During the World Cup, Taco Bell’s restaurants in Guatemala and Costa Rica were packed with avid soccer fans watching the games as if they were at local bar. It’s exactly the kind of brand validation Liz Williams, president of Taco Bell International, is thrilled to witness.
“What I love is that people wouldn’t sit there for hours if it wasn’t culturally centric for them to hangout,” Williams said. “Internationally, we are really connecting with youthful customers.”
During a rare sit-down interview in her fifth-floor office at Taco Bell’s Irvine, Calif. headquarters, Williams talked to Nation’s Restaurant News about Taco Bell’s worldwide fan base, and how the brand’s culture of innovation feeds that frenzy. Brand buzz is crucial as the company plans to grow to 9,000 units and $15 billion in annual sales by 2022.
In 2017, Taco Bell’s sales were $10.1 billion, and the brand has 7,000 units globally.
The unit growth will be split equally between domestic and international — with Williams leading the global assault.
“There’s a tremendous amount of opportunity all around the world for the Taco Bell brand. In the markets where we gain awareness, our business flourishes,” she said.
Williams and Julie Felss Masino, president of Taco Bell North America, inherited the top leadership roles at Taco Bell, a division of YUM Brands, when former CEO Brian Niccol left in early 2018 to lead Chipotle Mexican Grill. Louisville-based YUM does not refer to the duo as co-CEOs, but they essentially are in spirit. While Masino tackles domestic growth and operations, Williams is charged with adding 1,000 units abroad over the next four years. One of her first big moves was facilitating Taco Bell’s first ever master franchise agreement with brand operators in Spain and Brazil. Later, this year, her team plans to announce plans to open stores in Thailand.
In the interview, the former Taco Bell CFO also addressed the post-Niccol succession plan, the much-talked about Southern California relocation of Chipotle and rumors of Niccol’s attempt to poach top Taco Bell talent. Here’s what she had to say:
How did the co-leadership roles between you and Julie come about after Brian Niccol left for Chipotle? And, talk about the challenges of filling his shoes.
We do a great job always of teamwork here and succession planning. Julie and I had been working together. I had been at Taco Bell for seven years, and had been in the CFO role for a majority of those years. I know the Taco Bell business pretty extensively. My transition into the international role was very planned and seamless. Julie is a great partner to work with. She’s fully focused on maintaining the great track record that we’ve had in the U.S. and she has great plans to take it to the next level. She also has a terrific team.
The team did not miss a beat in terms of the transition.
Is there a plan to eventually name a CEO?
Currently, Julie and I report to Greg Creed [CEO of Louisville-based parent company YUM Brands] and work closely with Greg. That is the plan.
That is the permanent plan?
That’s the plan.
Can you talk about the speculation on Wall Street that Niccol is out to poach Taco Bell talent?
So, Chipotle is a great brand. We welcome them to the area. I can see why they want to come here. It’s beautiful place to live and to work. We’re not worried about that. We have a great culture with innovation with creativity and belief in all people. Retaining our terrific talent is something we care about and cared about before competitors were in our backyard, and we still care about it. I’m not worried. I don’t think Julie is worried.
So poaching hasn’t happened?
No. In the industry, people always come and go. Brands are certainly bigger than that. We have a deep bench of terrific leaders. No, we’re not worried, and we think we have a great brand to retain top talent.
On the recent Master Franchise agreement in Spain and Brazil: Is that the best way to meet global growth goals of 1,000 units by 2022?
I think it’s part of the combination. I think internationally, it will be a mix of master franchise agreements and some traditional franchise agreements. In certain markets where you find the right partner, where they can establish the right scale and have a proven track record, then it’s a good combination.
Are you on track to meet your 9,000 units, $15 billion in sales goal by 2022?
We’re right on track.
You’re at 7,000 units now globally. How do you see the next 2,000 units split between domestic and international growth?
