Taco Bell was sitting solidly in the sweet spot for fast food in troubled times.
The Irvine-based chain had developed a menu that was affordable enough for consumers worried about inflation and also fun enough for those looking for more than just hamburgers and pizza. Its sales and stock price were soaring. Then came cyclosporiasis.
A massive parasitic outbreak has taken Taco Bell down a peg, and now it has to rebuild its momentum.
“The brand has seen a meaningful near-term sales impact,” said Chris Turner, chief executive of Taco Bell’s owner Yum Brands, on an earnings call Thursday. “Our teams are acting quickly and transparently while keeping the safety and well-being of our consumers as the top priority.”
Unfortunately for Taco Bell, it has become one of the biggest names associated with the outbreak.
Last month, the Centers for Disease Control and Prevention announced that shredded lettuce served at Taco Bell in five states was the source of more than 1,600 cyclosporiasis infections. In comparison, an E. coli outbreak linked to McDonald’s in 2024 infected around 100 people. In 2010, a salmonella outbreak tied to Taco Bell sickened 155 people.
Still, on Thursday, the company reported same-store sales increased 7% in the second quarter, marking the ninth consecutive quarter of same-store sales growth that outpaced industry averages. Yum Brands, which also owns KFC and Habit Burger and Grill, saw operating profits increase 5% to $655 million year over year.
Caused by the parasite cyclospora, cyclosporiasis can cause diarrhea, fatigue, cramping and weight loss. More than 90 people have been hospitalized as a result of the outbreak in Indiana, Kentucky, Michigan, Ohio and West Virginia.
How Taco Bell and others in the food industry touched by the outbreak recover will depend on how long it lasts, said Aneurin Canham-Clyne, a reporter for the trade publication Restaurant Dive.
“It’s a very large outbreak,” he said. “But if you look at chains that have really suffered in the long term from reputation harm from outbreaks, it usually takes repeated outbreaks, and it usually takes outbreaks that kill people.”
On July 17, the same day the CDC announced the link to Taco Bell, the chain issued a release saying it had completed removal of affected Taylor Farms lettuce from its restaurants. Taylor Farms also issued a recall that day of all iceberg lettuce sourced from Central Mexico from a certain time period.
According to Placer.ai, Taco Bell’s foot traffic dropped 31% on July 17 and was down 30% the next day.
Yum’s shares lost as much as 12% from their July peak.
“Consumers would reasonably be wary about eating at Taco Bell for some time, even after the brand gives its all clear,” Canham-Clyne said. “There’s reason to be immediately suspicious of the idea that a problem like that could be rectified in one day.”
Taco Bell was founded by Glenn Bell in 1962 in Downey and opened its 100th restaurant in Anaheim by 1967. The company went public in 1970 and moved into its current headquarters in Irvine in 2010.
Before founding Taco Bell, Bell drew inspiration from his friends and neighbors at Mitla Cafe in San Bernardino to create his own version of a crunchy taco.
Before the outbreak, Taco Bell had found its stride — and analysts say its operational advantages could carry it through the rough patch.
Experts say Taco Bell’s secret sauce isn’t just one flavor — the brand has achieved cultural relevance, menu innovation and compelling value that keep customers coming back.
“Taco Bell has long been known as a very strong brand and has managed to stay very relevant to younger consumers and to the culture, despite being 60 years old,” said Sara Senatore, a Bank of America senior analyst covering restaurants.
Senatore also credited past Taco Bell chief executive Brian Nichols for ramping up the restaurant’s digital presence and bringing more customers to its app for ordering ahead and rewards programs. Nichols served as chief executive for Taco Bell for three years before leaving in 2018 to fill the same role at Chipotle. In 2024, he was hired as chief executive for Starbucks.
Fast food brands including Jack in the Box, Wendy’s and Carl’s Jr. have struggled under the pressure of several forces this year, including a low-income consumer group that’s squeezed by inflation, rising food and labor costs and increasing competition with fast casual and casual dining alternatives.
“Anywhere you look, the below-average-income consumer has been pressured, and that’s a function of broader inflation,” said Brian Harbour, an equity analyst at Morgan Stanley. “More recently, it’s a function of gas prices.”
But Taco Bell, led since 2023 by Chief Executive Sean Tresvant, has mastered its branding and digital appeal skillfully enough to overcome these obstacles. Tresvant previously worked for Nike as chief marketing officer of the Jordan brand, which is wildly popular among younger consumers — the same group that often frequents Taco Bell.
Yum Brands Chief Financial Officer Ranjith Roy said the brand has a long-term growth opportunity in the U.S. of more than 10,000 stores.
Some of Taco Bell’s advantages come from its choice of cuisine. Mexican-inspired fast food can pack in more flavor than burgers and chicken sandwiches and offer more room for innovation. There’s also less competition and more opportunity for filling meals without expensive ingredients.
“From a value perspective, Taco Bell just has always been known for very, very sharp value,” Senatore said. “Taco Bell can afford to offer price points of 99 cents or $1.99 because for something like a bean burrito, the cost is going to be much lower than a hamburger, and it can still be very satiating.”
Taco Bell’s Luxe Value Menu offers 10 items for $3 or less, including a spicy potato soft taco for $1.69 and a cheesy bean and rice burrito for $1.89. It also has a customizable Luxe Cravings Box that comes with three items and a drink for $7.99.
