CHICAGO — Tacos are taking a bigger bite out of the fast-casual market. On the heels of better burgers and build-your-own pizzas comes a growing segment of street-style tacos with gourmet ingredients. In August, Taco Bell opened an upmarket taqueria with lobster on the menu, and Buffalo Wild Wings bought a majority stake in Rusty Taco, a fast-casual chain.
“We’ve really seen a heavy emergence of new taco shops that are growing at a more regional basis, even though you have Taco Bell, Taco John’s, Taco Time, lots of older brands that serve them,” said Darren Tristano, executive vice president of Technomic Inc., Chicago. “There are definitely more regional, higher-quality and made-to-order tacos that American consumers are looking for.”
Minneapolis-based Buffalo Wild Wings’ investment underscores the trend. Rusty Taco, which opened in 2010 and has nine locations, offers such items as a fried chicken taco, topped with jalapeño ranch, slaw and cilantro; a brisket taco, with queso fresco, onion and cilantro; and a black bean taco topped with pico de gallo, cotija cheese, cilantro and toasted pumpkin seeds. The restaurant also serves breakfast tacos all day, as well as beer and margaritas.
“Rusty Taco’s fresh approach to tacos truly sets this concept apart,” said Kathy Benning, executive vice president, chief strategy officer and new business development at Buffalo Wild Wings. “Buffalo Wild Wings’ investment is part of our strategy to partner with emerging restaurant concepts that have the potential for significant growth, can work throughout the country and have a highly engaged management team with a passion to grow the business.”
Acquiring a stake in the fast-casual space has become a key strategy for Buffalo Wild Wings, which also recently made a minority investment in PizzaRev, a Los Angeles-based pizza concept.
“We just believe that there’s opportunity in that space,” Benning said during the company’s analyst meeting on April 2. “It’s the fastest-growing restaurant industry segment, as consumers continually seek the quick-service-style speed coupled with a desire for higher-quality food and beverages. And this also allows us to build both brand and restaurant segment differentiation within our enterprise.”
Taco Bell took a different approach with the launch of US Taco Co. in Huntington Beach, Calif. The menu includes such upscale tacos as the 1%er, featuring lobster, garlic butter, slaw, roasted poblano crema and cilantro on a flatbread. There’s also the Hot Chick, with crispy chicken, buffalo sauce, blue cheese, slaw, jalapeño and cilantro on a flour tortilla; and the Southern Squealer, with pulled pork, peach jalapeño barbecue sauce, corn cake and slaw on a flour tortilla. Side items include thick-cut french fries served with jalapeño ranch or ghost chile ketchup and milkshakes made with such ingredients as Cinnamon Toast Crunch cereal and Mexican spiced chocolate sauce.
“The way Taco Bell is shifting toward this concept and the segment sort of goes against the grain of what American consumers have told researchers like Technomic they want, which is authenticity,” Tristano said. “What Taco Bell is doing is creating a concept, which is better than shifting Taco Bell into it, so I think that’s a strong idea, but it’s a very Americanized concept with fries and milkshakes. So it will be very interesting to see whether Taco Bell is successful in giving Americans something they think is right versus responding to what Americans actually say they want.”