Taco Bell's Incredible Two-Year Quest to Melt Cheese (BW)

A customer pulls apart a Taco Bell Corp. Quesalupa.

• Quesalupa -- grandchild of Gordita, child of Chalupa -- reigns
• Mexican-food chain hopes to ride gooey trail to more sales

A cheese lover on Twitter expressed less than complete satisfaction with the Quesalupa, Taco Bell’s newest and cheesiest menu item. The company’s social-media team was on it.

“Dear @tacobell, Why can’t the quesalupa be as cheesy as your commercials? Sincerely, A customer who would marry cheese,” the tweet read.

The tweet popped up on one of the dozen wall-hung screens that employees monitor in the “Fishbowl” at Taco Bell headquarters in Irvine, California.

Matt Prince swooped in. As head of the 15-person “newsroom” team, it’s his job to defend and protect what Taco Bell calls The Cheese Pull -- the taffy-like web of pepper jack created by pulling apart a Quesalupa. A snag like the one described in the tweet might trigger an e-mail to one of the 6,500 Taco Bell restaurants, reminding staff not to overcook the tortilla or allow the shells to lie around too long after they’ve been fried in canola oil. Taco Bell spent two years perfecting the technique after a decade of noodling with “the cheese-pully thing,” said Liz Matthews, chief food innovation and beverage officer, and it’s betting its future on plenty of cheesy elasticity for maximum customer goo.

Be Amazing

“It’s got to have an amazing, delicious cheese pull in every bite,” Matthews said in an interview in the company’s international test kitchen this month.

It’s hard to overstate the importance of The Cheese Pull to Taco Bell and its parent company, Yum! Brands Inc., which has a $33 billion market value and more than $13 billion in revenue last year. With Yum planning to spin off its China unit and growth otherwise slowing at Taco Bell’s siblings, KFC and Pizza Hut, it’s come down to this: The near-term performance of Yum depends on Taco Bell, and the performance of Taco Bell rests on The Cheese Pull.

“The strongest brand in the portfolio is clearly Taco Bell,” Yum Chief Executive Officer Greg Creed said last month. Yum plans to open the first Taco Bell this year in China, where KFC growth slowed after a supplier scandal in 2014. There’s talk of taking Taco Bell to Australia, too.

Yum’s stock price has rallied 11 percent this year, outpacing the 1.4 percent gain in the Standard & Poor’s 500 Index.

Sales at established Taco Bell locations jumped 5 percent last year, compared with growth of 1 percent at Pizza Hut and 3 percent for KFC. Chipotle Mexican Grill Inc.’s recent sales troubles, caused by E. coli and norovirus outbreaks, give the brand an opportunity to attract more fast-foodies.

Taco Bell, founded by Glen Bell in 1962, made its name introducing Americans to quasi-Mexican fare, such as the Bell Beefer and Enchirito. The Gordita came along in 1998, begetting the Chalupa shortly after that. The Quesalupa -- a quesadilla-Chalupa mashup -- is the latest generation born in the test kitchen.

Quesalupa Debut

The Quesalupa rolled out with accompanying fanfare on Feb. 8 after a 36-store test in Toledo, Ohio. The company said it persuaded Americans to order 71,000 of the $2.99 tacos with cheese-filled shells without even disclosing what they were -- they called it a “blind preorder.” The advertising campaign was Taco Bell’s most expensive ever, and it included a 30-second TV spot that ran during the Feb. 7 Super Bowl, claiming the Quesalupa would be bigger than man-buns, drones, aliens and James Harden’s beard, among other things.

The commercial, airing during the priciest TV time of the year, cost an estimated $5 million just to broadcast, according to Andrew Alvarez, an analyst at research firm IBISWorld. The star of the ad was The Cheese Pull.

Getting The Pull exactly right isn’t easy. If the shell isn’t fried the proper 90 seconds or if it sits for more than 15 minutes after cooking, the cheese hardens and won’t be melty enough for a proper stringy bridge between separated pieces. The item was at least partly inspired by stuffed-crust pizzas. Matthews said Taco Bell aims to take advantage of Americans’ expanding love affair with cheese.

“People stopped seeing cheese as an ingredient -- cheese really became the center of the plate and a big deal,” Matthews said.

Americans ate about 34.2 pounds per person in 2014, 9.4 percent more than a decade earlier, according to U.S. Department of Agriculture data.

Quesalupa calorie counts: chicken and steak, 440; beef, 460; breakfast sausage, 590.

Ironically, Taco Bell said it’s close to fulfilling its goal for a healthier menu by removing preservatives and fake flavors from 95 percent of its menu. It’s also quietly pushing its lower-calorie Fresco menu, which substitutes pico de gallo for guacamole, sour cream, cheese and any mayonnaise-based sauces.

In a 2015 survey by Nation’s Restaurant News and WD Partners, Taco Bell ranked last for food quality among limited-service Mexican restaurants, coming in after Del Taco Restaurants Inc. and Taco John’s International Inc. as well as fast-casual rivals Chipotle and Qdoba. It also had the lowest cleanliness and service scores.

Where it didn’t come in dead last: value and craveability -- industry-speak for fatty, salty, sugary food.

“I don’t think Taco Bell is going to Chipotle-style food,” said Peter Saleh, an analyst at BTIG in New York. “The core of what Taco Bell does has to continue to be value, new product news and interesting new items.”

In the Fishbowl

Back in the Fishbowl, Prince keeps his eyes on the Twitter screen.

The room looks like a 20-something’s dream, with cushy couches and chairs, pop art on the wall and even a cooler stocked with Heineken. Perfect for a key Taco Bell customer -- the 25-year-old dude-bro, hankering for a late-night Cheese Pull.

“When you’re 16, you want to be 25, and when you’re 60, you want to be 25,” Prince said. “No matter how old you are, you want to be 25.”

More Quesalupa tweets came across the screen. Prince was watching.