Breaking Down Taco Bell’s Innovation Kitchen | EP 305 | The Hustle Daily Show

Key Takeaways

you may think of Taco Bell as you know a place where drunk college kids go to detox after midnight but the fast food chain has actually been doing some serious innovating in recent years behind the scenes we're gonna break down what the chain has done right to make things work so Robin Mark let's dive into our top story here Rob I want to break this down a little bit but before I do this just just to recap some of the high level stats here Taco Bell has this Innovation kitchen they've got 12 Chef scientists they've got 60 food Innovation developers this is obviously there's some magic happening beside the scenes at Taco Bell here absolutely yeah I mean I think the coolest thing about this is you think of like an innovation kitchen is something that like some Michelin star restaurant would have right I think right you've broken down the like Shake Shack has one and Shake Shack is kind of like the bougie like affluent version of fast food for sure I think the kind of combination of Taco Bell which I think most people look at is kind of like this low brow fast food player and an innovation kitchen is just a really fun juxtaposition and I think if you've been to Taco Bell at any time in the last couple of decades you've probably seen some results of this Innovation kitchen they have really really creative menu items it's it's amazing yeah and we're sort of in a golden era of creative menu items for better or worse some of them are a little kitschy like Burger King's got a bacon sundae Pizza Hut has hot dog soft crust and you know KFC got some headlines from the for their fried chicken flavored nail polish whatever that is but over at Taco Bell like it's not just the Kitsch like people are actually enjoying their experimental items totally I mean I think like the Crunchwrap Supreme which we'll get to in a little bit it's like an unbelievable innovation in Mexican Cuisine it's truly incredible I've loved it for like two decades now and I mean you got that I think Mark is probably gonna chime in here in a minute we were talking about the Frito burrito earlier I mean tons of amazing yeah menu items have resulted from this kid kitchen I had a buddy who used to go to Taco Bell literally all the time and I think he actually applied they had a job opening for I think like either a food tester or somebody to work in their Innovation kitchen and he applied and he was so bummed out when he didn't get it it's I think these roles are actually really highly coveted because it sounds like such a up yeah of course so let's break down some of the key components here what what is Taco Bell doing right so I think if you look at what Taco Bell's doing right you're going to see a lot of strategies we would typically associate with like startups and stuff like that so like one of the big ones is iteration so Taco Bell annually releases 10 new products but to get to those 10 their Innovation lab scientists generate thousands of ideas and test about 70 of them so we talked earlier about how this would be such a fun job I mean just think about that you're literally running through thousands of ideas trying to figure out which ones are actually viable and then actually testing 70 new food items super super cool they're also extremely patient so they don't just choose anything I think you probably got that from the first bullet but the Crunchwrap Supreme was tweaked in the lab for 13 years until it made the cut and so fast for some reason yeah I will say that 13 years was worth it because it is a perfect fast food item not only does it taste amazing it's actually really hard to spill it like it's puts its construction it's perfect it's I can tell you're a connoisseur yeah it's a perfect fast food item if I'm being honest they also pay a ton of attention to details so scientific Precision is Lent to the ingredients material properties from bounce to juiciness spring back to spreadability and every ratio of all of their menu items is carefully considered like how the balance of fats and acids impacts mouth feel and brain chemistry so these guys are actually thinking about that if you have this kind of feeling after eating Taco Bell like man I could really go for another one of those that's probably because Innovation kitchen figured out exactly how to make you feel that way it's kind of creepy yeah all right well you know there's a few other things to do in here they break convention you know they really push the technical limits of what food can be like you mentioned the composition of the Crunch Wrap not leaking or anything like that and they also just you know have a hyper focus on on consumers they're hyper aware of who their customers are and and what they want they play on things like Nostalgia and emotion in their menu items one of my favorite things that they do too is they take kind of the logistics of their locations into consideration so they have some practical constraints that they put into this that helps them kind of Whittle down this list ultimately they have to consider the cost the quantity and preparation of each of their new menu items as well as the speed and if it can be prepared in one minute like that's something that they take really seriously I think we did a Sunday story on drive-through times and Taco Bell was one of the fastest and right right it's no surprise they factor that into literally every new thing that they put on their menu yeah and and all of this that we just mentioned has helped Taco Bell balloon into this 15 billion dollar a year in annual sales chain that serves 42 million people every week obviously you know fast food chains did very well during the pandemic the drive-through model other restaurants tried to sort of adapt to that Mark I want to bring you in here because you've written a lot about p Pizza Hut's Innovation and innovation in the pizza space what kind of parallels are you seeing here well it it's interesting I what I'm saying is that the Taco Bell of 2020s is the Pizza Hut of the 1990s basically and it's it's interesting because their own you know both by the same parent organization yum but