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Big Brands Hide Behind Craft Labels as Tastes Change

There is no doubt that the millenial mindset is expanding to include all aspects of the U.S. economy. Food retailers have been quick to notice this emerging market and have begun to appeal directly to the demographic. Gourmet taco maker U.S. Taco Co. has tapped into it by offering milkshakes in mason jars and “1%er” tacos with lobster meat. After ordering, customers are given license plates so servers can correctly identify them. Even the logo is off-center, featuring a pink skull. However, one thing remains hidden: U.S. Taco Co. is actually an outpost of Taco Bell.

Increasingly, major companies are testing smaller craft labels for economic viability when compared to their own well-established brands. While some companies have tried acquisitions of trendy restaurants in the past, those moves come with high risk as such shops are usually not ripe for expansion or development. Developing a new craft brand internally is seen as a way to tap into new markets without overburdening the company with additional risk. PepsiCo introduced Caleb’s for designer cola, and McDonald’s opened a cafe called The Corner in Australia that utilized foods like lentils and eggplant in its menu. In both cases, the parent corporations did not readily disclose that they owned the new designer brands. While stopping short of denying their ownership, marketing plans for both companies rely on distancing themselves from the larger consumer brands that own them.

Low-key efforts are becoming a go-to marketing tactic for capturing customers in their 20s and 30s. Qualities like “real” and “authentic” are top priorities for the age group, and big brands don’t resonate with them like they did with their parents. In addition, millennials are looking for fresh products, a fact that has not escaped food industry executives as they stream-line menu choices but also offer more options, fresher ingredients and less preservatives.