Taco Bell's Cool Ranch is firing up sales

The latest version of Doritos Tacos Locos is making the chain a bright spot for owner Yum Brands, which has stumbled badly elsewhere.

By Jonathan Berr Mar 12, 2013 8:18AM
Taco Bell restaurant in Richmond, Virginia (© Steve Helber/AP Photo)Taco Bell's Doritos Locos Tacos are so popular that a minor panic erupted on social media last week when some people weren't able to find the newest Cool Ranch flavor during what the company dubbed a Fan Day. The response "humbled" the 5,600-unit chain, a bright spot for beleaguered parent company Yum Brands (YUM).

Shares of the restaurant owner have barely budged this year -- gaining just 2% as the Dow has hit record highs -- amid concerns about its business in China, where worries about contaminated chicken have caused revenue to erode. Yum gets more than half of its sales from China, mainly from its KFC outlets, and recently warned investors that its profits in 2013 would fall because of problems there.  

Thanks to the popularity of the Doritos Locos Tacos, Taco Bell posted an 8% gain in U.S. 2012 same-store sales, a key retail metric of sales at locations opened up a year. That's more than double the 3.1% gain McDonald's (MCD) reported and the 3.5% increase seen at Burger King (BKW). The Doritos Locos Tacos is probably one of the most successful fast-food product launches in the last few years.
 
"Cool Ranch Doritos Locos Tacos have been one of the most anticipated new menu items we've launched, and will be the biggest in our company history," says Rob Poetsch, a Taco Bell spokesman, in an email. "We're pleased with the overwhelmingly positive reaction from our fans, in fact, we've seen twice as many social media conversations in the first few days we launched."

Indeed, one reason for Taco Bell's success is its savvy use of social media. As Nation's Restaurant News noted, the chain made a "surprise announcement" on its Facebook page on Wednesday that the Cool Ranch Doritos Locos Tacos would be available one day before its official launch.

Social media can cut both way, though, as Taco Bell quickly found out when some locations didn't have the tacos available. That prompted many disappointed fans to take to the Internet to voice their outrage over this injustice, which affected about 4% of the company's stores.

"I’ve been waiting for this taco a long time and heard the announcement via Facebook and Twitter," writes Brian Terwilliger of Kissimmee, Fla., in an email to Nation's Restaurant News. "Driving around to be denied is outrageous considering the advertisement you guys [Taco Bell] released on this taco."

Taco Bell sprang into action. The company's social media team contacted disgruntled customers and told them where they could find the Cool Ranch Doritos Locos Tacos, averting a "crisis." No shortages have been reported.

Jonathan Berr, more of a burrito fan, owns shares of McDonald's. Follow him on Twitter @jdberr.

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4Comments
Mar 13, 2013 2:49PM
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It's just like they took the Cool Ranch chips and made them into a taco shell. I mean JUST like that.....and people buy them and eat them just like they were regular tacos.

 

A friend of mine told me the Department of the Obvious is hiring.....is that like goverment ?

Mar 12, 2013 10:03AM
Mar 12, 2013 5:46PM
avatar

Sure it taste good, but it's a weak shell. It blows up on the first bite.

 

Hey, bring back the Bell Beefer, now that would also be a hit again.

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