Dive Brief:

• Taco Bell will open its first three Cantinas in Manhattan by the end of the year, according to a company statement. The chain also partnered with Blue Point Brewing Company to launch a $6 Big City Bell Pilsner, which will be available at the locations in the next few months.
• The Cantina at 500 8th Ave. will offer five ways to order: Taco Bell’s mobile app, its website, in-restaurant kiosks, at the register and via Seamless, which is owned and operated by Grubhub.
• Since launching urban concepts in 2015, Taco Bell has opened 19 Cantinas and 16 urban concepts in the U.S., including six (three Cantinas and three urban concepts) in the boroughs of New York.

Dive Insight:

Taco Bell has been on a roll lately. Not only has it been Yum Brands most successful chain, boasting a same-store sales bump of 5% during the third quarter of 2018, it is also unveiling a new value menu next week and embarking on a rapid market expansion.

Its urban sites are a departure from its long-time focus on suburban areas where it typically offers drive-thrus. Taco Bell has plans to add 1,000 Taco Bell restaurants, including 300 urban-inline and Cantina stores, by 2022. New York City is expected to gain 125 Taco Bell restaurants, according to an August press release.

These small format locations will also be more attractive to potential franchisees. The cost to open these locations costs about $244,900 to $623,600 compared to $1.1 million to $2.6 million for a traditional location, according to Skift Table. Along with the addition of alcohol sales, these urban sites can provide a higher turnaround than a traditional fast food model.

The Cantina model has proven to be popular in large cities. Taco Bell’s first Vegas Cantina, which has become Taco Bell’s busiest restaurant, will expand by 1,200 square feet  to provide a private event space. This flagship location offers 24-hour service, DJ entertainment, VIP lounges, weddings, a retail experience and a Freeze Wall, which offers eight different flavors of these cold beverages. With franchise partners Diversified Restaurant Group, Taco Bell will open another Cantina Location in 2019 in Downtown Las Vegas, which will have an open-air design, second floor entry and lit-up escalator leading from the first-floor sidewalk, according to a press release.

The Cantinas also cater to the local demographics. While the Las Vegas location is more about entertainment, New York, sites will be about offering convenience and ease of ordering, especially at its 500 8th Ave. site. In addition to its multiple ordering options, the Cantina at 500 8th Ave. will offer new menu features including a Chicken Enchilada Nachos Box, Fiesta Taco Salad Nachos Box and Steak & Cheddar Nachos Box for $5.59 each,, as well as a seven-layer dip and new freeze flavors such as Frozen Mule and Party Punch, according to the press release. 

This site also will be decked out with a custom mural wall by New York artist Greg Lamarch and offer custom T-shirts designed by the artist. Guests also will be able to use their phone to choose the music in the restaurant, all features that will be particularly attractive to urbanite millennials, a growing demographic in the fast food world that is heavily focused on convenience.