Taco Bell to launch an upscale fast-casual chain

Taco Bell is unveiling a new concept this summer called U.S. Taco Co. and Urban Tap Room in a move to take a bite out of the $34 billion fast-casual industry.

The U.S. Taco Co. and Urban Tap Room is a more sophisticated concept for Taco Bell and features premium tacos, spicy steak-cut fries and shakes. Each taco is a twist on classic regional dishes, from an East Coast lobster roll to Texas-style brisket. The core menu features 10 tacos and daily chalkboard specials such as the "Winner Winner," made with fried chicken lightly drizzled in "S.O.B." (south of the border) gravy and wrapped in a flour tortilla. Future locations will also include a menu of craft beer and wine.

U.S. Taco, opening this summer in Huntington Beach, Calif., is the first of what could be dozens across the country.

"Taco Bell is Mexican inspired. U.S. Taco is American inspired," Greg Creed, Taco Bell's CEO, told Nation's Restaurant News. The inspiration to create U.S. Taco came from market research that revealed a large demographic of customers who don't eat at quick-service restaurants. Instead of convincing these customers to eat at Taco Bell, the chain decided to test a new dining experience targeted toward edgy, higher-income consumers.

The new concept should not be thought of as a Taco Bell spin-off, noted Creed.

Once inside the restaurant, customers will order at a counter, choosing from a menu of chef-designed selections. It's a stark contrast from the "build-your-own" menu concept at Chipotle, which dominates the Mexican, fast-casual space. Last week, Chipotle reported its first-quarter earnings rose 8.5 percent, though food costs were up 33 percent from last year.

Tacos will be priced at about $4 each, two for $7, or three for $10. The average check is estimated to be roughly $12. By comparison, Taco Bell's average check is about $7.20.

The first U.S Taco location in Huntington Beach will measure 1,600 square feet on the beach-adjacent development known as The Strand. A 400-square-foot patio will offer outdoor seating.

Yum Brands, Taco Bell's parent company, appears eager to introduce new concepts. The company last summer opened a fast-casual spin on KFC called KFC Eleven in Louisville, Ky., and revealed plans earlier this month to open a new fast-food operation in Texas called Super Chix which will focus on premium fried chicken sandwiches and french fries.

For more:
-See this Nation's Restaurant News article

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