In comparison, the Jack in the Box medium Classic Smashed Jack Combo comes with a quarter-pound cheeseburger, fries and a drink for $12.29. Chipotle’s chicken burrito with rice, beans, cheese and salsa, plus a side of chips, totals $12.50.
Taco Bell wins customers over with creative menu options, experts said. They sell tacos with Dorito shells, nacho-seasoned fries and a Mexican pizza.
While some fast food joints have over-innovated to the point where customers see it as tiring or gimmicky, Taco Bell appears to have found the right balance.
“In almost any other restaurant, Taco Bell’s pace of innovation would seem too fast-paced, but I think that the Taco Bell customer base welcomes that and responds to it,” said Harbour from Morgan Stanley.
Canham-Clyne predicted the brand will bounce back within six months.
“I think a lot of people are going to be making jokes about getting parasitic diarrhea from Taco Bell for the next 20 years,” he said. “But I don’t think it’s necessarily going to impact the chain’s sales long term.”
Taco Bell was sitting solidly in the sweet spot for fast food in troubled times.
The Irvine-based chain had developed a menu that was affordable enough for consumers worried about inflation and also fun enough for those looking for more than just hamburgers and pizza. Its sales and stock price were soaring. Then came cyclosporiasis.
A massive parasitic outbreak has taken Taco Bell down a peg, and now it has to rebuild its momentum.
“The brand has seen a meaningful near-term sales impact,” said Chris Turner, chief executive of Taco Bell’s owner Yum Brands, on an earnings call Thursday. “Our teams are acting quickly and transparently while keeping the safety and well-being of our consumers as the top priority.”
Unfortunately for Taco Bell, it has become one of the biggest names associated with the outbreak.
Last month, the Centers for Disease Control and Prevention announced that shredded lettuce served at Taco Bell in five states was the source of more than 1,600 cyclosporiasis infections. In comparison, an E. coli outbreak linked to McDonald’s in 2024 infected around 100 people. In 2010, a salmonella outbreak tied to Taco Bell sickened 155 people.
Still, on Thursday, the company reported same-store sales increased 7% in the second quarter, marking the ninth consecutive quarter of same-store sales growth that outpaced industry averages. Yum Brands, which also owns KFC and Habit Burger and Grill, saw operating profits increase 5% to $655 million year over year.
Caused by the parasite cyclospora, cyclosporiasis can cause diarrhea, fatigue, cramping and weight loss. More than 90 people have been hospitalized as a result of the outbreak in Indiana, Kentucky, Michigan, Ohio and West Virginia.
How Taco Bell and others in the food industry touched by the outbreak recover will depend on how long it lasts, said Aneurin Canham-Clyne, a reporter for the trade publication Restaurant Dive.
“It’s a very large outbreak,” he said. “But if you look at chains that have really suffered in the long term from reputation harm from outbreaks, it usually takes repeated outbreaks, and it usually takes outbreaks that kill people.”
On July 17, the same day the CDC announced the link to Taco Bell, the chain issued a release saying it had completed removal of affected Taylor Farms lettuce from its restaurants. Taylor Farms also issued a recall that day of all iceberg lettuce sourced from Central Mexico from a certain time period.
According to Placer.ai, Taco Bell’s foot traffic dropped 31% on July 17 and was down 30% the next day.
Yum’s shares lost as much as 12% from their July peak.
“Consumers would reasonably be wary about eating at Taco Bell for some time, even after the brand gives its all clear,” Canham-Clyne said. “There’s reason to be immediately suspicious of the idea that a problem like that could be rectified in one day.”
Taco Bell was founded by Glenn Bell in 1962 in Downey and opened its 100th restaurant in Anaheim by 1967. The company went public in 1970 and moved into its current headquarters in Irvine in 2010.
Before founding Taco Bell, Bell drew inspiration from his friends and neighbors at Mitla Cafe in San Bernardino to create his own version of a crunchy taco.
Before the outbreak, Taco Bell had found its stride — and analysts say its operational advantages could carry it through the rough patch.
Experts say Taco Bell’s secret sauce isn’t just one flavor — the brand has achieved cultural relevance, menu innovation and compelling value that keep customers coming back.
“Taco Bell has long been known as a very strong brand and has managed to stay very relevant to younger consumers and to the culture, despite being 60 years old,” said Sara Senatore, a Bank of America senior analyst covering restaurants.
Senatore also credited past Taco Bell chief executive Brian Nichols for ramping up the restaurant’s digital presence and bringing more customers to its app for ordering ahead and rewards programs. Nichols served as chief executive for Taco Bell for three years before leaving in 2018 to fill the same role at Chipotle. In 2024, he was hired as chief executive for Starbucks.
Fast food brands including Jack in the Box, Wendy’s and Carl’s Jr. have struggled under the pressure of several forces this year, including a low-income consumer group that’s squeezed by inflation, rising food and labor costs and increasing competition with fast casual and casual dining alternatives.
“Anywhere you look, the below-average-income consumer has been pressured, and that’s a function of broader inflation,” said Brian Harbour, an equity analyst at Morgan Stanley. “More recently, it’s a function of gas prices.”