Pizza Hut has not been doing nearly as much Innovation you know you mentioned that like that hot dog stuffed crust pizza so they they kind of do these things that are just like extra touches on something that they used to do or I think they brought back the big New Yorker not that long ago which obviously that came out I think originally in the late 90s maybe the mid 1990s so in the 90s I talked to several people from Pizza Hut this was a couple years ago now but they had like a similar kind of schedule and and goals to to what this big New Yorker piece described about Taco Bell's kind of innovation setup where they wanted to have a new invention a new invention come out every six to eight weeks and they would they would spend 18 months testing different kinds of pizzas and they brought a whole lot of thanks to the fold that we take for granted as being very normal now including like barbecue pizza and cheeseburger pizza which are just kind of routine menu items but they were essentially brand new especially at scale in the 1990s and then they came out with like the bigger things like the Sicilian where they figured out a way to like make garlic like stay inside the crust which involves some heavy engineering and there there was the big New Yorker which Donald Trump did the ad for this people may remember and stuffed crust which changed the game entirely but when you think about since then they really haven't what we've seen in the pizza space is like Innovation when it comes to like delivery and just getting it to your house faster and making you feel better on its way to your house and and Domino's is is much more of a leader in that than Pizza Hut so I think it's like really impressive and it it shows you know Taco Bell has become this Juggernaut like you were saying 15 billion dollars a year and when you're coming out with new things and appealing to a wide range of customers like it just makes a lot more sense and you know Pizza Hut struggles over the last few years are pretty well known yeah yeah it's interesting when I read this story my mind also immediately went to Shake Shack we've written about innovation in in different spaces as well Shake Shack Rob like you said it's it's like the bougie you know fast casual chain but a few years back in 2019 I went to Shake Shack's Innovation Kitchen in New York it just looks like a regular restaurant from the outside and then you walk in you get on these stairs and there's this giant industrial kitchen where these entrepreneurial-esque chefs are just making these experimental burgers and stuff and and it's really just a place where chefs are given free reign to experiment and create new items they test them in hyper local markets and do these little micro a b tests with Burgers they see what works and they create these new things and it seems like you know in in fast food there's sort of this informal Mantra right now you know the bigger you get the smaller you have to act so you see a lot of Goliath chain remains sort of reverting back to a startup mentality and trying to get back to the roots of really creating new things totally and I mean one thing that kind of shines through this piece is just how much fun this is I think we we had a piece a while back in the Sunday about how Flamin Hot Cheetos were created and that was a Sunday right Zach sorry sidebar yeah I think so yeah yeah that story by the way had had a few that that man's story has been called into question since then so interesting interesting the bigger takeaways that these ideas can come from anywhere like ideas for new Cuisine new flavors like new mixes and new ways of blending menu items can literally come from anyone yeah and I just think it's so cool to see Taco Bell innovating like this went to to your point earlier and I guess Taco Bell's kind of doing it on both axes like we wrote about how Taco Bell has that like two floor restaurant concept where you drive through underneath and they use elevators to deliver your food it seems like everybody else is kind of focused on Logistics right now like you said about Dom knows like everybody just wants to get you your stuff fast and conveniently but it's really cool to see Taco Bell kind of pushing the boundaries for what their menu can actually include they're keeping the American Spirit Alive Innovative they really are exactly yeah and I don't mean to sound like a douche by saying this but I don't know there's just something kind of funny about this to me like that it takes 13 years to develop a Crunchwrap Supreme and there's like a team of scientists food scientists working around the clock to make this a special thing or you know just like that Pizza Hut is seen as this technological Savant you know that has brought great leaps technological advancement to delivery methods and things like that you never really know where you're going to find true Innovation it kind of reminds me a bit this is tangential but like how you know like pornhub or something is this considered this huge innovator in technology you know like a lot of like great leaps in streaming technology come from like unexpected places like that absolutely it reminds me of I don't know if any if we have any Guy Fieri fans here but triple D Diners Drive-Ins and Dives it's obviously kind of like low brow like serialized TV but when you look at the business implications of diner drive-ins and dives the places that they feature on there say that their sales pop by like double pretty much like regularly for years after they land on that show so it's kind of just like this Goofy concept but then when he leaves like their business is completely transformed it's really wild I love this I love situations like this where you have kind of like this Goofy brand and underneath it there's some real kind of business genius going on yeah absolutely all right that's gonna do it for us today folks thanks for tuning in to the hustle Daily Show we're a proud part of the HubSpot podcast Network we've got a lot more Tech and business coverage for you over in our newsletter if you're not subscribed go get yourself signed up at the hustle.co email that's the hustle dot Co slash email [Music] [Applause] foreign