Every single item on Taco Bell’s menu contains, essentially, the same five or so ingredients: some type of tortilla, meat and/or beans, tomatoes and lettuce, sour cream, and cheese. With such a small array of inputs, how and why is the fast-food chain so widely renowned for being among the greatest and most successful innovators in the world? One key is the company’s recognition that new product iterations can introduce some change, but not too much of it. The company adopts what it calls the Distinctiveness Rule: “You can change either the taste or the form” of a product that consumers already love, “but you can’t change the taste and the form.” Thus, their innovations are always relatively incremental, so that fans who are already satisfied with the crunch and shape of a taco can have them, just with the novel flavor of Doritos added in, and those who adore the cheese ratios of a regular quesadilla can experience the benefits of eating a Crunchwrap Supreme with less mess. 

Such a rule might make the process seem simple. It is, of course, anything but. Taco Bell hires hundreds of engineers, chefs, and scientists to staff its Innovation Kitchen; collaborates with Frito-Lay’s similarly massive team of innovators to develop new crunchy taco shell options; solicits input from consumers through multiple channels, which it analyzes in great detail; and runs nearly constant focus groups to test its latest creations. The analytical process can take literally decades. A case in point is the Crunchwrap Supreme. The Taco Bell product developer who came up with the notion of folding a tortilla into a hexagonal shape, so that all the fillings would be contained within it, began talking about her idea in 1995. It took until 2005 for her to devise a folded design that would remain closed rather than popping open (harder than it seems!), and then convince her bosses to introduce it to the menu. Once they did though, it sold 51 million products within six weeks.

Although the immensely popular Doritos Locos Tacos came to market a bit faster, after the idea first arose in 2009, it still took three years to reach a point that it was ready for consumers. A key stumbling point was figuring out how to get the Doritos seasoning to stick on a taco shell, without leaving people’s fingers stained orange. The in-depth development process relied on computer-simulated experiments, along with customer feedback and real-world attempts. The result was not just one of the most popular product introductions in the history of fast food but also a patent for the application process. Furthermore, while working on the shell itself, Taco Bell innovators also solicited help from packaging experts to create a taco “holster” that would protect consumers’ fingers from discoloration. 

These examples are obvious and well-known successes. But Taco Bell estimates that it considers several thousand new ideas each year, only around 70 of which undergo actual tests. Of those 70 or so product possibilities, only 10 ever make it on to menus—which is no guarantee of success either. Despite in-depth research into the appeal of blue corn tortillas, the Midnight Melt left consumers confused and unwilling to try it. But with its determination to study, analyze, anticipate, and drive the preferences of the 42 million people who visit Taco Bell restaurants each year, the company can, its own words, “change the eating habits of an entire nation.”

Discussion Questions

1. Do you eat at Taco Bell? If so, how do you react when it introduces a new menu item—do you try it right away? 
2. What are the benefits of prioritizing incremental innovation (form or taste, but not both) for Taco Bell? 

Sources: Antonia Hitchens, “Taco Bell’s Innovation Kitchen, the Front Line in the Stunt-Food Wars,” The New Yorker, April 17, 2023