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Saturday, Dec 3, 2022

Del Taco’s Crunchtada Takes on Taco Bell

The latest product launch by Del Taco Restaurants Inc. (Nasdaq: TACO) comes with a bit of spice to it. 
The Lake Forest-based restaurant operator, the fifth largest based in OC, has released a cheeky marketing campaign for its Crunchtada, playfully going up against rival Irvine-based Taco Bell Corp. and its now retired Mexican Pizza.

Del Taco’s Crunchtada—a spin off the traditional tostada—isn’t a new item for the chain, but the marketing angle certainly is. The company is positioning the refreshed menu offering as an alternative to fans missing the Mexican Pizza, which Taco Bell stopped selling in October.  

Del Taco’s relaunch included a hotline (1-877-3-Ghosted) for fans of the Mexican Pizza who feel they’ve been ignored by OC’s largest restaurant operator, along with a limited-time promotion and Crunchtada pool floaties sold in its online shop starting May 24.

“We are very pleased with the feedback so far,” said CMO Tim Hackbardt, who rejoined the business last year. “Our Crunchtada hotline (was) posted on Instagram and has crushed anything we have ever posted before.”

As of last week, the Instagram post had been played over 47,500 times with over 120 comments. A separate Instagram post nabbed more than 1,800 likes with over 130 comments, boasting more engagement than most of its posts.

Outside of social, the creative’s also been on TV and radio commercials.
Del Taco’s agency of record is Costa Mesa-based Skiver Advertising Inc., which won the business last year.

Del Taco is valued at about $370 million; shares of the fourth most valuable publicly-traded restaurant chain based in OC have nearly doubled in price over the past year.

Market Opportunity

“In my previous consulting business, we would help chains find hidden hits that existed on their current menu. Last spring in 2020, we did an analysis of the Del Taco menu and felt the Crunchtada fit that criteria of a hidden hit. It was still doing well, even though it didn’t have a premium placement or had been promoted in years,” Hackbardt said.

The original Crunchtada first launched in 2013 and was one of the most successful launches in Del Taco’s history, according to Hackbardt.

Del Taco took what it learned from the initial launch and updated the flavor profiles with three options total, completing its development work last summer. However, it waited until a more opportune time to relaunch the item.

Del Taco is hoping the variety will help it win over fans of Taco Bell’s now-retired Mexican Pizza.

“Once we noticed a sizeable demand via the consumer outcry when Taco Bell discontinued its Mexican Pizza, we felt we could easily fill the void with not just one item, but three Crunchtadas that offer more toppings, more flavor and more value,” the CMO said. “Instead of just the kind of singular beef item that Taco Bell sold, we brought to the market vegetarian, beef and chicken options.”

The items are priced from $1 for the bean and cheese option to $3 for the chicken and guacamole.

Menu Innovation
The new menu items are one of five strategies Del Taco is leaning on to accelerate sales growth.
Other areas of focus are value, brand engagement, digital and overall convenience to the consumer.

The company’s so far this year introduced a new honey mango flavor, a limited time crispy jumbo shrimp and most recently a honey chipotle crispy chicken barbeque flavor.

Menu innovation is key for Del Taco, and any restaurant operator for that matter, as the chain eyes unit and sales growth.

The company saw total revenue for its fiscal first quarter ended March 23 rise 5.2% to $115.5 million. Meanwhile, the company swung to a profit with adjusted net income of $2.5 million in the quarter, compared to a loss of $300,000  a year ago. Same-store sales rose 9.1%, led by a 14% surge among franchisees.

Bolstering those launches have been campaigns under Hackbardt, who’s focused on injecting more personality into the brand. The executive had previously been with Del Taco from 1999 to 2003, and he noted to the Business Journal earlier this year his focus has been on bringing a bit more of the old Del Taco personality back, which he described as irreverent and fun. 

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