A healthy Taco Bell is not believable

If you look at the fast food marketplace, the brands – McDonalds, Burger King, Wendy’s, Taco Bell, etc., – are in chaos.

And that’s being kind.

They are fighting with every last bit of strength to reposition themselves in the marketplace as sales are dwindling.

McDonalds, for instance, is offering its breakfast menu all day. Now, you can get that Egg McMuffin as a midnight snack, which I’ve described as just a Band-Aid.

The new move by Taco Bell.

The new trend in fast food is to provide food that’s healthier for you than what chains normally offer, even though studies have proven that consumers usually still opt for the fatter foods. In fact, the main problem is that fast food chains don’t have the permission to be accepted as healthy by consumers. Even McDonalds failed to gain traction going that route, potentially damaging its brand.

Healthy Taco Bell
Yeah, cage-free eggs will make this healthy.

Taco Bell has now announced it is committed to using cage-free eggs in the menu items at all of its 6,000-plus restaurants by this time next year. Let’s just assume that cage-free eggs are healthier, does the Taco Bell customer care? More importantly, will the cage-free eggs get someone who thinks of Taco Bell food as worthless crap into the store?

I feel resolute in my belief that one will never believe in a healthy Taco Bell. No amount of cage-free eggs will change my assumption nor the assumption of many others.

When you order a Biscuit Taco Combo, does it matter what kind of egg you’re eating? Nope. Each bite of that 870-calorie monstrosity isn’t anywhere near being healthy. Don’t fool yourself.

Think about this: The fast riser in the industry is Hardee’s (or Carl’s Jr., depending on where you live). It has positioned itself as the opposite – “Eat it like you mean it” – and it’s doing wonders for the brand.

I’m not saying others should follow that example, except that the message is a brand one. Cage-free eggs is a menu item and chains that attempt to out-menu their competition will find themselves changing to something else down the road.

McDonalds fails to be believable

McDonalds fails. Brand problems.

McDonalds Fails
McDonalds Fails is a statement no one believed could happen

McDonalds seems to be losing share to other fast food and casual restaurants. Not too surprising from my perspective because the amount of competition has increased beyond belief. The choices for quick and other poor food choices has exploded.

There is even a new major player in a gas station (Sheetz). The category is rife with new entries and new day parts. It seems that everyone has entered the breakfast category.

One chain tried to create a Fourth Meal category, hoping to attract the morbidly obese. Some chains are now available 24 hours a day for the sudden need to get a burger and a thick and frosty drink after you unexpectedly wake up to pee at 3:30 am.

So what is the news for today? McDonalds fails is the news. McDonalds is repositioning itself as vegan. You think I am kidding? Well, actually I am because it would be absurd for McDonalds to claim such a position. They are actually moving into a position of quality ingredients.

To my thinking, it might just as well say it is vegan. But the truth about how McDonalds fails is almost as absurd. (Read another recent blog on McDonald’s here)

The art of branding with importance is a subtle formula. What you claim must be of highest emotional intensity to the target audience you wish to influence and you brand has to have an innate permission to claim it as true. I’m not sure of the validity of either support points for McDonald’s new position de jour.

McDonalds Fails Again

McDonalds fails. Ronald McDonaldRemember when McDonalds was about herd mentality? When the golden arches told us how many millions of our fellow foodies had been server?

How about when McDonalds was all about kids? Ronald McDonald and the Hamburgler all got their start here.

Hamburgler. McDonalds fails
The Hamburgler is trying to grow up

(Read an interesting update on the Hamburgler here). Happy Meals replaced the Big Mac as the signature dish. Playgrounds sprung up at the front of nearly every store.

Then McDonalds decided to try a dual strategy and excite adults with its Arch Deluxe burger.

McDonalds Fails Arch Deluxe
The Arch Deluxe was a monumental failure

In the past, a statement like McDonalds fails would have been absurd in itself.  No one REALY paid attention to the changes because McDonalds was the 800-pound gorilla who, it seemed, could do no wrong. It just ate everyone else’s lunch (pun intended).

But more scrutiny is on the aging chain now as its market share continues to slip. Operations and process improvements won’t save it this time. Possibly all McDonalds has going for it is a menu like everyone else but better locations.

McDonalds fails and Papa JohnsHopefully, McDonalds has great research indicating that better ingredients is the highest emotional intensity in the category.

I doubt that it is.

After all, The forgettable Papa John’s brand has been claiming the same thing for years with a massive TV spend that has the founder and owner in our face repeating the inane line at every turn.

Papa John’s spends more than any other pizza chain and yet it has never been able to get out of the less than $10 pizza wars. In other words, Papa John’s still competes on price. That is all it has going for it.

McDonalds Fails— Unbelievable Claims

mcDonalds failsThe problem for Mickey Ds is that the claim is unbelievable in its current brand’s permissions. No one thinks it has better ingredients and quality food.

We all believe it is mass produced hockey puck-like food. What’s in those shakes (that they can’t call milk shakes)? How many beaks and chicken feet are ground up and reformed into nuggets? What’s a McRib? What part of the sow does that come from? The ribless part?

Once you lose the brand myth from those that identify with you… well you have lost all of your equity. McDonald’s needs a brand makeover and not the costume festooned Halloween-like change it is proposing now.

Taco Bell, breakfast defectors

Taco Bell, which has a disadvantage in entering the breakfast daypart, is taking that disadvantage head-on with its new campaign asking consumers to be breakfast defectors and eat something different at Taco Bell.

The disadvantage is that Taco Bell does not have brand permission to enter the breakfast segment because of its name and brand equity. It is about cheap Tex-Mex food, usually eaten by night owls on their late-night visits.

