YUM! Brands owned Taco Bell opened its first location serving alcohol in the Wicker Park neighborhood of Chicago this week. The new Taco Bell model is dubbed “Taco Bell Cantina” and features a drink menu offering beer, wine and three flavors of “twisted freezes” with the option to spike it with rum, vodka or tequila. In addition to the alcohol, the Chicago location also features an updated modern interior with an open kitchen, as well as a menu with small bites intended for sharing.

Not only is alcohol a completely new area of business for Taco Bell, it also is an environmental change for the company, which has traditionally avoided opening locations in dense urban environments. What prompted the change? Taco Bell has explicitly stated the new location is designed to attract Millennials.

The Millennial Draw

63% of Millennials wish to see more limited service restaurants offering beer and wine

New interiors and alcohol offerings are certainly being used as a way to draw in Millennials, many of whom have been visiting fast casual restaurants instead of quick service restaurants (QSR) due to the fact that a number of fast casuals already serve alcohol. Mintel research indicates that Millennials tend to drink more than older consumers, with 36% of Millennials drinking six or more drinks either at-home or away-from-home per week. Additionally, they are more open to having beer or wine at limited service restaurants. In fact, 63% of Millennials wish to see more limited service restaurants offering beer and wine.

Taco Bell typically avoids locations in dense urban environments due to size constraints. The Cantina model does not have a drive-thru, thus having a smaller footprint than traditional locations. Taco Bell is scheduled to open another cantina in San Francisco later in September (the San Francisco location will only serve beer and wine). If the Cantina model proves a success, it could foreshadow increased alcohol offerings at more QSRs throughout the US.

What It Means

Taco Bell serving alcohol represents a huge shift for QSRs and foodservice as a whole. Restaurant analysts have long classified QSRs by the size of the check, if the meal is ordered at the counter and lack of alcohol. With this change, the classification of different restaurants must also change and the dividing line for QSR becomes even more blurred. This also reflects an industry shift of new alcohol menus at foodservice establishments that traditionally do not serve alcohol. For example, a number of movie theaters now sell alcohol; a Denny’s in Manhattan has a full-bar offering – including the $300 Grand Slam served with Dom Perignon.

Caleb Bryant is a Foodservice Analyst at Mintel, specializing in the foodservice industry. Caleb authors reports focusing on changing consumer attitudes, industry news and flavor/ingredient trends within foodservice.

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