Why Taco Bell Got So Expensive

Taco Bell is an extraordinary outlier by every measure. It’s a fast food chain that boasts a deeply passionate fanbase, enjoys a reputation for reliability, speed, and accuracy, and when it comes to business - Taco Bell has grown at such a breakneck pace over the past 20 years that it outperforms giants like McDonald’s, Burger King, and KFC in per-store earnings.

The Mexican chain is so popular that it’s one of the few companies whose per-store earnings have stayed ahead of inflation. Remarkably, Taco Bell boasts some of the highest ever profit margins ever reported in not just fast food, but also in the restaurant industry. Taco Bell’s renaissance is a miracle in an era where fast food chains all follow the same cookie-cutter playbook of cost-cutting and international expansion to cover up domestic decline like KFC, McDonald’s, and Starbucks.

Business is a zero-sum game where every decision is connected, every action has a cause and effect, and the rise of one brand contributes to the fall of another. In this episode, we’ll cover the rise of Taco Bell, their strategy that’s made them so successful, and why Taco Bell is the missing puzzle piece behind the downfall of KFC and Pizza Hut and how their struggles in fried chicken and pizza have molded Taco Bell to what it is today, for better and for worse.

0:00 Think Outside the Bun
1:36 Sponsor Break (Factor Meals)
4:08 Geopolitical Liberation
20:25 Non-Replicable Blueprint
31:24 The Goose from Mexico
41:18 Sponsor Break (Moomoo)

[ModernMBA]

0:00 Think Outside the Bun
1:36 Sponsor Break (Factor Meals)
4:08 Geopolitical Liberation
20:25 Non-Replicable Blueprint
31:24 The Goose from Mexico
41:18 Sponsor Break (Moomoo)

[arjunkaycee]

Yesterday, Taco Bell decided to pretend to be a tech company and did like an hour-long presentation in the style of Apple and Sony. Considering this video basically said that Taco Bell is carrying both KFC and Pizza Hut, it just feels perfect.

[margorana]

I need to know how this dude gets a hold of every 1980s commercial made by every major business in the the Western Hemisphere.

[EvlEgle]

Also this whole "growth at all costs" is exactly whats wrong with literally every publicly traded company.

[SpunkMcKullins]

The whiplash of watching a video about Taco Bell's success and within 10 minutes being introduced to Deng Xiaoping is wild.

[steverogers]

Taco Bell is winning the franchise wars?

Demolition Man was right!

[MaleRainbowAction]

I never ever understand when product managers get replaced with accountants. This keeps happening with multiple franchises and brands but others never learn ACCOUNTANTS DO THE BOOKS, never do things adventurous, innovative, etc. It’s just about cutting costs and raising profits. No vision.

[olivergoldvalente]

Not discounting core products as a concept blew my mind and made me realize their unique position in the market of fast food. I find this stuff fascinating. Thank you for sharing! Excellent video as always.

[Nevir]

I love the logic: "This brand is our golden goose, we can't risk screwing it up, so we are going to stop doing what we have been doing and instead penny pinch!"

[TheGreatDanish]

I worked for taco bell in 06-08. After I left that job, I hadnt ate at tacobell for just about 20 years.

Ended up at it again a few months ago. I was utterly shocked to find that the food was *just the same* as it was when I was a teenager. Thats genuinely impressive, honestly. The quality and taste of BK, MCDs, and just about every franchise has changed over the years. Taco bell feels like it's core menu is frozen in time and I adore that.

Edit: let this post be a memorial to my love of taco bell. I went back shortly after this and nearly puked eating that slop. Holy shit.

[cameronbatko]

No wonder Taco Bell has gone downhill the last few years. Ordering a few items you spend $15–20. That is too much for Taco Bell. All the innovation of the past has stopped. And now they are squeezing the customer for more money. I go to taco way less than I used to 3-4 years ago. Used to be my go to fast food

[evan]

As a teen I worked at Pizza Hut for 5 years, and I even owned some yum! stock back then too. You could feel the era of the sit down Pizza Hut was coming to a close. I worked as a server and we kept the old school style dining room until the restaurant closed down after I left in 2013. Now they just do delivery.

[potatoboy]

Man the comment at 16:15 hit me hard, once McDonalds changed their value menu, I found myself going there less and less often because the higher price point items just hurt when you're use to getting a bag of mcchickens for $5.

[NicholasGouw]

Gotta love the Yakuza intro references

[sydguitar]

Next video: "why factor and other meal services are scams"

[bananawitchcraft]

I had no idea Mexican food was unpopular until the 2000s. I grew up in a town with a large Mexican population, I remember before they had a Taco Bell there, and the local Mexican restaurants always had a ton of business. Some of the best food I ever ate

[NaniteAlex]

Love how you used the old Taco Bell fonts for the early charts, nice attention to detail.

[jhnyjoejoe]

Remember the 89cent
5 layer beefy burrito from 2010?
It's $5 now. A 500% mark up.

[i-Sparki]

One thing I can say about Taco Bell is that the quality of their food has surprisingly not dropped over the years. A Cheesy Gordita Taco now tastes pretty much the same as back five years ago. Yes, their food was at a low place already but a reliability in the familiar really helps keep people coming back.

In comparison, Burger King barely resembles itself of three years ago let alone five.

[SammehMarley]

That Spanish-speaking Chihuahua is literally the reason I have my dog, Chalupa, today lmfao
I just wanted to get a Chihuahua & name it after somethin' from Taco Bell XD