That has been enough to make the fast food chain a success. But, as I’ve explained before, the only daypart with opportunity in the slipping fast food industry is breakfast. That’s why you’ve seen more of the chains target their marketing dollars to getting more customers for breakfast.

Taco Bell has struggled in this area because of its lack of brand permission, but the new campaign is interesting because it is positioned against the rest of the market while leveraging its own equities.

That’s one of the tenants of any brand marketing. (Or any kind of marketing, for that matter.) To be a true choice, you must be positioned against the other options in the market.

The Taco Bell Breakfast Defector campaign relies on a belief

What Taco Bell is doing here is aligning itself with a belief, that all fast food breakfast is basically the same, and using its own brand equity to say what it has is different. Defect from breakfast and choose differently.

It must be working because, even though Taco Bell has been serving breakfast for more than a year now, market-leading McDonald’s has recently taken to social media by offering consumers (at least in some selected markets) a free Egg McMuffin if they bring in their Taco Bell breakfast receipt.

McDonald’s has been having its own problems, which are reflective of the industry itself. Sales all across the board are down and McDonald’s is responding by paring down its menu to offset what had previously been an industry trend: Adding more and more menu items in an attempt to stave off lost market share. But in doing that, chains have lost whatever equity they’ve had.

The major problem most of the fast food brands have is that they don’t know who they are for or what their brand means. The brands basically stand for cheap, quick food today because the expanded menus told consumers that.

At least Taco Bell has an understanding of its brand, even though I suspect its lack of brand permission will prevent it from being a market leader. The chain also understands the customer base (tired of the same old thing for breakfast) and that what it offers that is different.

Fast food brands should take notice because breakfast consumers are defecting.

What Kellogg cereals (and others) need to do

On this snowy and cold North Carolina Friday, I wanted to point out a story in Bloomberg Business about the rise and fall of Kellogg, the top cereal-producing company in the U.S.

As we’ve noted in our own study of the cereal market, the industry has bottomed out as consumers have, ironically, found healthier and more convenient ways to eat breakfast.

I say ironic because when W.K. Kellogg first founded his company, it was to give consumers a healthier and more convenient alternative to the leftover meats they were eating in the early 1900s. Now, with Kellogg’s top-selling cereal being Frosted Flakes, the cereals are less healthy and convenient than simply grabbing a yogurt or breakfast bar on the way out the door.

Fewer and fewer people are having this for breakfast.
Fewer and fewer people are having this for breakfast.

What is interesting about the Bloomberg article, which tells the inside story of Kellogg cereals, is how much Kellogg has lost its way as a brand. You see, brands aren’t just marketing endeavors. They are also the compasses that direct everything you do, from product development to marketing to what you stand for (and who your customer represents).

In Kellogg’s case, it went so far into the unhealthy, sugar cereals that it got on the wrong side of history. It didn’t help that it tried to enter the health market by buying Kashi – then transforming the brand into Kashi Chocolate Almond Butter cookies and even Kashi frozen pizzas.

Talk about not understanding the brand.

But the problems of the cereal companies are larger than how to handle its individual brands. What Kellogg and its competitors (such as General Mills, which has had tremendous success with its Cheerios brand) need to consider is what they should own.

Right now, they own that spot where dying brands like Radio Shack, Blockbuster and others were several years ago. They look archaic and completely out of step.

What they should own is breakfast. We’ve seen a few attempts at it, as referenced in our study. But with each passing day, fast food restaurants and other outlets are owning that daypart and no cereal company is going to out-product its way out of the dilemma.

If one of those cereal companies wants to know how to turn around its fortunes, call me.

Denny’s to open up The Den

We all love breakfast. There’s no getting around it that eggs, coffee and whatever else you want to include in that category is like nectar of the gods to many of us.

That’s why I lament that there’s not a Denny’s restaurant in town. That’s hard to believe in a city with a population of more than 270,000 people. I mean, Denny’s has more than 1,500 locations in the US. You’d think it could find a place in Greensboro, NC. (It did have one, out in the outskirts, but it closed.)

But maybe there’s one hidden here because the restaurant chain is taking advantage of the newest trend in the industry: Fast casual.

Denny’s is coming from the other direction from the fast food restaurants that are moving up from fast to casual. Denny’s is coming down to fast from casual with its new concept called The Den.

Please come to Greensboro.
Please come to Greensboro.

These fast-casual spots have been developed for college campuses and contract service providers (such as those in a large company’s cafeteria) but Denny’s plans on opening off-campus locations in the future. (It opened its first in San Diego recently.)

Denny’s is actually doing well, with same-store sales increasing nearly 5% for the fourth quarter, but opportunities in this category are few. In the fast food industry, chains have been aggressively attacking the breakfast daypart because lunch, dinner and late night are maxed out. (That’s why you see Taco Bell entering breakfast, for example.)

Denny’s has the permission to enter this fray because its bailiwick is breakfast. The Den will serve breakfast all day, something I’m sure is a hit on college campuses.

I’ve spoken a lot about brand permissions, what categories brands have permission to play in based on their equities. Denny’s has permission to play in this space because, even though it might claim otherwise, it is not so high class that consumers won’t see the transition as an emotional problem.

The issue is that the breakfast category is crowded. Everybody had entered that daypart or is planning on it. That means someone is going to lose and wonder where its next opportunity lies.

That’s the reason why fast food chains have gone fast casual, trying to make a better in-store experience rather than consumers just zipping through the drive-thru. (Studies have shown that you spend more if you go inside.)

My guess is that the Den, if properly marketed, will be a success but force out others entering the market. Now, if it can just enter the Greensboro market, I’ll be happy.