But Taco Bell, led since 2023 by Chief Executive Sean Tresvant, has mastered its branding and digital appeal skillfully enough to overcome these obstacles. Tresvant previously worked for Nike as chief marketing officer of the Jordan brand, which is wildly popular among younger consumers — the same group that often frequents Taco Bell.
Yum Brands Chief Financial Officer Ranjith Roy said the brand has a long-term growth opportunity in the U.S. of more than 10,000 stores.
Some of Taco Bell’s advantages come from its choice of cuisine. Mexican-inspired fast food can pack in more flavor than burgers and chicken sandwiches and offer more room for innovation. There’s also less competition and more opportunity for filling meals without expensive ingredients.
“From a value perspective, Taco Bell just has always been known for very, very sharp value,” Senatore said. “Taco Bell can afford to offer price points of 99 cents or $1.99 because for something like a bean burrito, the cost is going to be much lower than a hamburger, and it can still be very satiating.”
Taco Bell’s Luxe Value Menu offers 10 items for $3 or less, including a spicy potato soft taco for $1.69 and a cheesy bean and rice burrito for $1.89. It also has a customizable Luxe Cravings Box that comes with three items and a drink for $7.99.
In comparison, the Jack in the Box medium Classic Smashed Jack Combo comes with a quarter-pound cheeseburger, fries and a drink for $12.29. Chipotle’s chicken burrito with rice, beans, cheese and salsa, plus a side of chips, totals $12.50.
Taco Bell wins customers over with creative menu options, experts said. They sell tacos with Dorito shells, nacho-seasoned fries and a Mexican pizza.
While some fast food joints have over-innovated to the point where customers see it as tiring or gimmicky, Taco Bell appears to have found the right balance.
“In almost any other restaurant, Taco Bell’s pace of innovation would seem too fast-paced, but I think that the Taco Bell customer base welcomes that and responds to it,” said Harbour from Morgan Stanley.
Canham-Clyne predicted the brand will bounce back within six months.
“I think a lot of people are going to be making jokes about getting parasitic diarrhea from Taco Bell for the next 20 years,” he said. “But I don’t think it’s necessarily going to impact the chain’s sales long term.”
Taco Bell was sitting solidly in the sweet spot for fast food in troubled times.
The Irvine-based chain had developed a menu that was affordable enough for consumers worried about inflation and also fun enough for those looking for more than just hamburgers and pizza. Its sales and stock price were soaring. Then came cyclosporiasis.
A massive parasitic outbreak has taken Taco Bell down a peg, and now it has to rebuild its momentum.
“The brand has seen a meaningful near-term sales impact,” said Chris Turner, chief executive of Taco Bell’s owner Yum Brands, on an earnings call Thursday. “Our teams are acting quickly and transparently while keeping the safety and well-being of our consumers as the top priority.”
Unfortunately for Taco Bell, it has become one of the biggest names associated with the outbreak.
Last month, the Centers for Disease Control and Prevention announced that shredded lettuce served at Taco Bell in five states was the source of more than 1,600 cyclosporiasis infections. In comparison, an E. coli outbreak linked to McDonald’s in 2024 infected around 100 people. In 2010, a salmonella outbreak tied to Taco Bell sickened 155 people.
Still, on Thursday, the company reported same-store sales increased 7% in the second quarter, marking the ninth consecutive quarter of same-store sales growth that outpaced industry averages. Yum Brands, which also owns KFC and Habit Burger and Grill, saw operating profits increase 5% to $655 million year over year.
Caused by the parasite cyclospora, cyclosporiasis can cause diarrhea, fatigue, cramping and weight loss. More than 90 people have been hospitalized as a result of the outbreak in Indiana, Kentucky, Michigan, Ohio and West Virginia.
How Taco Bell and others in the food industry touched by the outbreak recover will depend on how long it lasts, said Aneurin Canham-Clyne, a reporter for the trade publication Restaurant Dive.
“It’s a very large outbreak,” he said. “But if you look at chains that have really suffered in the long term from reputation harm from outbreaks, it usually takes repeated outbreaks, and it usually takes outbreaks that kill people.”
On July 17, the same day the CDC announced the link to Taco Bell, the chain issued a release saying it had completed removal of affected Taylor Farms lettuce from its restaurants. Taylor Farms also issued a recall that day of all iceberg lettuce sourced from Central Mexico from a certain time period.
According to Placer.ai, Taco Bell’s foot traffic dropped 31% on July 17 and was down 30% the next day.
Yum’s shares lost as much as 12% from their July peak.
“Consumers would reasonably be wary about eating at Taco Bell for some time, even after the brand gives its all clear,” Canham-Clyne said. “There’s reason to be immediately suspicious of the idea that a problem like that could be rectified in one day.”
Taco Bell was founded by Glenn Bell in 1962 in Downey and opened its 100th restaurant in Anaheim by 1967. The company went public in 1970 and moved into its current headquarters in Irvine in 2010.
Before founding Taco Bell, Bell drew inspiration from his friends and neighbors at Mitla Cafe in San Bernardino to create his own version of a crunchy taco.
Before the outbreak, Taco Bell had found its stride — and analysts say its operational advantages could carry it through the rough patch.
Experts say Taco Bell’s secret sauce isn’t just one flavor — the brand has achieved cultural relevance, menu innovation and compelling value that keep customers coming back.
“Taco Bell has long been known as a very strong brand and has managed to stay very relevant to younger consumers and to the culture, despite being 60 years old,” said Sara Senatore, a Bank of America senior analyst covering restaurants.
Senatore also credited past Taco Bell chief executive Brian Nichols for ramping up the restaurant’s digital presence and bringing more customers to its app for ordering ahead and rewards programs. Nichols served as chief executive for Taco Bell for three years before leaving in 2018 to fill the same role at Chipotle. In 2024, he was hired as chief executive for Starbucks.
Fast food brands including Jack in the Box, Wendy’s and Carl’s Jr. have struggled under the pressure of several forces this year, including a low-income consumer group that’s squeezed by inflation, rising food and labor costs and increasing competition with fast casual and casual dining alternatives.
“Anywhere you look, the below-average-income consumer has been pressured, and that’s a function of broader inflation,” said Brian Harbour, an equity analyst at Morgan Stanley. “More recently, it’s a function of gas prices.”
But Taco Bell, led since 2023 by Chief Executive Sean Tresvant, has mastered its branding and digital appeal skillfully enough to overcome these obstacles. Tresvant previously worked for Nike as chief marketing officer of the Jordan brand, which is wildly popular among younger consumers — the same group that often frequents Taco Bell.
Yum Brands Chief Financial Officer Ranjith Roy said the brand has a long-term growth opportunity in the U.S. of more than 10,000 stores.
Some of Taco Bell’s advantages come from its choice of cuisine. Mexican-inspired fast food can pack in more flavor than burgers and chicken sandwiches and offer more room for innovation. There’s also less competition and more opportunity for filling meals without expensive ingredients.
“From a value perspective, Taco Bell just has always been known for very, very sharp value,” Senatore said. “Taco Bell can afford to offer price points of 99 cents or $1.99 because for something like a bean burrito, the cost is going to be much lower than a hamburger, and it can still be very satiating.”
Taco Bell’s Luxe Value Menu offers 10 items for $3 or less, including a spicy potato soft taco for $1.69 and a cheesy bean and rice burrito for $1.89. It also has a customizable Luxe Cravings Box that comes with three items and a drink for $7.99.
In comparison, the Jack in the Box medium Classic Smashed Jack Combo comes with a quarter-pound cheeseburger, fries and a drink for $12.29. Chipotle’s chicken burrito with rice, beans, cheese and salsa, plus a side of chips, totals $12.50.
Taco Bell wins customers over with creative menu options, experts said. They sell tacos with Dorito shells, nacho-seasoned fries and a Mexican pizza.
While some fast food joints have over-innovated to the point where customers see it as tiring or gimmicky, Taco Bell appears to have found the right balance.
“In almost any other restaurant, Taco Bell’s pace of innovation would seem too fast-paced, but I think that the Taco Bell customer base welcomes that and responds to it,” said Harbour from Morgan Stanley.
Canham-Clyne predicted the brand will bounce back within six months.
“I think a lot of people are going to be making jokes about getting parasitic diarrhea from Taco Bell for the next 20 years,” he said. “But I don’t think it’s necessarily going to impact the chain’s sales long term.”
Taco Bell was sitting solidly in the sweet spot for fast food in troubled times.
The Irvine-based chain had developed a menu that was affordable enough for consumers worried about inflation and also fun enough for those looking for more than just hamburgers and pizza. Its sales and stock price were soaring. Then came cyclosporiasis.
A massive parasitic outbreak has taken Taco Bell down a peg, and now it has to rebuild its momentum.
“The brand has seen a meaningful near-term sales impact,” said Chris Turner, chief executive of Taco Bell’s owner Yum Brands, on an earnings call Thursday. “Our teams are acting quickly and transparently while keeping the safety and well-being of our consumers as the top priority.”
Unfortunately for Taco Bell, it has become one of the biggest names associated with the outbreak.
Last month, the Centers for Disease Control and Prevention announced that shredded lettuce served at Taco Bell in five states was the source of more than 1,600 cyclosporiasis infections. In comparison, an E. coli outbreak linked to McDonald’s in 2024 infected around 100 people. In 2010, a salmonella outbreak tied to Taco Bell sickened 155 people.
Still, on Thursday, the company reported same-store sales increased 7% in the second quarter, marking the ninth consecutive quarter of same-store sales growth that outpaced industry averages. Yum Brands, which also owns KFC and Habit Burger and Grill, saw operating profits increase 5% to $655 million year over year.
Caused by the parasite cyclospora, cyclosporiasis can cause diarrhea, fatigue, cramping and weight loss. More than 90 people have been hospitalized as a result of the outbreak in Indiana, Kentucky, Michigan, Ohio and West Virginia.
How Taco Bell and others in the food industry touched by the outbreak recover will depend on how long it lasts, said Aneurin Canham-Clyne, a reporter for the trade publication Restaurant Dive.
“It’s a very large outbreak,” he said. “But if you look at chains that have really suffered in the long term from reputation harm from outbreaks, it usually takes repeated outbreaks, and it usually takes outbreaks that kill people.”
On July 17, the same day the CDC announced the link to Taco Bell, the chain issued a release saying it had completed removal of affected Taylor Farms lettuce from its restaurants. Taylor Farms also issued a recall that day of all iceberg lettuce sourced from Central Mexico from a certain time period.
According to Placer.ai, Taco Bell’s foot traffic dropped 31% on July 17 and was down 30% the next day.
Yum’s shares lost as much as 12% from their July peak.
“Consumers would reasonably be wary about eating at Taco Bell for some time, even after the brand gives its all clear,” Canham-Clyne said. “There’s reason to be immediately suspicious of the idea that a problem like that could be rectified in one day.”
Taco Bell was founded by Glenn Bell in 1962 in Downey and opened its 100th restaurant in Anaheim by 1967. The company went public in 1970 and moved into its current headquarters in Irvine in 2010.
Before founding Taco Bell, Bell drew inspiration from his friends and neighbors at Mitla Cafe in San Bernardino to create his own version of a crunchy taco.
Before the outbreak, Taco Bell had found its stride — and analysts say its operational advantages could carry it through the rough patch.
Experts say Taco Bell’s secret sauce isn’t just one flavor — the brand has achieved cultural relevance, menu innovation and compelling value that keep customers coming back.
“Taco Bell has long been known as a very strong brand and has managed to stay very relevant to younger consumers and to the culture, despite being 60 years old,” said Sara Senatore, a Bank of America senior analyst covering restaurants.
Senatore also credited past Taco Bell chief executive Brian Nichols for ramping up the restaurant’s digital presence and bringing more customers to its app for ordering ahead and rewards programs. Nichols served as chief executive for Taco Bell for three years before leaving in 2018 to fill the same role at Chipotle. In 2024, he was hired as chief executive for Starbucks.
Fast food brands including Jack in the Box, Wendy’s and Carl’s Jr. have struggled under the pressure of several forces this year, including a low-income consumer group that’s squeezed by inflation, rising food and labor costs and increasing competition with fast casual and casual dining alternatives.
“Anywhere you look, the below-average-income consumer has been pressured, and that’s a function of broader inflation,” said Brian Harbour, an equity analyst at Morgan Stanley. “More recently, it’s a function of gas prices.”
But Taco Bell, led since 2023 by Chief Executive Sean Tresvant, has mastered its branding and digital appeal skillfully enough to overcome these obstacles. Tresvant previously worked for Nike as chief marketing officer of the Jordan brand, which is wildly popular among younger consumers — the same group that often frequents Taco Bell.
Yum Brands Chief Financial Officer Ranjith Roy said the brand has a long-term growth opportunity in the U.S. of more than 10,000 stores.
Some of Taco Bell’s advantages come from its choice of cuisine. Mexican-inspired fast food can pack in more flavor than burgers and chicken sandwiches and offer more room for innovation. There’s also less competition and more opportunity for filling meals without expensive ingredients.
“From a value perspective, Taco Bell just has always been known for very, very sharp value,” Senatore said. “Taco Bell can afford to offer price points of 99 cents or $1.99 because for something like a bean burrito, the cost is going to be much lower than a hamburger, and it can still be very satiating.”
Taco Bell’s Luxe Value Menu offers 10 items for $3 or less, including a spicy potato soft taco for $1.69 and a cheesy bean and rice burrito for $1.89. It also has a customizable Luxe Cravings Box that comes with three items and a drink for $7.99.
In comparison, the Jack in the Box medium Classic Smashed Jack Combo comes with a quarter-pound cheeseburger, fries and a drink for $12.29. Chipotle’s chicken burrito with rice, beans, cheese and salsa, plus a side of chips, totals $12.50.
Taco Bell wins customers over with creative menu options, experts said. They sell tacos with Dorito shells, nacho-seasoned fries and a Mexican pizza.
While some fast food joints have over-innovated to the point where customers see it as tiring or gimmicky, Taco Bell appears to have found the right balance.
“In almost any other restaurant, Taco Bell’s pace of innovation would seem too fast-paced, but I think that the Taco Bell customer base welcomes that and responds to it,” said Harbour from Morgan Stanley.
Canham-Clyne predicted the brand will bounce back within six months.
“I think a lot of people are going to be making jokes about getting parasitic diarrhea from Taco Bell for the next 20 years,” he said. “But I don’t think it’s necessarily going to impact the chain’s sales long term.”
Taco Bell was sitting solidly in the sweet spot for fast food in troubled times.
The Irvine-based chain had developed a menu that was affordable enough for consumers worried about inflation and also fun enough for those looking for more than just hamburgers and pizza. Its sales and stock price were soaring. Then came cyclosporiasis.
A massive parasitic outbreak has taken Taco Bell down a peg, and now it has to rebuild its momentum.
“The brand has seen a meaningful near-term sales impact,” said Chris Turner, chief executive of Taco Bell’s owner Yum Brands, on an earnings call Thursday. “Our teams are acting quickly and transparently while keeping the safety and well-being of our consumers as the top priority.”
Unfortunately for Taco Bell, it has become one of the biggest names associated with the outbreak.
Last month, the Centers for Disease Control and Prevention announced that shredded lettuce served at Taco Bell in five states was the source of more than 1,600 cyclosporiasis infections. In comparison, an E. coli outbreak linked to McDonald’s in 2024 infected around 100 people. In 2010, a salmonella outbreak tied to Taco Bell sickened 155 people.
Still, on Thursday, the company reported same-store sales increased 7% in the second quarter, marking the ninth consecutive quarter of same-store sales growth that outpaced industry averages. Yum Brands, which also owns KFC and Habit Burger and Grill, saw operating profits increase 5% to $655 million year over year.
Caused by the parasite cyclospora, cyclosporiasis can cause diarrhea, fatigue, cramping and weight loss. More than 90 people have been hospitalized as a result of the outbreak in Indiana, Kentucky, Michigan, Ohio and West Virginia.
How Taco Bell and others in the food industry touched by the outbreak recover will depend on how long it lasts, said Aneurin Canham-Clyne, a reporter for the trade publication Restaurant Dive.
“It’s a very large outbreak,” he said. “But if you look at chains that have really suffered in the long term from reputation harm from outbreaks, it usually takes repeated outbreaks, and it usually takes outbreaks that kill people.”
On July 17, the same day the CDC announced the link to Taco Bell, the chain issued a release saying it had completed removal of affected Taylor Farms lettuce from its restaurants. Taylor Farms also issued a recall that day of all iceberg lettuce sourced from Central Mexico from a certain time period.
According to Placer.ai, Taco Bell’s foot traffic dropped 31% on July 17 and was down 30% the next day.
Yum’s shares lost as much as 12% from their July peak.
“Consumers would reasonably be wary about eating at Taco Bell for some time, even after the brand gives its all clear,” Canham-Clyne said. “There’s reason to be immediately suspicious of the idea that a problem like that could be rectified in one day.”
Taco Bell was founded by Glenn Bell in 1962 in Downey and opened its 100th restaurant in Anaheim by 1967. The company went public in 1970 and moved into its current headquarters in Irvine in 2010.
Before founding Taco Bell, Bell drew inspiration from his friends and neighbors at Mitla Cafe in San Bernardino to create his own version of a crunchy taco.
Before the outbreak, Taco Bell had found its stride — and analysts say its operational advantages could carry it through the rough patch.
Experts say Taco Bell’s secret sauce isn’t just one flavor — the brand has achieved cultural relevance, menu innovation and compelling value that keep customers coming back.
“Taco Bell has long been known as a very strong brand and has managed to stay very relevant to younger consumers and to the culture, despite being 60 years old,” said Sara Senatore, a Bank of America senior analyst covering restaurants.
Senatore also credited past Taco Bell chief executive Brian Nichols for ramping up the restaurant’s digital presence and bringing more customers to its app for ordering ahead and rewards programs. Nichols served as chief executive for Taco Bell for three years before leaving in 2018 to fill the same role at Chipotle. In 2024, he was hired as chief executive for Starbucks.
Fast food brands including Jack in the Box, Wendy’s and Carl’s Jr. have struggled under the pressure of several forces this year, including a low-income consumer group that’s squeezed by inflation, rising food and labor costs and increasing competition with fast casual and casual dining alternatives.
“Anywhere you look, the below-average-income consumer has been pressured, and that’s a function of broader inflation,” said Brian Harbour, an equity analyst at Morgan Stanley. “More recently, it’s a function of gas prices.”
But Taco Bell, led since 2023 by Chief Executive Sean Tresvant, has mastered its branding and digital appeal skillfully enough to overcome these obstacles. Tresvant previously worked for Nike as chief marketing officer of the Jordan brand, which is wildly popular among younger consumers — the same group that often frequents Taco Bell.
Yum Brands Chief Financial Officer Ranjith Roy said the brand has a long-term growth opportunity in the U.S. of more than 10,000 stores.
Some of Taco Bell’s advantages come from its choice of cuisine. Mexican-inspired fast food can pack in more flavor than burgers and chicken sandwiches and offer more room for innovation. There’s also less competition and more opportunity for filling meals without expensive ingredients.
“From a value perspective, Taco Bell just has always been known for very, very sharp value,” Senatore said. “Taco Bell can afford to offer price points of 99 cents or $1.99 because for something like a bean burrito, the cost is going to be much lower than a hamburger, and it can still be very satiating.”
Taco Bell’s Luxe Value Menu offers 10 items for $3 or less, including a spicy potato soft taco for $1.69 and a cheesy bean and rice burrito for $1.89. It also has a customizable Luxe Cravings Box that comes with three items and a drink for $7.99.
In comparison, the Jack in the Box medium Classic Smashed Jack Combo comes with a quarter-pound cheeseburger, fries and a drink for $12.29. Chipotle’s chicken burrito with rice, beans, cheese and salsa, plus a side of chips, totals $12.50.
Taco Bell wins customers over with creative menu options, experts said. They sell tacos with Dorito shells, nacho-seasoned fries and a Mexican pizza.
While some fast food joints have over-innovated to the point where customers see it as tiring or gimmicky, Taco Bell appears to have found the right balance.
“In almost any other restaurant, Taco Bell’s pace of innovation would seem too fast-paced, but I think that the Taco Bell customer base welcomes that and responds to it,” said Harbour from Morgan Stanley.
Canham-Clyne predicted the brand will bounce back within six months.
“I think a lot of people are going to be making jokes about getting parasitic diarrhea from Taco Bell for the next 20 years,” he said. “But I don’t think it’s necessarily going to impact the chain’s sales long term.”
