Waffle Taco, Anyone? Taco Bell Rolls Out 'Paradigm Breaking' Breakfast Nationally

Chain Readies Massive Marketing Blitz For Largest-Ever Menu Expansion

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Dreams of a waffle taco for breakfast can soon be realized for everyone in the U.S.

On March 27, Taco Bell will be rolling out its breakfast menu into all its 5,500 locations -- the largest menu expansion in its 50-year history. The rollout follows an extended test that began on the West Coast in 2012. The chain originally tried breakfast in 800 stores in 10 western states in early 2012.

Taco Bell is best known for its late-night Fourth Meal concept, but up until recently, the chain had virtually no presence at breakfast. President Brian Niccol said when the chain decided to capitalize on breakfast, he felt the category could use some innovation. "When we look at the category, we haven't seen much besides me-too offerings," he said. "We want to create something that isn't round and requires a bun. That's not what we do. The big innovation in the last decade is an egg white, but I think the consumer wants more and we can give them more."

A massive marketing blitz will be led by Interpublic's Deutsch, which will handle TV, in-store, point-of-purchase and radio. Publicis Groupe's DigitasLBi will field digital and social media. A teaser campaign will launch via digital and social media this week, but the full campaign won't break until the day the products are available.

Deutsch sibling DraftFCB created the packaging, which will be different than its normal look. Taco Bell Chief Marketing Officer Chris Brandt dubbed it "Instagram-worthy."

Mr. Brandt declined to detail how big the launch would be dollar-wise, but said: "You will not miss Taco Bell breakfast."

One of the higher-profile items on the menu is the Waffle Taco, which Mr. Niccol said "has gotten more buzz than a lot of other breakfast products." The chain made waves on social media in the first half of 2013 when it began testing the waffle taco -- which includes eggs, sausage or bacon and a side of syrup -- in a few southern California locations. That test quickly expanded to 100 stores in August.

Other products on Taco Bell's breakfast menu include the A.M. Crunchwrap; co-branded Cinnabon Delights; a Breakfast Burrito; the A.M. Grilled Taco; Flatbread Melt and hash browns. Mr. Brandt said that the the A.M. Crunchwrap -- eggs, steak, sausage or bacon, a hash brown and cheese all wrapped up in a tortilla -- will be the chain's equivalent to McDonald's Egg McMuffin, its signature breakfast item. "The breakfast sandwich hasn't changed 40 years, and we think this breaks that paradigm."

McDonald's set the standard for fast-food breakfast when it unveiled its Egg McMuffin in 1972. Chains such as Burger King later rolled out breakfast items, but McDonald's still dominates the category by a wide margin. Starbucks in recent years began putting pressure on McDonald's breakfast business -- especially as the coffee giant began opening locations with drive-thrus -- and McDonald's sought to compete with Starbucks when it rolled out its improved coffee and McCafe line of espresso-based drinks a few years ago.

Coffee is, of course, a key component in the morning daypart. Almost two-thirds of consumers drink coffee for breakfast, according to Technomic's Breakfast Consumer Trend report. Taco Bell will have a proprietary coffee blend -- though the chain doesn't expect coffee to be the star of its breakfast menu. "We are not trying to compete with [other chains with coffee] right out of the gate," said Mr Brandt. Instead, the focus is all on the food. "We believe we'll differentiate on the food upfront, and as it develops we can add specialty coffee drinks." He noted that the company has tested iced coffees and flavored coffees, but no rollouts are imminent.

Taco Bell has long been known for its cheap prices and value items. Breakfast is also an especially price-sensitive meal, according to Technomic's report. More than half of consumers (57%) who eat breakfast at home say they do so to save money, and 36% say it's too expensive to buy breakfast from a fast-food or fast-casual chain.

Chris Brandt
Chris Brandt

Mr. Brandt said that while the Taco Bell brand is inherently about value, the chain will put a heavy emphasis on product innovation in the company's marketing. The chain hasn't confirmed prices for the national rollout, and Mr. Brandt declined to discuss pricing, but he said that "we have to have these things priced correctly, so value is always in the background, but we're differentiating form an innovation standpoint."

Taco Bell's parent company Yum Brands spent about $280.3 million on U.S. measured media in the first nine months of 2013, according to Kantar Media. It spent about $250 million on the prior year. Taco Bell's same-store sales were up 3% in the U.S., while its fourth-quarter U.S. same-store sales were up 1%, marking the eighth consecutive quarter of same-store sales growth at Taco Bell.

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