235. How To Bring Back A Nostalgic Brand

In this episode, Barry Westrum - CMO at Taco John’s, discussed the brand's current position and strategies for growth in the restaurant industry. With a focus on providing higher quality options in the quick-serve restaurant (QSR) sector, Taco John's aims to capture a niche between fast casual and traditional QSR chains. This write-up delves into the key points discussed during the interview, highlighting Taco John's efforts to bring back a nostalgic brand while catering to changing customer preferences.

The Taco John's Strategy:
Taco John's has historically been viewed as a fast casual concept, blurring the lines between QSR and fast casual. However, the brand now firmly identifies itself as a QSR with a commitment to delivering higher quality offerings. While lower-end QSR chains compromise on product quality and fast casual chains focus on higher-end options, Taco John's aims to fill the gap by providing a higher quality, faster alternative with the convenience of a drive-thru. This positioning is expected to drive long-term success for the brand.

Embracing the Drive-Thru:
The COVID-19 pandemic brought about a shift in consumer preferences, with a greater emphasis on takeout, drive-thru, and quick service. Taco John's recognized this opportunity and embraced the drive-thru aspect of its business. By enhancing their drive-thru operations, Taco John's has achieved parity with other competitors, with approximately 75% of their business now coming through the drive-thru. The brand has invested in innovative technologies to improve speed, consistency, and order accuracy, ensuring a seamless and efficient experience for customers.

Balancing Quality and Value:
Taco John's strategy revolves around positioning itself as a quality/value brand in the QSR market. They have gained recognition for their higher quality ingredients and are now focusing on communicating their value proposition to consumers. By offering higher quality menu items at affordable price points, Taco John's aims to cater to customers seeking quality food at a reasonable price. Their value menu, featuring hand-cut sirloin steak, crispy fried chicken, and handmade pico de gallo, has been instrumental in changing consumer perceptions of the brand's affordability and attracting repeat customers.

Expansion Strategies:
With over 400 locations across 23 states, Taco John's has established a strong presence in the Mexican QSR segment. To continue their growth trajectory, the brand has forged a partnership with Meritage, Wendy's largest franchisee, to open up to 50 new units over the next five years. This expansion is focused on tapping into untapped markets outside their core regions. Taco John's has found that their brand resonates with consumers beyond their traditional markets, and they aim to position itself as a compelling middle ground between Taco Bell and Chipotle, catering to consumers seeking higher quality options.

Breakfast and Digital Innovation:
Taco John's has recognized the potential of the breakfast daypart and has invested in offering portable, high-quality breakfast items such as their meat and potato breakfast burritos. These breakfast options have gained popularity, especially for catering and delivery, contributing to the brand's growth. In addition, Taco John's acknowledges the importance of digital platforms in today's market. Their app has become a tool for increasing customer engagement, loyalty, and frequency of visits, and they foresee the application of digital technology in enhancing the breakfast experience and driving further growth.

Recommendations on how to bring back a nostalgic brand like Taco John's:
1. Embrace the quick-serve restaurant (QSR) positioning: Taco John's should firmly establish itself as a higher quality, quick-serve option within the Mexican quick-serve marketplace. This will help differentiate the brand from lower-end QSRs and fast-casual competitors.
2. Focus on drive-thru efficiency and convenience: Given the shift in customer preferences towards takeout and drive-thru during the COVID-19 pandemic, Taco John's should continue to prioritize and invest in drive-thru operations. Implement technologies and strategies to improve speed, consistency, and customer experience in the drive-thru, such as advanced ordering systems, suggestive selling, and streamlined preparation processes.
3. Offer a value menu with higher quality ingredients: Taco John's value menu has been successful in improving consumer perceptions of value and affordability. Continue to innovate and offer higher quality ingredients at attractive price points, catering to consumers who seek both quality and value in their dining choices. This approach can help Taco John's appeal to Gen Z and alpha demographics who may be price-sensitive.
4. Expand into untapped markets: Taco John's should consider expanding into second-tier and exterior markets where the brand has been less present. Utilize partnerships with experienced franchisees, like the one with Meritage (Wendy's largest franchisee), to open new units in strategic locations. Leverage the brand's nostalgic appeal to attract consumers who have a connection to the Midwest or who are looking for a quality and affordable Mexican fast-food option.
5. Capitalize on breakfast offerings: Breakfast presents a growth opportunity for Taco John's. Enhance and promote breakfast menu items, particularly portable and flavorful options like breakfast burritos. Highlight their convenience, quality, and suitability for catering and delivery. Leverage digital platforms and the brand's app to drive breakfast sales by offering incentives and personalized offers to customers.
6. Prioritize digital presence and app development: In line with industry trends, continue investing in online ordering, pickup, delivery, and third-party integration. Enhance the digital experience for customers through a user-friendly app, loyalty programs, and targeted promotions. Leverage the app to increase customer frequency, average spending, and overall engagement with the brand.
These recommendations aim to position Taco John's as a nostalgic brand that combines quality, value, convenience, and digital innovation to cater to evolving consumer preferences and stand out in the competitive Mexican fast-food market.
The Future of Taco John’s
Taco John's is repositioning itself as a higher quality, value-driven QSR brand, leveraging its strengths in the drive-thru market and emphasizing their commitment to providing affordable, quality menu options. With strategic partnerships, expansion plans, a focus on breakfast, and innovative digital initiatives, Taco John's aims to attract customers seeking a nostalgic brand experience with a modern twist. By combining convenience, flavor, and a touch of nostalgia, Taco John's strives to capture the hearts and taste buds of both loyal fans and new customers in the competitive Mexican fast-food market.