WINNING THE VALUE SPACE

As the economy entered the back half of 2021, inflation began to rapidly rise across virtually every business category. Del Taco and other quick-service brands had maintained value menus ranging from sub $1 to $1-$2-$3 graduated formats. It was clear that this would not be sustainable for any quick-service brand and most of the major players were already abandoning value menu offerings. We identified this as an opportunity to steal market share with a new approach that improved the quality and variety of the value side of the menu. Ultimately, the Del Taco 20 Under $2 Menu became the leading value menu in the industry while almost all major brands abandoned their value position leaving the space open for Del Taco to own. Additionally, the engineering of the menu positively managed the effect of inflation on the bottom line for Del Taco as well.

The key components of the 20 Under $2 Menu strategy were as follows:

  • Deliver an unbelievable number of choices for the guest to cement that Del Taco is the place for value. This would include tacos, burritos, snacks, desserts, shakes, and drinks.

  • Improve the quality and flavor of those choices with ingredients like fresh guacamole, fresh cilantro and onions, freshly cooked beans, freshly grated aged cheddar cheese, freshly grilled chicken, and signature award-winning queso.

  • Keep a few items at or below $1 to retain some of the previous high-volume item pricing before the menu change.

  • The new items allowed not only $1+ pricing, but also allowed for future price increases since they were mostly between $1.39 and $1.59 each. We knew inflation would continue to impact the business over the next few years. With this foresight, the menu was more than a short-term fix and could be sustained with a $2 ceiling.

  • Additional products would drive a higher check due to low-friction add-ons and they would also drive additional transactions due to the rising trend of afternoon snacking.

  • Add-ons with flavorful items like these would contribute to the overall eating experience and preference for visiting the brand through the abundant variety.

  • Menu trade-down was always mitigated by highlighting craveable premium items on the menu merchandising balancing the Del Taco barbell menu strategy.

We hit the message of Del Taco being the place to beat inflation with this powerful creative that drove consumer buzz, awareness, and significant same-store sales results.