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The Hard Sell At Taco Bell

Inside the years-long experiment–created with a handshake deal–that led to fast food’s biggest new thing.

The Hard Sell At Taco Bell
Taco Bell brand marketing director Stephanie Perdue knows the math.

In early 2009, three years prior to Taco Bell’s 50th anniversary, CEO Greg Creed was already experiencing something of a midlife crisis. “Our target audience is in their 20s. Turning 50 makes us sound old, and I didn’t want to sound old,” Creed explains. “I said, ‘When we have our birthday, I don’t want a cake or a celebration.’ ” Instead, he issued a bold directive to his team: Reinvent the crunchy taco.

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Creed gave his staff until March 2012—slightly under three years—to pull off a complete rethink. They soon assembled for an all-day ideation session at Taco Bell headquarters, where they considered 30 different product concepts, including new forms of burritos, nachos, and taquitos. But one idea stuck out: a Doritos-flavored taco shell pocketed with Taco Bell ingredients.

“It was basically an image [of this taco] on a piece of paper, with a written description. We didn’t even taste it; it was just more of, ‘Hey, this is what it could look like,’ ” says Stephanie Perdue, Taco Bell’s brand marketing director. The team was giddy. Steve Gomez, Taco Bell’s food innovation expert, remembers that first mock-up with awe. “In all my years as a product developer, I’ve never seen a concept like this.”

Simple ideas are often the most successful ones, but that doesn’t mean they’re simple to execute. It would take years for this idea to transform into the wildly popular Doritos Locos Taco (DLT), which has resulted in more than 450 million taco sales, triggered a 13% Taco Bell sales jump, and required the chain to hire 15,000 people to handle the influx of customers. Taco Bell is now planning to roll out more Doritos-flavored products, and Frito-Lay has even announced that it will offer Taco Bell–flavored Doritos.

In April 2009, this crazy idea began with a trip to Home Depot, where staffers bought a paint-spray gun to blast Doritos flavoring onto a taco. After prototype development, consumer taste tests began—and flopped. “It was total buzzkill,” Gomez says.

As Team Taco was finding, it isn’t easy to transform the crispy core of a brand.

For the first group of testers, the combination of Doritos with Taco Bell’s shells was neither punchy nor zesty; it was just a displeasing taste mush. The central issue was that Taco Bell’s shells used a different type of corn masa from Doritos chips. The two companies’ teams spent months working together to find a happy medium, exploring everything from seasoning mechanics to the taco’s structural integrity. “Frito-Lay wanted it to snap and crunch more than the current Taco Bell shell does,” Creed says. “So we had to get that formula changed, then find a way to deliver the flavoring and then the seasoning. It was actually important that we left the orange dusting on your fingers because otherwise, we’re not delivering the genuine Doritos [experience].”

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Throughout 2010 and 2011, the teams experimented with more than 40 recipes. Taco Bell had a problem Doritos didn’t: A chip can break in the bag and still be enjoyed, but a taco shell can’t break in transit or in the restaurant, otherwise the taco is ruined. Seasoning was another major issue: A Doritos chip is seasoned evenly inside a giant, tumbling barrel—but the tacos wouldn’t survive that process intact. Teams of engineers worked day and night to develop a proprietary seasoner, not least because for workers on the manufacturing line, the plumes of  Doritos seasoning could create a Nacho Cheese gas chamber.

“There was a tremendous amount of pressure. There were days when we would get bummed out and worried that this would be too hard to pull off,” Gomez says. But eventually his team refined three prototypes, which were readied for market testing. Creed says, “There’s a little bit of black-box magic” that went into the final prototype of the DLT, of which he won’t elaborate. But regardless of the secret recipe, the true beauty of the DLT is its deceptively basic concept. “I remember trying to sell guacamole in the Midwest and people were like, ‘What’s all this green stuff in my burrito?’ ” he says. “But this was a fastball, down the middle.”

By September 2011, Taco Bell had rolled out the prototype at a handful of restaurants in a few cities around the country for testing. Soon, hype spread like baja sauce. Customers blogged about it. A slew of video reviews hit YouTube: “It’s everything I expected and more,” says a guy in one of the earliest, which garnered 200,000 views.

Buzz for the DLT’s national launch was locked in, but a deal between Taco Bell and Frito-Lay was not. Even though the companies had spent years working together, no official contracts had ever been signed. Taco Bell’s 50th birthday was fast approaching when Creed and then–Frito-Lay CEO Al Carey met in Creed’s office. “We both realized that if we let the lawyers get involved, this thing would get bogged down,” Creed says. “So we did a handshake deal. We said that if either one of us gets sacked or promoted, we would actually have to write a contract.”

And anyway, Creed had more pressing concerns: In going from three pilot cities to 6,000 restaurants, Taco Bell needed to up its manufacturing capacity. Initially, the company thought two dedicated DLT lines would produce enough Nacho Cheese–flavored shells to meet demand. The company’s suppliers ended up needing six dedicated lines, which are handled by roughly 600 employees. (This would later slow down the next phase of the DLT: Manufacturing capacity delayed the rollout of Cool Ranch–flavored tacos from last year until March 2013.)

When the DLT went nationwide, it was a smash hit, with millions of tacos sold in the first week alone. “Brands like Taco Bell or McDonald’s or Wendy’s—you just don’t see double-digit [growth] in same-store sales,” says Morgan Stanley analyst John Glass. Frito-Lay’s Carey was soon promoted to run the PepsiCo beverage business—not in connection to the DLT’s success—and so Taco Bell’s Creed called him up and said, “I guess we better write that contract then.”

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“Well, guess what?” Creed says now. “We sold 100 million tacos in the first 70 days. If we waited for those contracts, we would’ve sold 100 million less.”

After Nacho Cheese and Cool Ranch, a spicy Doritos Flamas-flavored taco is next on the docket. “It’s not just a product; it’s now a platform,” Creed says. “We’re going to blow everyone away in the next few years in terms of how big this idea and platform will become.”The company is now considering crowdsourcing the next iteration, and with 123 flavors of Doritos, there’s no shortage of possibilities. So far, the shells have changed but the filling remains the same. It won’t stay that way.

Will Taco Bell be able to keep its fan base enthused? Glass, the Morgan Stanley analyst, is getting the munchies just thinking about it: “It’s the type of platform that could come back year after year. It doesn’t just have to be a taco. There’s already a burrito with Fritos in it. Could you do Doritos nachos? A Doritos taco salad?”

Taco Bell wants to keep you guessing. It makes you hungrier for answers.

Photo by Chris McPherson; Shutterstock (taco)

About the author

Austin Carr writes about design and technology for Fast Company magazine.

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