How Del Taco leaned into value—and is taking on bigger rivals

Subscribe to us on Apple Podcasts, check us out on Spotify and hear us on Stitcher. This is our RSS feed. Tell a friend! As inflation bore down on the restaurant industry, Del Taco doubled down on value. The California-based fast food chain has found great success behind its “20 under $2” value menu, assembled while other chains and their franchisees were pulling back or abandoning their value offerings as ingredient and labor costs climbed, according to Tim Hackbardt, chief marketing officer of Del Taco, speaking on the latest edition of Ad Age's Marketer’s Brief podcast. “We knew at that time [fall of 2021] that inflation was coming for the restaurant industry and our prices were going to go up for ingredients and things like that. And so our bet was that pretty much all the other brands were going to bail out of that [value] space. And we knew we could compete in that space, we just had to do it in a little bit [of a] different way,” Hackbardt said. Moving the advertised price point from $1 to $2 gave Del Taco plenty of room to assemble a menu that was “massively competitive,” Hackbardt said. “Strategically, when we originally created [the value menu], we felt that because of the breadth and the quality of the items and the flavors, it would take a very long time for any competitor to potentially catch up to us,” he added. An ad from Del Taco’s creative agency Skiver tells the story: Super Bowl marketing All the latest Big Game ad news in one spot Click here for updates Del Taco balances its value tier with premium items in a “barbell” strategy. “On that better quality side, you can get things like our epic burritos, which are fast-casual style and size burritos,” Hackbardt said. “One that we are talking about right now is our fresh guacamole burrito. Every ingredient in that product is made fresh from scratch.” In Hackbardt’s view, Del Taco is a versatile brand that has the format to compete with fast-feeders such as Taco Bell and the food quality to punch with fast-casual chains such as Chipotle. It embraces a role as a challenger to both. “What we’ve found was America loves that challenger, that number two, that little brand that's trying harder, that underdog—and whenever you can present the brand in that way, they tend to really embrace.” Del Taco, which was acquired a little more than a year ago by Jack in the Box, is seeing benefits of the combination through Jack’s larger franchise base and economies of scale which should help to accelerate unit growth. About half of Del Taco’s locations are in California but it’s expanding to places like the Southeast and Midwest. Jack in the Box CEO Darin Harris said he believes Del Taco could be a national brand. “The number one question at the end of the day when you enter a new market, is how are you different than Taco Bell? That’s what they want to know,” Hackbardt said.

How Del Taco leaned into value—and is taking on bigger rivals

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