Taco Bell was sitting solidly in the sweet spot for fast food in troubled times.
The Irvine-based chain had developed a menu that was affordable enough for consumers worried about inflation and also fun enough for those looking for more than just hamburgers and pizza. Its sales and stock price were soaring. Then came cyclosporiasis.
A massive parasitic outbreak has taken Taco Bell down a peg, and now it has to rebuild its momentum.
“The brand has seen a meaningful near-term sales impact,” said Chris Turner, chief executive of Taco Bell’s owner Yum Brands, on an earnings call Thursday. “Our teams are acting quickly and transparently while keeping the safety and well-being of our consumers as the top priority.”
Unfortunately for Taco Bell, it has become one of the biggest names associated with the outbreak.
Last month, the Centers for Disease Control and Prevention announced that shredded lettuce served at Taco Bell in five states was the source of more than 1,600 cyclosporiasis infections. In comparison, an E. coli outbreak linked to McDonald’s in 2024 infected around 100 people. In 2010, a salmonella outbreak tied to Taco Bell sickened 155 people.
Still, on Thursday, the company reported same-store sales increased 7% in the second quarter, marking the ninth consecutive quarter of same-store sales growth that outpaced industry averages. Yum Brands, which also owns KFC and Habit Burger and Grill, saw operating profits increase 5% to $655 million year over year.
Caused by the parasite cyclospora, cyclosporiasis can cause diarrhea, fatigue, cramping and weight loss. More than 90 people have been hospitalized as a result of the outbreak in Indiana, Kentucky, Michigan, Ohio and West Virginia.
How Taco Bell and others in the food industry touched by the outbreak recover will depend on how long it lasts, said Aneurin Canham-Clyne, a reporter for the trade publication Restaurant Dive.
“It’s a very large outbreak,” he said. “But if you look at chains that have really suffered in the long term from reputation harm from outbreaks, it usually takes repeated outbreaks, and it usually takes outbreaks that kill people.”
On July 17, the same day the CDC announced the link to Taco Bell, the chain issued a release saying it had completed removal of affected Taylor Farms lettuce from its restaurants. Taylor Farms also issued a recall that day of all iceberg lettuce sourced from Central Mexico from a certain time period.
According to Placer.ai, Taco Bell’s foot traffic dropped 31% on July 17 and was down 30% the next day.
Yum’s shares lost as much as 12% from their July peak.
“Consumers would reasonably be wary about eating at Taco Bell for some time, even after the brand gives its all clear,” Canham-Clyne said. “There’s reason to be immediately suspicious of the idea that a problem like that could be rectified in one day.”
Taco Bell was founded by Glenn Bell in 1962 in Downey and opened its 100th restaurant in Anaheim by 1967. The company went public in 1970 and moved into its current headquarters in Irvine in 2010.
Before founding Taco Bell, Bell drew inspiration from his friends and neighbors at Mitla Cafe in San Bernardino to create his own version of a crunchy taco.
Before the outbreak, Taco Bell had found its stride — and analysts say its operational advantages could carry it through the rough patch.
Experts say Taco Bell’s secret sauce isn’t just one flavor — the brand has achieved cultural relevance, menu innovation and compelling value that keep customers coming back.
“Taco Bell has long been known as a very strong brand and has managed to stay very relevant to younger consumers and to the culture, despite being 60 years old,” said Sara Senatore, a Bank of America senior analyst covering restaurants.
Senatore also credited past Taco Bell chief executive Brian Nichols for ramping up the restaurant’s digital presence and bringing more customers to its app for ordering ahead and rewards programs. Nichols served as chief executive for Taco Bell for three years before leaving in 2018 to fill the same role at Chipotle. In 2024, he was hired as chief executive for Starbucks.
Fast food brands including Jack in the Box, Wendy’s and Carl’s Jr. have struggled under the pressure of several forces this year, including a low-income consumer group that’s squeezed by inflation, rising food and labor costs and increasing competition with fast casual and casual dining alternatives.
“Anywhere you look, the below-average-income consumer has been pressured, and that’s a function of broader inflation,” said Brian Harbour, an equity analyst at Morgan Stanley. “More recently, it’s a function of gas prices.”
But Taco Bell, led since 2023 by Chief Executive Sean Tresvant, has mastered its branding and digital appeal skillfully enough to overcome these obstacles. Tresvant previously worked for Nike as chief marketing officer of the Jordan brand, which is wildly popular among younger consumers — the same group that often frequents Taco Bell.
Yum Brands Chief Financial Officer Ranjith Roy said the brand has a long-term growth opportunity in the U.S. of more than 10,000 stores.
Some of Taco Bell’s advantages come from its choice of cuisine. Mexican-inspired fast food can pack in more flavor than burgers and chicken sandwiches and offer more room for innovation. There’s also less competition and more opportunity for filling meals without expensive ingredients.
“From a value perspective, Taco Bell just has always been known for very, very sharp value,” Senatore said. “Taco Bell can afford to offer price points of 99 cents or $1.99 because for something like a bean burrito, the cost is going to be much lower than a hamburger, and it can still be very satiating.”
Taco Bell’s Luxe Value Menu offers 10 items for $3 or less, including a spicy potato soft taco for $1.69 and a cheesy bean and rice burrito for $1.89. It also has a customizable Luxe Cravings Box that comes with three items and a drink for $7.99.
