Del Taco
- Del Taco has seen an increase in customer spending and traffic following the launch of its vegan Beyond Meat taco 11 days ago.
- The Beyond Taco swaps ground beef with a vegan protein that imitates the taste and texture of a classic taco from Del Taco.
- "We’ve had stories … of folks talking about having never been to Del Taco before and this giving them a reason to check out the brand," Del Taco CEO John Cappasola told investors on Monday.
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Del Taco has only had the Beyond Meat taco on its menu nationally for 11 days. But, the chain says the vegan menu item is already driving sales.
"Since launching 11 days ago, we are very encouraged by increases in both check and traffic, as this new product platform is bringing in many new or lapsed users and appealing to regular Del Taco guests, who are all eager to sample our Beyond Taco offerings," CEO John Cappasola told investors on Monday.
"This has translated to a strong 6% product mix so far, supporting the unique appeal of this product," Cappasola continued. "We believe the Beyond platform will drive sales while further strengthening our QSR+ [quick-service restaurant-plus] brand position, and we see incredible future opportunity to expand this protein across our menu."
Del Taco launched the Beyond Taco in late April, shortly before meat-substitute company Beyond Meat’s explosive IPO last week. The Beyond Taco utilizes a vegan, plant-based protein to imitate the flavor and consistency of Del Taco’s ground beef.
"The team did a great job developing a proprietary and unique flavor profile that tastes incredibly similar to our current ground beef, allowing us to broaden its appeal to not only attract vegans and vegetarians but also those looking for ‘better-for-you’ options or to reduce red meat without sacrificing flavor," Cappasola said.
The Beyond ground protein can be swapped in to any of Del Taco’s menu items, including burritos, nachos, and salads. A Beyond Taco costs $2.49, $1 more than the classic Del Taco. According to Cappasola, the new menu item has been attracting new customers in addition to being ordered by regulars.
"We’ve had stories — even on social media — of folks talking about having never been to Del Taco before and this giving them a reason to check out the brand," Cappasola said.
BTIG analyst Peter Saleh said in a note on Tuesday that he is encouraged by the same-store sales and traffic improvement following the debut of Beyond Meat at Del Taco, though it is difficult to determine at this point whether the improvement will be sustainable.
"So far, the Beyond Meat Tacos are performing above the levels of the Del Taco, one of the most successful product launches in the company’s history," Saleh said.
Beyond Meat’s shares have skyrocketed since its public debut last Thursday. Shares are up by more than 200% since the company’s IPO, as of Tuesday morning, and its market cap now exceeds $4.1 billion.
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Source: Business Insider – ktaylor@businessinsider.com (Kate Taylor)