History
The Food That Built America Recap for Burgers, Burritos and the Battle for Fast Food
This week’s episode of The Food That Built America is titled Burgers, Burritos and the Battle for Fast Food, getting into the nitty gritty of the business of the most popular fast-food chains in the business.
Burgers and fries are the top dogs in fast food, with the occasional chicken sandwich thrown in for good measure. Add the soda to wash it all down and Americans were happy and had full bellies.
In 1983, Taco Bell was a small business that was bought by PepsiCo. After years of struggling, John Martin was brought in as president of the company. He wants to expand the business and wants to lean in on the fast-food side of it, making tacos the next big thing in the business. Risking it all, he rebrands the entire business, adding a new logo, a drive thru and a new menu. His goal is to make it as popular as McDonald’s and Burger King.
Back in Chicago, McDonald’s is also trying to step it up since they hit a plateau in sales. They add the McNuggets, thanks to Fred Turner wanting to expand the menu. They also add the McPizza, salads and the Chicken LT sandwich.
Taco Bell went national but struggled with expanding the menu. John is still looking for ideas, and it isn’t until he is in a diner and gets a free refill of coffee that this is the way to make Taco Bell stand out.
Enter the Value Menu and free refills on sodas. He explains the K-minus system, which is another way to make fast food and throws a Hail Mary into making this work. The biggest hook is to appeal to college students who are on a strict budget.
This is a hit, and before long, places like Wendy’s and Arby’s are following suit.
McDonald’s for their part, want in on the action, so they decide to make the Supersized menu, bigger drinks and fries to go with the sandwich. This brings sales into the billions.
Taco Bell’s sales are soaring, but there is new competition in the wings, thanks to Steve Ells. He is a culinary school graduate who wants to work in fine dining, but begins as a line cook. A friend introduces him to a mission burrito, which he ends up loving…..so much so that he leaves his job in 1993 to open his own burrito place in Denver.
The burritos have a gourmet touch, but he also wants to make them quickly to appeal to the masses and get in on the fast-food action. He decides to make the burritos in front of people, adding the meat and rice to the tortilla and then having customers pick and choose what they want to add. Together with his new sauces and marinades, Chipotle is born.
Taco Bell has plateaued and struggling. John is out, Peter Waller is in….and so is the Taco Bell dog to bring in more customers.
Chipotle is touch and go at the beginning, but before long, it is a customer favorite, thanks to being close to the University of Denver. Seven more locations are opened and bringing in millions.
Steve loves his success and changes his mind about fine dining, sticking with his new business model instead.
The Taco Bell dog is a HIT and a new celebrity.
Fred is not happy with this turn of events and wants to outdo the competition.
Steve decides to expand Chipotle and looks for an investor to help. Just as he is about to give up hope, the head honchos from McDonald’s come in, and in 1998 buy a 20% stake in the company. The company goes national and is making 30 million dollars per year.
Taco Bell, for their part, is losing sales. Emil Brolick comes on board and explains that they need a signature item. Enter the Crunchwrap Supreme, thanks to Lois Carson. However, Emil is initially not a fan since it cannot be eaten on the go.
Chipotle and McDonald’s try and work on their collaboration, but Steve isn’t happy with the results.
Lois is still determined to make her idea work. She then adds a larger tortilla, folds it into a hexagon, puts it on the fryer and BOOM the Crunchwrap Supreme is on the menu and a runaway hit. It makes Taco Bell the number two fast food place in the country.
Fred and Steve meet up and decide to part ways to the tune of 1.5 billion dollars. This is a relief for Steve, who was not happy with the partnership anymore.
Chipotle will go on to keep growing even though Steve leaves the company in 2020.
Each company is worth billions.
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