Taco Bell Looks to Breakfast to Grow its Market Share

When you think breakfast, Taco Bell likely isn’t the first thing to pop into your mind.

But waffle tacos? Now we’re talking.

The restaurant chain announced Thursday its new breakfast menu of 13 items including an A.M. Crunchwrap, Cinnabon Delights and more.

President Brian Niccol says the fast-food chain was looking for a new way to find incremental opportunities to grow the business and had to move into early morning offerings, as breakfast is the only part of the quick-service restaurant industry that is seeing real growth.

“We have been testing this for the past 2 to 3 years, and what we have discovered is our current customers are already eating breakfast in quick serve restaurants, and they have been asking us, ‘Why don’t you get in on the game?’” Niccol says.

But getting them to choose Taco Bell in a sea of breakfast sandwich offerings won’t be easy. Niccol says the breakfast ad campaign is meant to “turn heads and steering wheels” toward the chain. One spot features “Ronald McDonald”—not the famous redheaded clown, but a different, real- life Taco Bell customer with the same famous name, giving his seal of approval.

“Clearly there are routines that have already been established, so we needed a marketing program that would get people to break their routine,” he says. “If we can give them a reward that is unlike any other reward they’ve had at breakfast, that will change their routine.”

And Taco Bell’s quirky spin on staples, and unique partnerships with brands like Dorito’s for their Dorito’s Locos Tacos, has served the company well. While it is the underdog at parent company Yum Brands (NYSE: YUM), aside bigger brands Pizza Hut and KFC, Taco Bell is slowly becoming its key money-maker with more than 6,000 locations across the country and $7 billion in annual sales.

“When we do great innovation, like our Dorito’s Locos Tacos, and Waffle Tacos, we get rewarded with more and more share,” Niccol says. “Our strategy is always to be the first, most innovative and to have tremendous value. We are going all in at breakfast.”

Taco Bell fans can also expect a move into mobile ordering and payments in the near future, Niccol says, as its popularity with millennials continues to grow.

“Our brand connects with millennials, and it gets hugely talked about in the social space,” he says. “As surprising as it may sound, the world has moved to a place where mobile and speed are of the utmost importance. It’s amazing to see how fast [millennials] text and the phone is with them in all places, at all times. It’s almost more important to them than getting a car—we have to be as accessible to them as they want us to be.”

And while overcoming flat growth trends in the quick-service industry is key, Niccol is confident Taco Bell will prevail.

“The Taco Bell future is bright—we have a goal of taking the restaurant from $7 billion (in sales) to $14 billion over the next 10 years. We think doubling our business over the next decade is a real possibility,” he says.