TACO BELL CUTS THE FAT, AIMS FOR HEFTY SALES

By Published on .

Most Popular
The challenge Taco Bell Corp. has issued to the fast-food industry with the introduction of its reduced-fat menu isn't nearly so imposing as the task Taco Bell has set for itself.

The PepsiCo unit is counting on the reduced-fat Border Lights line to become a $5 billion business by the end of the decade, slightly larger than the $4.5 billion in worldwide sales its current menu generates. This is an especially tall order, considering no other fast-food chain has yet made a go of low-fat products.

Chairman-CEO John Martin last week emphasized no other quick-service chain has reformulated fully three-quarters of its menu-as Taco Bell has-in quest of the low-fat grail.

Most fast feeders offer a few low-fat options, like baked potatoes, salads and grilled chicken sandwiches, but haven't successfully reduced the fat in core menu items that draw customers to the stores, Mr. Martin said.

The full menu of reduced-fat offerings gives Taco Bell's effort higher visibility, but the nation's most famous value marketer also risks blurring its brand identity with the new approach.

Critics contend Taco Bell's core customer-the 18-to-35-year-old male-isn't as concerned with fat as he is with saving money.

"How many tacos can I get with the money in my pocket?" asked Bob Sandelman, president of foodservice research company Sandelman & Associates, Brea, Calif. "That's how Taco Bell's customers think, and that's why value marketing has been so successful for them."

Mr. Martin maintains that while pricing was the fast-food customer's top concern in the early '90s, it is now No. 3, and health issues have gained prominence.

Realizing value alone was "no longer a competitive advantage," Mr. Martin said, Taco Bell began developing Border Lights two years ago, under the direction of Joaquin Pelaez, VP-technology and quality.

Although Taco Bell is supporting its reduced-fat products with $75 million in marketing this year-roughly one-half of the company's total 1994 budget-no amount of advertising will float Border Lights if the food doesn't taste good, analysts say.

"McDonald's spent an awful lot behind McLean Deluxe, but the product still is not considered much of a success," Mr. Sandelman said.

In the late '80s, Taco Bell's decision to slash prices sparked a long and grueling value pricing war in the fast-food category.

Two 30-second teasers that aired during the Super Bowl suggested Taco Bell was ready to start a new battle.

A Taco Bell spokeswoman wouldn't confirm the Border Lights tagline, but a jingle played at last week's news conference contained the slogan, "Cross the border. Take a taste of light." Another jingle, presumably to be used for the regular menu items, continued the marketer's traditional value theme.

Ads supporting reduced-fat tacos will break the first week in March, with ads for the new burritos following six weeks later. The lower-fat taco salad will roll out in April. Taco Bell's agencies are Bozell/Salvati, Montgomery, Sakoda, Costa Mesa, Calif., and the Richards Group, Dallas.

Because many of the ingredients in Mexican food already are low in fat, including beans, tortillas, salsa and vegetables, Taco Bell had an easier time than most hamburger chains would reducing the fat in its products, Mr. Martin said.

Most Border Light items cost 10 cent more and have half the fat and 20% fewer calories than their original counterparts.

Other quick-service chains have also stepped up their reduced-fat offerings of late. Wendy's International is increasing its print ad budget this year to promote salads, via Bates Worldwide, New York.

And Allied-Lyon's Dunkin' Donuts today breaks a $1 million TV campaign from Ally & Gargano, New York, to support its new low-fat muffins, available in five flavors.

In this article: