Taco Bell will shock the fast-food industry on Tuesday by announcing plans to drop kids meals and toys at all of its U.S. restaurants.
"The future of Taco Bell is not about kids meals," says Taco Bell CEO Greg Creed. "This is about positioning the brand for Millennials."
Somewhere around January 2014, the chain's last kids meal will be sold, he estimates.
Taco Bell emerges as the first national fast-food chain to eliminate kids meals altogether. The meals are a huge lure for kids -- which is why the industry sells more than 1.2 billion of them annually in the U.S., according to Federal Trade Commission data. In 2011, the regional chain Jack-in-the-Box eliminated toys from its kids meals.
The move by Taco Bell comes at a time fast-food giants are under increasing pressure by parents, health advocates and lawmakers to improve the nutrition of meals they serve to children and to stop tantalizing kids with gee-whiz toys linked to Hollywood blockbusters. Last year, a judge dismissed a lawsuit filed by the Center for Science in the Public Interest against McDonald's for "deceptive marketing" with the toys in its Happy Meals.
"It's a constructive step forward that Taco Bell will no longer use toys to encourage kids to pester their parents to go to their restaurants," says Margo Wootan, director of nutrition policy at the CSPI. "By constantly churning out new toys, fast-food chains have a new angle every six to eight weeks for marketing to kids."
Fast-food chains spend about $580 million annually marketing to children under age 12, of which $340 million is spent on the licensing and production of toys, estimates the FTC.
But Taco Bell's move has little to do with any of that, says Creed. Kids meals account for half of 1% of Taco Bell's overall sales. "It's fairly inconsistent for an edgy, twenty-something brand to offer kids meals," he says.
For more than a dozen years, he notes, Taco Bell has not promoted its kids meals on TV or in social media.
After the kids meals are gone, it will cost slightly more for children to eat at Taco Bell.
Currently, a Kids Meal with a Crunchy Taco, Cinnamon Twists and a small beverage costs about $2.84 in most markets. That will increase to $3.17 when purchased a la carte. Most combo meals will cost more than that. Many combo meals also serve larger portions, which concerns the CSPI's Wootan. "The adult menu at Taco Bell is chock-full of unhealthy choices," she says. "Kids are likely to get even more calories."
But Creed says many parents will like that they no longer will be nagged by their kids to eat at Taco Bell just because of a toy. "It's not that we don't like kids," he says. "We're empowering parents."