customers of your nearest rivals, however, sounds like a better bet.