Having refreshed its brand image, facilities, operations and menu, Del Taco has launched a marketing campaign to trumpet the changes.
The chain -- the U.S.’s largest quick-service Mexican brand after Taco Bell, according to Hoovers/Yahoo Business -- has dubbed its campaign “UnFreshing Believable,” to underscore what it says is one of its core differentiators: the freshness and quality of its food.
“While we’ve always received top marks for our value and variety, we weren’t getting credit for the lengths that we go to deliver quality on our menu through freshly prepared ingredients and a made-to-order approach,” said Del Taco CEO Paul Murphy.
Big Changes Over Past Year
A year ago, Del Taco, founded in 1964 in Yermo, Calif., launched several initiatives, starting with its first interior/exterior restaurant redesign in 20 years. (More than half of the locations have been renovated and the rest are scheduled to be completed this year.) In addition to improved esthetics, the redesign employs visual “freshness cues” that remind customers about Del Taco practices such as grilling fresh, marinated chicken throughout the day, slow-cooking beans from scratch, and freshly grating cheddar cheese from 40-pound blocks.
The chain also initiated a management reorganization focused on improving its customers’ experience, including creation of an SVP of operations and support position, new customer-oriented restaurant teams geared to increasing speed without sacrificing quality, and ongoing guest-experience surveys.
Furthermore, Del Taco has introduced two new menu platforms: a Buck & Under Menu offering 11 Mexican food items (and beverages) with prices ranging from 50 cents to 75 cents to $1; and a New Tastes Menu that is initially featuring three new products unique to the chain (a Bacon Ranch Grilled Chicken Taco, a Chili Cheese Fry Burrito and a Fiery 6 Layer Burrito).
Del Taco also offers American fast-food favorites like hamburgers, fries and shakes, and a full line of breakfast burritos.
With all of this in place, Del Taco is shifting its brand promise from value to both quality and value. “The Phase 1 operations and restaurant image improvements are the foundation, but new menus, new advertising and new products will be the invitation for current and new customers to come in and check out significant brand improvements and reappraise Del Taco,” summed up John Cappasola, Del Taco’s EVP and chief brand officer.
Multichannel Campaign Underway
The “UnFreshing Believable” campaign, from San Francisco-based Camp + King (hired as Del Taco’s creative agency last August), emerged out of customers’ expressing that they found it almost unbelievable that the chain could offer fresh ingredients at such low prices, according to Cappasola.
The campaign spans packaging; point-of-purchase, merchandising and newspaper FSI promotions; out-of-home; social engagement; and digital, radio and television ads.
It kicked off with a brand TV spot, also viewable on the brand’s YouTube channel -- an extravaganza featuring chicken-costumed, Rockettes-like dancers, cowboys and muscular teams of bean-stirrers, among other elements aimed at humorously dramatizing Del Taco’s “fresh for less” brand promise. That spot ran between April 24-28 in Los Angeles only (Del Taco’s largest market).
On April 29, a TV spot specifically promoting the new Buck & Under Menu started running in L.A. and other key Del Taco markets in California, Washington, Oregon, New Mexico, Nevada, Colorado, Idaho, Utah and Texas.
The programming focus for both spots: popular national, syndicated and local sports, entertainment, news and talk shows.
Other campaign elements include:
*150-plus billboards in L.A. and California’s Riverside, San Bernadino and Ventura counties, plus side-of-bus ads in Orange County (all running through late August).
*Traffic Radio sponsorships on key L.A. stations, promoting the Buck & Under Menu.
*An oversized insert distributed with the PennySaver on May 1 to 10,000 households surrounding each Del Taco restaurant.
*Digital ads on Hulu, Facebook and Pandora.
*A redesigned, functionally enhanced brand site that is also optimized for mobile use.
*Smartphone ads on Google and mobile display ads on various sites in the Mobile Theory ad network.
Growth, Recent Refinancing Transaction
In 2012, Del Taco -- which is in the midst of a national-expansion plan -- had system-wide sales of $608 million and operated 298 company-owned units, with 253 franchised locations in 17 states. Currently, the entire system has more than 550 restaurants in 18 states. (In comparison, the chain had system-wide sales of $568 million, 287 company-owned units and 231 franchised locations as of 2009.)
In April 2013, the chain’s parent, Del Taco Holdings, Inc., completed a debt-refinancing transaction including a $175-million term loan and a $40 million revolving line of credit.
“This transaction results in a significantly lower effective interest rate that enhances our capital structure, allowing for increased flexibility as we continue to invest in the business through growth in new and existing markets,” said Del Taco Holdings EVP, CFO Steven Brake.
Del Taco Holdings (formerly Sagittarius Brands) was created in a 2010 recapitalization, when Goldman Sachs Mezzanine Partners led a new cash equity infusion, with existing partners Charlesbank Capital Partners and Leonard Green & Partners also contributing significant new capital.