Taco Bell has almost 8,000 locations worldwide, but only ~400 of those are outside the U.S.
They've famously struggled to expand internationally, especially in Asia and the Middle East.
Here's why:
They've famously struggled to expand internationally, especially in Asia and the Middle East.
Here's why:
Taco Bell is an overwhelming success in the U.S.
First started by Glen Bell in Downey, CA in 1962, Taco Bell has ~7,500 locations across the country.
But it has a big problem — they can't get any footing internationally.
First started by Glen Bell in Downey, CA in 1962, Taco Bell has ~7,500 locations across the country.
But it has a big problem — they can't get any footing internationally.
Most of their expansions internationally have been only mildly successful.
In fact, Taco Bell has even tried and failed multiple times to open restaurants in Mexico. Once in 1992 and again in 2007.
But in Dubai, Taco Bell pulled out of the U.A.E. after only 4 years.
In fact, Taco Bell has even tried and failed multiple times to open restaurants in Mexico. Once in 1992 and again in 2007.
But in Dubai, Taco Bell pulled out of the U.A.E. after only 4 years.
In 2008, Taco Bell was posting record profits. That year, it became the second most profitable chain in the Yum! Brands portfolio.
Executives decided it was time, once again, to try to enter a new international market.
So, they looked to the Middle East.
Executives decided it was time, once again, to try to enter a new international market.
So, they looked to the Middle East.
The United Arab Emirates was the perfect foothold into the Middle Eastern market.
- The UAE economy was growing at a steady pace
- Dubai had the highest concentration of restaurants in the world
- Emiratis generally loved American brands
- The UAE economy was growing at a steady pace
- Dubai had the highest concentration of restaurants in the world
- Emiratis generally loved American brands
At the time, one of the largest malls in the world was scheduled to open in Dubai in November of 2008.
Malls in Dubai are no joke. The Dubai Mall is 5.9m sq/ft with 1,300 stores and 200+ restaurants.
In fact, the Dubai Mall made up about 5% of Dubai''s GDP in 2015 🤯
Malls in Dubai are no joke. The Dubai Mall is 5.9m sq/ft with 1,300 stores and 200+ restaurants.
In fact, the Dubai Mall made up about 5% of Dubai''s GDP in 2015 🤯
So, Yum! Brands selected The Americana Group to become their first Emirati franchisee and opened a Taco Bell in the Dubai Mall in 2008.
The menu was adjusted to cater to the local palate and the entire restaurant was made halal-certified to adhere to islamic dietary laws.
The menu was adjusted to cater to the local palate and the entire restaurant was made halal-certified to adhere to islamic dietary laws.
The initial launch of the Dubai Mall location showed promise.
So in 2009, The Americana Group decided to add another location. Then in 2012, they expanded to 2 other mega malls.
But something wasn't right - and by the end of 2012, they pulled out of the market entirely.
So in 2009, The Americana Group decided to add another location. Then in 2012, they expanded to 2 other mega malls.
But something wasn't right - and by the end of 2012, they pulled out of the market entirely.
What happened?
For years, Yum! Brands had been the top food company in the U.A.E.
In Dubai alone, there were 31 KFCs and 21 Pizza Huts.
So the problem wasn't poor execution or inexperience.
In the end, Taco Bell's failure in Dubai came down to 2 things: Food and atmosphere.
For years, Yum! Brands had been the top food company in the U.A.E.
In Dubai alone, there were 31 KFCs and 21 Pizza Huts.
So the problem wasn't poor execution or inexperience.
In the end, Taco Bell's failure in Dubai came down to 2 things: Food and atmosphere.
Put simply, Emiratis didn't like Mexican food.
In fact, the Latin American food category consistently accounts for only ~.1% of total food sales in the U.A.E.
Yum! Brand executives thought it was a gap in the market, but in reality it was a lack of demand.
In fact, the Latin American food category consistently accounts for only ~.1% of total food sales in the U.A.E.
Yum! Brand executives thought it was a gap in the market, but in reality it was a lack of demand.
Taco Bell's layout also clashed with Emirati culture.
In the U.A.E. (and in much of the Middle East), going out for food is a big event. It's an opportunity to sit down and socialize with family and friends.
Taco Bell (and its tiny dining area) was not built for that.
In the U.A.E. (and in much of the Middle East), going out for food is a big event. It's an opportunity to sit down and socialize with family and friends.
Taco Bell (and its tiny dining area) was not built for that.
It's easy to forget that Taco Bell lacks the international brand recognition of other brands like KFC and Pizza Hut.
Today, KFC has 3,000+ locations outside the U.S., and Pizza Hut has ~11,000.
At only 400, Taco Bell lacked the brand recognition it needed in such a new market.
Today, KFC has 3,000+ locations outside the U.S., and Pizza Hut has ~11,000.
At only 400, Taco Bell lacked the brand recognition it needed in such a new market.
So how did the Dubai Mall location succeed if the other ones didn't?
The amount of foot traffic in the mall was certainly a contributing factor.
But the biggest reason, was the large number of international tourists that were already familiar with the Taco Bell brand.
The amount of foot traffic in the mall was certainly a contributing factor.
But the biggest reason, was the large number of international tourists that were already familiar with the Taco Bell brand.
Despite the setback in Dubai, Yum! Brands is still determined to enter the Middle Eastern market.
Taco Bell is currently planning a massive expansion overseas with the goal of 600+ new locations.
Time will tell if they can succeed this time.
Taco Bell is currently planning a massive expansion overseas with the goal of 600+ new locations.
Time will tell if they can succeed this time.
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TLDR:
🌮 Over 90% of Taco Bell's that exist are in the US
🌮 KFC and Pizza Hut have a far bigger international presence
🌮 Despite early success in Dubai, Mexican cuisine didn't catch on
🌮 Taco Bell is trying once again to expand internationally
🌮 Over 90% of Taco Bell's that exist are in the US
🌮 KFC and Pizza Hut have a far bigger international presence
🌮 Despite early success in Dubai, Mexican cuisine didn't catch on
🌮 Taco Bell is trying once again to expand internationally
P.S.
This has nothing to do with the thread, but it's one of the greatest interactions ever on Twitter:
This has nothing to do with the thread, but it's one of the greatest interactions ever on Twitter:
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