Del Taco's rebranding effort focuses on quality/value balance

In April, Del Taco announced a brand re-launch that includes two new menu platforms, a new restaurant design, customer service initiatives and a revised marketing strategy.

CEO Paul Murphy and Chief Brand Officer John Cappasola provided QSRweb with an overview of Del Taco's rebranding initiatives, which are meant to differentiate the brand in a highly competitive, value-driven QSR space.

The menu

The new menu platforms, called the Buck & Under and New Tastes, are aimed to position Del Taco as a "quality/value" brand, according Murphy. The Buck & Under features 11 items starting at 50 cents, including a mini cheddar quesadilla, value bean and cheese burrito, double beef classic taco and real strawberry lemonade.

The New Tastes menu highlights new items such as the bacon ranch grilled chicken taco, chili cheese fry burrito and fiery 6 layer burrito.

"A lot of what we have done is aggregate great value on the menu, between food and drinks. This fits in well with what's going on in the macro economy," Murphy said. "Most QSRs, their version of value starts at $1 and goes up. Ours starts at $1 and goes down."

He added that the quality of the food won't change with the lower prices — items will be prepped every day in every store, cheddar cheese will be grated from blocks, pico de gallo will be made fresh, etc.

"If we start with fresh and serve with value, it embodies who we are as a brand and it also creates an aspiration to what we need to push ourselves to be. A lot of fast casual brands are getting credit for quality and this is how the competitive set is reacting and where the consumer is going. This is what we need to hone in on," said Cappasola.

He adds that Del Taco has a strong pipeline of products that will likely rollout within the next 12 to 24 months.

Restaurant remodel

The re-imaged restaurant design program is the first major facilities refresh for Del Taco in 20 years. It features contemporary colors and expands on the "freshness" theme. It also includes redesigned exterior. More than half of the chain has been re-imaged so far, with the entire system expected to be done by the end of this year.

Del Taco drew its prototype up from consumer research, examining what design elements would most resonate with its guests. The company also tinkered with the design to make sure it was affordable; Murphy said the remodel averages about $45,000 to $50,000, and so far it has "definitely met expectations."

"It was just time to remodel. We have to make sure our restaurants are attractive and inviting as any other restaurant on the block," he said. "If you make a quality promise, you need to make sure it's backed up when you drive up to a restaurant. Plus, it was a great way to signal a change at the brand — it supports the quality/value message."

Operational/customer service changes

In tandem with the remodeling efforts are operational changes to improve the guest experience. Del Taco put a Guest Experience Monitor (GEM) in place last year and added new processes and procedures based on those scores.

"We introduced a travel path into the store and made a checklist to drive transaction efficiencies to do a better job of times and accuracy. With GEM, we are able to get that feedback and address it," Cappasola said. "This was missing from the brand; it was a blind spot."

If an issue arises that is systematic, the company will follow a broader procedure. If it's a single store issue, the company works with the general manager.

"We've moved to a business model that is completely customer centric. The platform (GEM) gets us beyond brand-level sentiment to restaurant-level sentiment," Cappasola said. "We have great products, but without moving the needle on improving the guest experience, it is harder to get credit in the space and grow incremental revenue streams."

Marketing and mobile

Del Taco is also molding its marketing message around quality, value and freshness so customers know what the brand is up to.

"We realize the quality and value piece is a bit unbelievable. Consumers have said it's unbelievable. But they've also said it's a great story and one we should tell. This is our differentiator," said Cappasola.

Much of the message will come from social media, including Facebook, Twitter and, new this year, Instagram. Cappasola said Del Taco's fans are socially engaging and want to interact and have fun.

"It's good for a mid-tier brand like us because we're not going to go head to head with the big brands' media budgets. But that doesn't mean we can't compete with brand sentiment and buzz in the social space," he said.

Del Taco is "just now dipping its toe" in the mobile space. In the past 15 months, the company has been testing various strategies such as mobile advertising and text message offers.

"The reality is people are coming into restaurants, they want more convenience and better access for more information, and they want to get rewarded for their behavior. We want to be a part of all of this," he said.

Growth

All of these upgrades are setting the brand and its franchisees up for growth, according to Murphy. The franchise base has been positive with all of the changes and, "for the most part," has been willing to take the holistic approach.

The company will grow beyond its near-550-unit footprint in the U.S. through both new franchisees and larger franchise agreements.

"Part of this brand relaunch was to allow the company to enter into a growth phase. We have a lot of room to grow," Murphy said. "And we feel like we've addressed a lot of fundamentals in the business to grow the right way. As with anything, we just have to execute."

Read more about branding efforts.

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