Taco Bell chief executive Greg Creed told investors and analysts Wednesday that 2011 had been a terrible year for the brand, thanks to a lawsuit attacking the chain’s seasoned beef and a shortage of new products to help drive traffic.
However, he said the quick-service chain is aiming to bounce back in 2012 with an aggressive rollout of new products, including a “reinvented” taco, a breakfast menu, and upgraded food items.
Speaking at Yum! Brands Inc.’s investor conference in New York, Creed said Taco Bell’s sales suffered all year from the negative publicity generated by a consumer lawsuit that questioned the ingredients in the chain’s seasoned beef.
But he also maintained the year fell apart because Taco Bell did not have sufficient new-product news to win people back or entice more incremental visits from its customers.
“We didn’t change our beef recipe or pay the plaintiff one penny, but [the suit] had an impact,” Creed said. “It was very clear that we didn’t have enough innovation to overcome what we didn’t anticipate happening.”
Creed outlined an aggressive game plan for 2012 built around what he referred to as a breakthrough product designed to reinvent the taco. That product has been revealed as the Doritos Locos Taco, which through a partnership with Frito-Lay was developed as a taco in a shell made from Nacho Cheese Doritos.
Other menu upgrades for the future include a Chef’s Signature lineup of upgraded tacos and other menu items, as well as the reformulation of several key ingredients, from the beans and pico de gallo to marinades and seasonings for proteins.
Creed also confirmed that the brand’s breakfast platform, called First Meal, would roll out to 800 locations in the West in early 2012. Taco Bell also has plans to refranchise about 400 locations over the next two years, taking its percentage of company-owned units from 23 percent to about 16 percent by 2013.