Live Más Expensively: Taco Bell Is Launching a Fancy New Chain

Moneybox
A blog about business and economics.
April 24 2014 12:24 PM

Live Más Expensively: Taco Bell Is Launching a Fancy New Chain

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For some reason, Taco Bell has had trouble luring upscale clientele.

Photo by Kevork Djansezian/Getty Images

Taco Bell seems to have resigned itself to life as Chipotle’s middle-aged, junk-food-loving cousin, so the company is starting fresh in the battle for Mexican-ish food supremacy by launching a new, upscale fast-casual concept called U.S. Taco Co. and Urban Taproom. According to Nation’s Restaurant News, the first location will be in Huntington Beach, California, with a menu of Americanized tacos using higher-quality ingredients than what you’d find in a Crunchwrap Supreme. 

Sample tacos, as reported by Restaurant News: There’s the “Winner Winner,” which involves fried chicken breast topped with gravy, roasted corn pico de gallo with fresh jalapenos, and fresh cilantro. Then there’s the “One Percenter,” with  “fresh lobster in garlic butter,” red cabbage slaw, and pico de gallo. The menu will also include steak fries with habanero chili dust, milkshakes, and craft beer. You know, stuff upwardly mobile millennials like.  

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Here’s Taco Bell CEO Greg Creed explaining the launch:

Creed said U.S. Taco Co. was born of a segmentation study conducted on Taco Bell that revealed a fairly large demographic that was not likely to use quick-service restaurants at all. Rather than spend millions trying to lure those potential diners into Taco Bell, Creed’s team decided to design a new concept that would appeal to that demographic, which includes an eclectic mix of generally higher-income foodies who are “edgy in how they live their lives but not necessarily in how they eat,” he said.

I think this illustrates a very simple lesson about marketing. It can be incredibly profitable for upscale brands to slum it by releasing a line of mass-market merchandise. Just think about every time a famous designer does a line for Target, or when superstar chefs start churning out cookbooks and frozen food. However, it is much, much harder for a downscale brand to suddenly act posh and reach out to wealthier clientele, which is pretty much what Taco Bell tried to do when it launched its Cantina menu in the face of Chipotle’s competition. There was no way that a chain whose single greatest recent innovation was turning Doritos into taco shells was ever going to successfully pick off somewhat more discerning customers who are into goodies like sustainably raised pork. Once you’re stuck in the public’s consciousness as the Bell Labs of stoner food, it’s tough to shake the reputation.

Jordan Weissmann is Slate's senior business and economics correspondent.

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