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Yum lays out plans for Taco Bell

Yum lays out plans for Taco Bell

IRVINE Calif. Taco Bell is aiming to steal market share in the quick-service segment through the introduction of more beverages, more healthful menu items, family dinners and a breakfast platform set for 2012.

At the Taco Bell investor meeting Tuesday, Yum Brands Inc. executives said they plan to grow Taco Bell’s current 3-percent share of the quick-service market to 5 percent with new menu platforms that retain a focus on value, according to research from Joe Buckley at Bank of America-Merrill Lynch. Buckley shared his insights from the meeting in a report Wednesday.

The 5,500-unit Taco Bell, which is Yum’s most profitable brand in the United States, garnering 60 percent of the company’s domestic profit, already has introduced the Frutista Freeze beverage line, a nine-item Fresco menu to provide more healthful options and a 10-taco dinner kit for $15. In store at the chain are line extensions including more beverages and higher-quality offerings like a half-pound burrito using premium meats. A focus on snack dayparts, with the help of an upgraded in-store atmosphere Yum has dubbed “Project Oasis,” also is under consideration, according to Buckley's report.

“Management is pleased with Frutista sales thus far and also seems optimistic as it relates to the retooled breakfast menu, which is on the cusp of entering early market testing and features co-branded products with established breakfast brands [including] Seattle’s Best, Dole, Cinnabon and Jimmy Dean,” Buckley said.

Yum’s goal to grab a 5-percent share of the quick-service sector for Taco Bell is expected to be hit by 2013.

A“Drive-Thru Diet” marketing campaign is expected to debut in January and will focus on the Fresco menu items, just in time for consumers’ New Year’s resolutions. Across all of these new platforms, value would remain Taco Bell’s main point of focus.

“Taco Bell’s marketing and product development strategy rests on three value-focused pillars — price, abundance and quality,” Buckley said.

In addition to menu enhancements, Taco Bell officials said the chain would complete remodels or rebuilding at 375 locations this year. Net unit growth for the chain is expected to total 1.1 percent in both 2009 and 2010 and would accelerate to between 2 percent and 3 percent as credit becomes more available to franchisees.

Louisville, Ky.-based Yum Brands also operates or franchises the Pizza Hut, KFC, Long John Silver's and A&W All American Food brands. There are about 32,000 restaurants worldwide in its system.

Contact Sarah E. Lockyer at [email protected].

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