As part of its strategy to grow from $10 billion in annual sales today to $15 billion in annual sales across its global business by 2022, Taco Bell announced at its 2017 investor and analyst day its plans to add restaurants domestically, and revealed four key international markets that it will focus on as it continues to grow as a global brand.
Taco Bell recently announced its plans to grow as a system to approximately 9,000 restaurants globally in the next five years, opening the door of opportunity for 100,000 new jobs in the U.S. alone. Between 2012 and 2016, Taco Bell opened more than 600 net new restaurants (excluding license units) domestically, and plans to improve upon 2016’s growth rate in 2017. Internationally, Taco Bell will focus its growth in Brazil, Canada, China and India, targeting at least 100 restaurants in each market. Today, Taco Bell operates more than 6,650 restaurants in 23 countries.
At a company well-known for evolving and innovating its menu offerings with craveable creations, Taco Bell is on a journey to create relevant experiences in its restaurants with open kitchens, shareable food, digital menu boards and the opportunity to create a community atmosphere utilizing local reclaimed elements and artwork. By smartly managing building costs and design, Taco Bell has expanded into rural markets and has furthered its suburban penetration. To add to its recent development success, Taco Bell will enter highly pedestrian urban areas that do not have room for a drive thru. The brand will use its inline and Cantina restaurant concepts for these locations.
“We have tremendous potential to continue to grow this brand domestically, as well as globally, with our world-class franchise system,” said Brian Niccol, Chief Executive Officer at Taco Bell. “We are already off to a great start by continuing with breakthrough menu innovation, digital innovation and diversifying our development portfolio. Our new and remodeled restaurants deliver a Taco Bell ‘category-of-one’ brand experience for suburban, urban and rural markets.”
Last year, Taco Bell announced four new restaurant designs that will provide tailored concepts reflecting the local community – Heritage, Modern Explorer, California Sol and Urban Edge. All four test locations opened in Orange County, California in 2016, and two new restaurants in Bay City, Michigan and New Whiteland, Indiana opened earlier this year. By the end of 2017, an additional 350 restaurants will have been refreshed, bringing the total number to about 80 percent of the system. In the past five years, Taco Bell and its franchisees have invested more than $600MM to re-image more than 2,700 restaurants.
“Innovation on our menu and building design, along with social experiences are going to fuel our growth,” said Liz Williams, Chief Financial Officer at Taco Bell. “Domestically we’re looking at opportunities to increase our penetration in underserved markets while internationally we’re evaluating new markets to serve customers we aren’t currently.”
In late 2015, Taco Bell opened its first Taco Bell Cantina restaurant in the Wicker Park neighborhood of Chicago. Since then, eleven urban inline stores have opened in cities, including San Francisco, New York, Chicago and Atlanta. Along with Wicker Park, five are Cantina locations, meaning they serve alcohol: Austin, Las Vegas, San Antonio and Berkeley, Calif.
“Urban markets require a different approach for Taco Bell to stay relevant for consumers and create a successful business model for our franchisees,” said Mike Grams, Chief Operating Officer at Taco Bell. “Taco Bell has a lot of opportunity in areas such as New York City and Chicago, and we have a great solution for our franchisees and developers with our urban inline and Cantina concepts.”
By 2022, Taco Bell expects at least 300 of the new locations to be urban inline restaurants in markets with great growth potential.
With the recent opening in the Netherlands, Taco Bell currently has 350 restaurants in 22 countries outside the U.S. In the next five years, the company plans to operate approximately 9,000 restaurants—up from 6,650 locations today—in more than 40 countries.
“We’re seeing tons of enthusiasm from our fans and franchisees to expand Taco Bell globally,” said Melissa Lora, President of Taco Bell International. “We’re focusing our efforts on four key markets that have billions of people and a strong youth culture. We believe Taco Bell can become a global powerhouse.”
Taco Bell will open in many new markets, but remain focused on four key markets where it expects to open more than 100 restaurants each– Brazil, Canada, China and India. Additional international growth markets gaining scale include Spain, Guatemala, South Korea and the United Kingdom.