Fast-food fans demand endless innovation. Some chains -- think McDonald's (MCD) and Chipotle (CMG) -- can get away with just a few limited-time-offers (LTOs) each year, but most chains need to keep trying new things in order to change up their menus.
Of course, some menu innovation can mean bringing back an old favorite. That's something Yum! Brands (YUM) Taco Bell did when it brought back fan favorite Mexican Pizza to the delight of a whole lot of its customers. Unfortunately, that plan backfired a bit as the offering proved too popular and the company sold out the beloved menu item angering many of its biggest fans.
That's something the company has tried to explain on its website.
"Our fans’ love is all consuming, and they’re consuming all the Mexican Pizzas. Demand for the Mexican Pizza was seven times higher than when it was last on menus, and replenishing the beloved menu item is taking longer than we’d like," Taco Bell shared on its website. "Shortages of the Mexican Pizza were unexpected, and have occurred on a rolling basis."
The chain has made it clear that Mexican Pizza will return (although not anytime soon). Until that happens, however, the fast-food chain has tried to find new ways to engage its customers and it's trying something new right now.
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Taco Bell Leans Into Comfort
One of the reasons Mexican Pizza sold so well is that people remember it fondly. It may not actually be good (though hundreds of thousands of people would argue that point) but it's comfort food due to its familiarity and its connection to the days before the covid pandemic.
Now, the chain has been testing a new breakfast menu item that isn't a returning classic, but which does draw on the comfort food idea. And while this new item has only been tested in select locations, it seems like something that Taco Bell fans will embrace.
"The new item is called the “Grilled Cheese biscuit’, which is a flaky biscuit smothered in melted cheddar, mozzarella, and pepperjack cheese and will be available until June 22. The biscuit is $1.99 or you can add a piece of sausage and get it for $2.49," WATE in Knoxville, Tennessee reported.
Reporter Savannah Young tried the new item (which has been tested in other locations as well) and said it "was delicious with nice, crispy edges." She also noted that "all of the cheeses melted perfectly together to create just enough kick to it."
A Grilled Cheese Biscuit isn't particularly Mexican, but that's true of much of the chain's morning offering. Adding new menu items -- even if they're not all that logical for the chain's concept -- has been a core part of the company's business plan.
Taco Bell Doubles Down on LTOs
CFO Chris Turner spoke about the importance of menu innovation during the chain's first-quarter earnings call.
"At Taco Bell U.S., we continue to experiment with new and innovative ways to engage with our consumers through LTO programs such as the Taco Lover's Pass, which helped fuel growth in loyalty memberships during the quarter and which drove customer frequency," he said.
CEO David Gibbs also explained that the ongoing inflation and potential tough economic conditions may actually benefit Taco Bell.
"We expect that if there's cutting back, that there'll be some trade down from fast casual back into QSR, which will be favorable for us, particularly Taco Bell, which I think is well positioned to capture some of those visits," he said. "But it all comes back to this theme of the QSR industry is built on convenience and value. Convenience and value win in any environment, particularly when you couple it with our great brands and innovative products that we're constantly introducing."
