Taco Bell’s Mexican Pizza selling out, marketing and the supply chain

‘You never know’

Doug Reifschneider, an independent marketing consultant with Chief Outsiders and a former marketer at restaurant chains Firehouse Subs, Pita Pit USA, and Fazoli’s Italian Restaurants, said he was surprised Taco Bell miscalculated demand, given its loyalty data and sophisticated understanding of its customer.

“In today’s world, with all the data we have, marketers and their business intelligence counterparts should be able to model and predict the sales velocity of promoted menu items,” he said. “Smaller chains and independents don’t have the resources to model promotions and menu item velocity, but Taco Bell does.

“I’m sure supply chain issues didn’t help, but perhaps marketing, supply chain and operations were not aligned at the hip to accurately predict and deliver what they knew their customers wanted,” he continued. “That said, even with the data Taco Bell has, I learned in the last 25 years that you never really know how customers are going to react. “

Get your tickets for the 2022 Leading Women event, held in New York on Aug. 9

Denise Lee Yohn, an author and brand leadership expert, said the Mexican Pizza episode “shows how companies should ensure they can deliver on their promises if they want their campaigns to drive sales and business results.”  She lauded Taco Bell just the same, predicting that the supply disruption on top of the creative approach to the promotion will only add to consumer awareness and hype once the supply chain stabilizes.

“Taco Bell has been a real innovator in social media and the creativity of this campaign is yet another groundbreaking effort, but in the current business environment, supply chain, not marketing, has become the key factor in the customer experience,” she said, adding, “the awareness and hype on social media that the company has benefited from might be more valuable in the long run. The disappointment customers might feel and then choose to express on social media will only make the product seem even cooler.”

Some Taco Bell locations were selling 500 or more Mexican Pizzas per day since the reintroduction, according to a report issued this week by restaurant analyst Mark Kalinowski of Kalinowski Equity Research. “Many of these same stores apparently tended to sell 20-30 Mexican Pizzas per day on average before the item was discontinued in 2020,” he said.

That prompted his firm to revise its Taco Bell same-store sales forecast for the current second quarter from 4% to 5%.