While the fast-food “chicken wars” have been going on for some time, Taco Bell and Chipotle are now headed for battle on another front.
The two largest Mexican-food chains are testing new items and jockeying for market share in a manner that one analyst has tabbed “the quesadilla wars.” Both chains recently released new quesadilla offerings, which prompted predictions for an intense competition from analyst Lauren Silberman of Credit Suisse.
Consider: after Chipotle announced it planned to launch quesadillas nationwide on March 9, Taco Bell promptly sent out app notifications and TikTok marketing videos noting the nationwide return of its Quesalupa, a quesadilla/chalupa hybrid.
“That was a surprise; I haven’t seen that before. …That, to me, put them in the same competitive moat,” Silberman told The Food Institute, noting that Taco Bell (a venerable fast-food chain) and Chipotle (a fast-casual chain) have slightly different customer bases.
One person surely getting a kick out of the competition: Chipotle CEO Brian Niccol, who served as Taco Bell’s CEO from 2015-18, as noted by Business Insider (March 15).
BIG BOOST TO SALES
“Our customers raved about the cheese filled Chalupa shell in its first debut” in 2016, noted Liz Matthews, Taco Bell’s global chief food innovation officer, in a press release.
Meanwhile, for years quesadillas had been one of Chipotle’s most-requested items on social media, according to Stephanie Perdue, the chain’s vice president of marketing. As a result, Chipotle tested the product in markets like Cleveland and Indianapolis in the summer of 2020 prior to its national rollout.
Now, in 2021, analysts feel the quesadilla could provide an especially significant boost to sales for Chipotle. Silberman, for example, estimates quesadillas could contribute approximately 5% to same-store sales growth for the chain.
Chipotle had shied away from serving quesadillas in the past, since the process of warming them was too time-consuming for a chain that incorporates an assembly-line process. However, Chipotle recently whittled warming times down to 30 seconds and, by making quesadillas available strictly through digital ordering, employees can prepare them in a less-hurried fashion, in an area of the kitchen dedicated to assembling off-premises orders.
STRATEGIES FOR LAUNCHING NEW MENU ITEMS
Its quesadilla rollout hints at Chipotle’s strategy for testing new items. These days, the chain is open to new items and options that are only available on its app for a limited time – a strategy that Niccol favored when he led Taco Bell. Silberman said Chipotle was also wise to listen to a growing number of its customers who demanded quesadillas.
In your opinion, which Mexican QSR has the best new menu items in 2021?
— The Food Institute (@FoodInstitute) March 29, 2021
Chipotle’s Perdue told The Food Institute that, when Chipotle launches a new menu item “we create a fully integrated marketing plan that includes paid media in broadcast, streaming TV, online video, and social platforms, as well as PR … and all touchpoints across our in-restaurant, digital and social channels, to share a captivating narrative behind our latest innovation.”
Just as Taco Bell used TikTok to announce the relaunch of its Quesalupas and Chipotle uses push notifications to announce new menu items, other chains must market new offerings in a similar manner to get consumers talking.
“Are you marketing it to customers in a way that drives it?” Silberman said. “Brands now are trying to comment on each other [via social media] and create this dynamic, because it helps with customer engagement and customers get involved, defending their brand, talking about it, or trying items and comparing them. It all comes down to customer engagement.”