Among the three bigger Yum Brands concepts, Taco Bell sticks out in more ways than one. In the U.S., it has been a workhorse, responsible for 80% of its parent company’s domestic profits, where it is one of the country’s most successful restaurant chains.
Outside the U.S. has long been a rather different story. But the company has been changing that tune more recently and believes it finally has the right recipe to join sister chain KFC as a major global growth engine. And it has big plans: It expects to triple international unit count by 2030, just five years.
“I think the world clearly needs a lot more Taco Bells,” Ankush Tuli, managing director for Taco Bell International, told analysts during the company’s Consumer Day presentation earlier this month.
Getting there will take some work, of course. But company executives believe they’ve devised the correct marketing strategy to get more global customers into Taco Bell restaurants.
The company’s focus is to “teach tacos,” said Amy Durini, chief marketing officer for Taco Bell International. Tacos, she said, is a “relatively unknown category outside the U.S.” The company’s challenge historically has not just been to build brand awareness, in other words, but to build awareness of the chain’s traditional menu staple.
“For us internationally,” she said, “that’s building brand buzz, igniting core occasions, getting famous for value, all fueled by smart digital and media.”
Taco Bell is approaching $1 billion in system sales internationally. But it operates just 1,100 locations outside the U.S. While that has doubled over the past six years, it remains a far cry from KFC, which operates more than 27,000 restaurants outside the U.S., and Pizza Hut, which has more than 13,000. Both are among the 10 largest restaurant chains in the world, according to Restaurant Business sister company Technomic.
Tripling those 1,100 locations to 3,000 still wouldn’t get it anywhere close to those other two chains, but it would give Taco Bell some real momentum and could make the chain a legitimate global growth engine for parent company Yum, which currently relies on KFC international and Taco Bell U.S. for its profits.
Taco Bell has been working with major operating partners, including the Burman Group in India and the CBG Group in Spain, which each operate more than 100 locations in their markets. The company is also building a presence in a place that is rather familiar with the concept of Taco Bell’s menu, Latin America.
At the same time, the company is taking some things into its own hands, investing in company-operated restaurants in key markets, notably in the UK. “We have the unique advantage of being part of the largest restaurant company in the world as we look to leverage the massive scale of Yum,” Tuli said. Technology, through Yum’s tech platform Byte by Yum, should help Taco Bell gain an advantage over other franchises, he said. The technology is expected to be introduced in the UK soon.
But marketing is what will differentiate the brand internationally, much as it has done in the U.S. Or, as Durini said, “to take the magic global.”
She said the company will focus on “everyday pricing” in its menus to capture value customers. Those menus will also be “more burrito and chicken-forward,” which offer a better value that’s key for many parts of the globe. The company plans to get more consistent about its value menus worldwide, which Durini said is another advantage of being part of Yum.
Taco Bell also wants to be part of the local culture, again reflecting what it’s done in the U.S. The company has been giving gift cards to up-and-coming artists in the UK and Australia and plans to do the same in Spain and Latin America. It has also launched a global take on Late Night called “Encore Hours,” something it started in the UK.
“We found that customers were complaining that there was nowhere to eat after concerts,” Durini said. “Post-COVID, restaurants were closing early.” The company permitted its restaurants in the UK to open past midnight following a particularly big concert at Wembley stadium, and to inform customers about it.
There is also what she called the “How to Taco Bell” platform, which does things such as instruct customers how to eat a taco. “They often go at it from the top,” Durini said.
And then there’s more traditional sports marketing, such as the “Crossbar Bong,” similar to the chain’s “Steal a Base, Steal a Taco” promotion in the U.S. offering free tacos during the World Series when someone steals a base. In this case, the free tacos come after someone hits the crossbar of a soccer goal.
The efforts have yielded momentum. In the UK, the company turned same-store sales around by 20 percentage points last year, Durini said. In Spain, there was a 12-point swing. In India, after the chain went on television for the first time, sales improved by 47 points.
“What we have seen in the UK, and leveraging that formula, and firing it up, we know we can replicate that,” Durini said. “This is how we’re going to get to 3,000 restaurants by 2030.”
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