It should roughly speaking be split between U.S. and international. In terms of international growth, we are working with a portfolio of countries to make up that 1,000-unit growth. It will be combination of some of our largest markets, Brazil and India. Brazil and India are driving double digit new unit growth per year. Our other large market is China.
Next level of markets with huge opportunity: Australia, Spain, United Kingdom, Netherlands, Finland.
What about domestic growth?
Julie can talk more on that. We are well on track with U.S. plans. A lot of the focus on the U.S. will be on traditional drive through development but also the Cantina development.
What’s it like when you enter an international market? How is the brand perceived?
They feel like we are a culturally centric lifestyle brand. It’s a brand that we say is a Category of One. What does that mean? We are not the traditional quick service. We are a category that is current with all things lifestyle — whether that’s food, music, or sports or pop culture. We are truly a current brand. We like to say: “When you step into our restaurant, you step into our brand.”
Like the World Cup example.
People were camped out in our restaurant for hours watching the game as if it was this second place [hangout] to them.
How do you maintain the brand hype, which is the envy your rivals?
It’s an innovation culture. Innovation is at the center of everything we do: food, training, restaurant design. We are always looking at how we can do it in a new or better way.
How do you inspire innovation?
We do a lot of going into the marketplace. We will constantly go out and do something that inspires us to keep creative juices going. We call them immersions in all aspects of cultures.
Anytime we all go out and eat together, that’s an immersion. A couple of months ago, we were in Thailand [doing research] and the team spent days in Thailand. Our culinary leader went all over the country, learning about culture and the different spice levels and preferences. Our team went through the country looking for the best place to enter Thailand. Do we want to be on a busy street, or a mall?
On the food side, how many items do you test before a Quesalupa comes to pass?
We test hundreds of ideas in all formats. The magic of that starts with our culinary team. We believe strongly at Taco Bell you constantly have to be innovating and looking all around you. You have to have an environment that’s creative. But you have to give everyone permission to try a lot of things. We always say around here, “Fail fast, fail cheap” because not all innovation works.
How do you keep up with the demand for all the LTOs?
That’s what makes Taco Bell so great that we constantly have new and innovative and delicious craveable food for a limited time only. Occasionally something will find its way onto the menu permanently. We listen to our fans, and bring some things back.
Hiring and retention are top of mind for many U.S. operators. Is it the same internationally?
I think some of the challenges are universal around the world. Because we are a new brand, that helps us attract a great group of people who want to be part of something new and innovative. That works in our favor internationally. In Finland, we have a turnover rate of less than 10 percent. It’s a shocking number.
What is the highest sales volume international unit?
When I look around the world, the highest volume restaurants have been Australia and we only have one. It’s in Brisbane. In Finland, in Helsinki, we have a restaurant that is doing terrific.
In Thailand, will you have a core menu with a Thai twist?
Typically our formula for [global menus] is we have our core menu [Crunchy taco, crunchwraps]. Then, we will have a few items that will be locally relevant items. One of the things we are looking at [in Thailand] is our spice levels. We have mild, medium and hot [sauces] in the U.S. Well, our hot in other markets will be mild. So we’re also working on dialing up spice levels.
And, in India the new vegetarian Potaco caters to local tastes?
In India, over half of what consumers order is vegetarian. So the team had the insight to create an option for India: It’s a freshly fried potato shell. It’s a homerun hit.
[Editor’s Note: During a media tasting at the Taco Bell international test kitchen that same day, the culinary team said the fried potato taco shell is infused with local spices and is sold in India’s 17 restaurants. Other new global items from different markets include a Volcano Chicken Taco. It is a spicier version of the Naked Chicken Chalupa which is called Naked Chicken Taco in global markets. It contains lava sauce and sliced jalapenos. It debuts in Korea in August. In Shanghai, a Crayfish Taco seasoned with 13 Asian spices debuts in August.]
Will these global menu items ever come to the U.S.?
There’s definitely examples of things that start international that get tested here. French fries started international. The Kit Kat quesadilla started international. The Doritos Crunch Burrito.
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