Taco Bell Drink Offerings to Entice Millennials

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Taco Bell’s announcement last week that alcohol is part of its new urban restaurant format will reinforce how the battle for on-premise drink sales continues to intensify. Pending approval of the liquor license application, the franchised location in the Wicker Park neighborhood of Chicago set to open this summer will menu “Twisted Freezes” involving tequila, rum or vodka. Two of the drinks include Mtn Dew. 

Featuring alcohol on the menu will undoubtedly provide the location a point of differentiation and work with its more upscale elements, including an open kitchen and an appetizer menu; the unit will not have a drive-through.  Staff will be trained in the National Restaurant Association’s ServSafe Alcohol program, and mystery shoppers will also monitor alcohol service practices. The drink offerings play into the Millennial consumer’s interest in sourcing adult beverages across a range of foodservice outlets. Taco Bell joins the likes of other limited-service concepts including Chipotle and Starbucks in tapping into adult beverage trends to ramp up their consumer appeal and drive more frequent visits. 

Yum Brands Inc., the company behind Taco Bell, is testing beer, wine and drinks called "mixed alcohol freezes" at the new Chicago Taco Bell location scheduled to open this summer, according to the Associated Press. And according to Thrillist, the liquor license application included descriptions of “Twisted Freezes” with rum, tequila and vodka.

Alcoholic drinks will be served to eat-in customers only, in a different cup than virgin drinks so employees know if anyone is trying to sneak one out the door. The new location will also have a decidedly different look compared to other Taco Bell locations, including no drive thru. The interior, similar to designs launched at Taco Bells in Tokyo, Seoul and the U.K., will feature exposed brick walls, murals, communal tables with wooden stools and pops of accent colors such as bright purple and teal.

Today’s younger consumers are most receptive to the notion of ordering an alcohol drink in limited-service restaurants, according to BarTAB. Three in 10 (29%) of Millennial consumers say if available, they’d order drinks every or nearly every time they visit a fast-casual eatery, compared with two in 10 (21%) consumers overall. Similarly, Millennials overindex on likelihood of purchasing drinks in fast-food restaurants and coffee shops, if available, as compared with the general population.

Given that Millennials are among the most cost-conscious consumers of on-premise adult beverages, full-service restaurant operators would do well to assess their drink menu value proposition and count fast-food and fast-casual restaurants offering alcohol among their competitors.