Vol 42. Taco Bell: Spec-taco-lar co-branding 🌮

Midlife crises manifest in different ways. Some people go on month-long trips, other people do major home renovations. But when Taco Bell was about to turn 50-years old, CEO Greg Creed had something different in mind for the Mexican fast food chain. 

He wanted to reinvent the crunchy taco. 

This week, Case Studied explores how Taco Bell teamed up with Doritos to launch their smash hit co-branding campaign.

Getting hungry?! Enjoy a free lunch courtesy of Vendry!

For a limited time, when you meet with the Vendry team for a 15-minute call to discuss your marketing agency needs, we’ll send you a free $100 Uber Eats gift card to buy you and your team a bunch of tacos 🌮

We match brands with the best performing marketing agencies (based on results & churn) completely free of charge.

Whether you need help with Meta Ads, SEO, Design or Web Development, our network of 1,000+ agencies has you covered.

Book a call and get your search kicked off today!

_Promoted

The Brief:

In 2009, three years before Taco Bell turned 50, Creed asked his team to develop a big innovation to coincide with its anniversary. The team got to work and held an all-day brainstorming session at Taco Bell’s HQ where 30 different product concepts were considered. 

Among the new kinds of burritos, nachos, and taquitos, there was one clear winner—a taco with a Doritos-based shell, stuffed with Taco Bell ingredients. This was a natural fit considering that both Doritos and Taco Bell are owned by the same parent company, PepsiCo.

To help pitch the idea to executives, the development team went to a hardware store, bought a paint-spray gun, and used it to spray Doritos flavoring onto a Taco Bell crunchy corn taco. 

“It was pretty funny watching people from behind glass spraying our tacos with a paint gun,” Creed said. “But it was enough for us to know conceptually that we had a big idea.” 

The Execution:

Taco Bell’s research and development team spent the next two years developing 40 prototypes of the Doritos Locos Taco (DLT) shell. The first iteration was pretty straight forward: it was made of Taco Bell’s yellow corn shells and Doritos’ nacho cheese seasoning. 

But the initial consumer taste tests failed—it didn’t capture the essence of Taco Bell’s tacos or Doritos chips. 

“The idea of merging a chip and a shell together—it sounds simple, but it’s very hard to make a reality,” Taco Bell food innovation expert Steve Gomez said. “To tackle this huge challenge, for months we shared know-how between the technical teams at Frito-Lay and Taco Bell.”

The main problem was that the taco shells used a different type of corn masa than the chips. The team had to consider other factors, too, like seasoning distribution and structural integrity. And of course, the product had to capture the unique elements of both brands. 

“It was actually important that we left the orange dusting on your fingers,” Creed said. “Because otherwise, we’re not delivering the genuine Doritos experience.” 

Despite all the roadblocks, the Doritos Locos Taco eventually reached its final iteration. They started by rolling out the prototypes at a few restaurants in a handful of cities around the US for testing. 

Hype for the new menu item built up fast. Customers started sharing their experiences with it on social media. One person even drove 900 miles from New York to Toledo, Ohio just to try it. 

“They were just fanatical and the results were off the charts,” said Stephanie Perdue, Taco Bell’s brand marketing director. “I’ve never seen so much word of mouth generated from one single product.”

Gearing up for and following the national rollout, Taco Bell had plenty of promotion in stores, on product packaging, on social media, and on television. Here’s a peek what that looked like:

📱Hometown Tweet-Off competition: People were challenged to tweet the reason why their town should be one of the first to try the Doritos Locos Tacos. The person with the most retweets—and their town—would get to experience the new tacos a week before the rest of the country. The town of Fuquay, North Carolina won thanks to a resident named Zach. 

🌆Live Tweet Billboards: Taco Bell put consumer tweets on live billboards in Times Square and Sunset Boulevard. Each tweet that made the billboard was photographed and sent to the consumer, and they were prompted to share/retweet it to continue the buzz around the product. They also printed real customer tweets on Taco Bell packaging and cups, and made an augmented reality app that had a live stream of customer tweets. 

⚾ Steal a base, Steal a taco: Taco Bell gave away a free Doritos Locos Taco for every base stolen during the 2012 World Series. 

🏔️ Free airlifted tacos: After fake flyers were distributed in Bethel, Alaska declaring that a Taco Bell was opening in the small town of 6,200 people, Taco Bell airlifted a taco truck to the town and gave away about 10,000 Doritos Locos Tacos to residents.

The Results:

The Doritos Locos Tacos became Taco Bell’s best-selling new product ever. 

The chain had to hire 15,000 more employees to handle sales growth and demand, which shakes out to about 2-3 more people per restaurant. Its suppliers had to build six dedicated manufacturing lines for the DLT, handled by roughly 600 employees. 

The new product helped lift profits for Taco Bell’s parent company, Yum! Brand, by 23%, and Creed said they sold 100 million tacos in the first 70 days (and at a price that’s 30% higher than their regular crunchy taco). 

When the Doritos Locos Tacos were first introduced in the first quarter, Taco Bell’s same-stores sales increased by 6%. By the second quarter, that figure increased by 13% and it went up again in the third quarter by 7%. For context, the year prior, the chain reported a same-store sales decline of 2% for the year. 

“The way we thought about launching it was, ‘What’s the story?’” said Taco Bell Chief Marketing Officer Brian Niccol. “We wouldn’t have sold 100 million Doritos Locos Tacos in ten weeks if all we did was say, ‘It’s a new product and you’re going to love it because it’s now made with Doritos.’ We really listened in a different way for this program, to what people were tweeting and saying on Facebook. And that’s how we got our launch execution.”

The Takeaways:

There’s a lot to learn from the Taco Bell-Doritos co-branding execution. Here are a few lessons that stand out:

1. Enable your team to think big

A billion dollar product conceived from a team brainstorm is a pretty solid ROI if you ask us. Often times we are eager to look externally for new ideas, but no one knows your business or customers like your employees do.

While it’s always important to consider input from external research and agency partner, make sure to carve out space for a few brainstorms a year to not only include your teams in the creative process, but in hopes of finding your next winning idea.

2. Integration is the strongest form of partnership

There are a lot of versions of what a Doritos and Taco Bell partnership could look like. Maybe they offer customers a free bag of chips with their order? Or perhaps they crunch up some Doritos on top of their tacos.

The reason the Locos Taco worked as a partnership is because it considered how to deeply integrate the two brands together, taking the best parts of both a Doritos chip and a Taco Bell taco.

Often times, brands think of partnerships as an easy way to leverage each other's customer bases by simply slapping on a logo to products, however when brands take the time to develop products that truly bring out the best of both partners, great things can evolve.

3. Let your fans tell the story

Taco Bell has an advantage that most brands don’t in that they have a very ravenous and vocal fan base that loves to talk about their product.

By leveraging social media channels like Twitter, remember this was 2012, to enable their loyal customers to talk about their products and share their excitement, they were able to have their fans build the hype around the partnership, which is a much more authentic and effective way to market your products.

ICYMI:

Missed the last week of Case Studied? We’ve got you covered.

Last week, we covered how Equinox went against the cliché of “New Year, New You” gym campaigns and banned all new memberships on January 1st.

Spice it up: Could your marketing use some fresh flavor? Vendry can help. They’ll match you with vetted agency partners within one week—for free. Get started.