Taco Bell Executive Summary
Taco Bell is extremely well positioned as the only $1B+ national QSR Mexican player (category of 1) with core equity around abundant value and craveable food with a bold flavor profile. The chain’s cult, Millennial lifestyle “hipness” brand positioning entertains with playful, engaging ads and its Live Más/Live More positioning appeals to a younger demo that desires to follow their dreams while seeking food as an experience. A broad menu offers huge variety and features tacos, burritos, specialties (Crunchwrap, Chalupa, Quesadilla, Quesarito, Gordita, Taco Salad & Mexican Pizza) and nachos. Abundant product innovation is facilitated by the mixing-and-matching of base ingredients (often incorporating a twist on the familiar, like Nacho Fries) and the brand benefits from perhaps the strongest price/abundance value equation in QSR (leveraging an abundance of inexpensive ingredients). Notably, Taco Bell seeks to celebrate value rather than apologize for it. Positive long-term sales outlook reflects: strong value equation; innovative marketing calendar; strong positioning with a younger demo; ability to address multiple dayparts; digital growth; new store formats which increase capacity for off-premise; and the possibility that ongoing stagflation will drive trade-down from higher-end concepts to TB. All this translates into a system high unit-level EBITDAR dollar amount which helps drive the chain’s going forward development prospects (plans to add another 1,000 units in the US) that further benefits from the addition of new formats including the Taco Bell Go Mobile design. In conclusion, Taco Bell remains one of the best positioned QSR brands which enjoys the added bonus of being able to tap into a material COGs outperformance to go deeper into value should that be warranted.