In comparison, the Jack in the Box medium Classic Smashed Jack Combo comes with a quarter-pound cheeseburger, fries and a drink for $12.29. Chipotle’s chicken burrito with rice, beans, cheese and salsa, plus a side of chips, totals $12.50.
Taco Bell wins customers over with creative menu options, experts said. They sell tacos with Dorito shells, nacho-seasoned fries and a Mexican pizza.
While some fast food joints have over-innovated to the point where customers see it as tiring or gimmicky, Taco Bell appears to have found the right balance.
“In almost any other restaurant, Taco Bell’s pace of innovation would seem too fast-paced, but I think that the Taco Bell customer base welcomes that and responds to it,” said Harbour from Morgan Stanley.
Canham-Clyne predicted the brand will bounce back within six months.
“I think a lot of people are going to be making jokes about getting parasitic diarrhea from Taco Bell for the next 20 years,” he said. “But I don’t think it’s necessarily going to impact the chain’s sales long term.”
Taco Bell was sitting solidly in the sweet spot for fast food in troubled times.
The Irvine-based chain had developed a menu that was affordable enough for consumers worried about inflation and also fun enough for those looking for more than just hamburgers and pizza. Its sales and stock price were soaring. Then came cyclosporiasis.
A massive parasitic outbreak has taken Taco Bell down a peg, and now it has to rebuild its momentum.
“The brand has seen a meaningful near-term sales impact,” said Chris Turner, chief executive of Taco Bell’s owner Yum Brands, on an earnings call Thursday. “Our teams are acting quickly and transparently while keeping the safety and well-being of our consumers as the top priority.”
Unfortunately for Taco Bell, it has become one of the biggest names associated with the outbreak.
Last month, the Centers for Disease Control and Prevention announced that shredded lettuce served at Taco Bell in five states was the source of more than 1,600 cyclosporiasis infections. In comparison, an E. coli outbreak linked to McDonald’s in 2024 infected around 100 people. In 2010, a salmonella outbreak tied to Taco Bell sickened 155 people.
Still, on Thursday, the company reported same-store sales increased 7% in the second quarter, marking the ninth consecutive quarter of same-store sales growth that outpaced industry averages. Yum Brands, which also owns KFC and Habit Burger and Grill, saw operating profits increase 5% to $655 million year over year.
Caused by the parasite cyclospora, cyclosporiasis can cause diarrhea, fatigue, cramping and weight loss. More than 90 people have been hospitalized as a result of the outbreak in Indiana, Kentucky, Michigan, Ohio and West Virginia.
How Taco Bell and others in the food industry touched by the outbreak recover will depend on how long it lasts, said Aneurin Canham-Clyne, a reporter for the trade publication Restaurant Dive.
“It’s a very large outbreak,” he said. “But if you look at chains that have really suffered in the long term from reputation harm from outbreaks, it usually takes repeated outbreaks, and it usually takes outbreaks that kill people.”
On July 17, the same day the CDC announced the link to Taco Bell, the chain issued a release saying it had completed removal of affected Taylor Farms lettuce from its restaurants. Taylor Farms also issued a recall that day of all iceberg lettuce sourced from Central Mexico from a certain time period.
According to Placer.ai, Taco Bell’s foot traffic dropped 31% on July 17 and was down 30% the next day.
Yum’s shares lost as much as 12% from their July peak.
“Consumers would reasonably be wary about eating at Taco Bell for some time, even after the brand gives its all clear,” Canham-Clyne said. “There’s reason to be immediately suspicious of the idea that a problem like that could be rectified in one day.”
Taco Bell was founded by Glenn Bell in 1962 in Downey and opened its 100th restaurant in Anaheim by 1967. The company went public in 1970 and moved into its current headquarters in Irvine in 2010.
Before founding Taco Bell, Bell drew inspiration from his friends and neighbors at Mitla Cafe in San Bernardino to create his own version of a crunchy taco.
Before the outbreak, Taco Bell had found its stride — and analysts say its operational advantages could carry it through the rough patch.
Experts say Taco Bell’s secret sauce isn’t just one flavor — the brand has achieved cultural relevance, menu innovation and compelling value that keep customers coming back.
“Taco Bell has long been known as a very strong brand and has managed to stay very relevant to younger consumers and to the culture, despite being 60 years old,” said Sara Senatore, a Bank of America senior analyst covering restaurants.
Senatore also credited past Taco Bell chief executive Brian Nichols for ramping up the restaurant’s digital presence and bringing more customers to its app for ordering ahead and rewards programs. Nichols served as chief executive for Taco Bell for three years before leaving in 2018 to fill the same role at Chipotle. In 2024, he was hired as chief executive for Starbucks.
Fast food brands including Jack in the Box, Wendy’s and Carl’s Jr. have struggled under the pressure of several forces this year, including a low-income consumer group that’s squeezed by inflation, rising food and labor costs and increasing competition with fast casual and casual dining alternatives.
“Anywhere you look, the below-average-income consumer has been pressured, and that’s a function of broader inflation,” said Brian Harbour, an equity analyst at Morgan Stanley. “More recently, it’s a function of gas prices.”
But Taco Bell, led since 2023 by Chief Executive Sean Tresvant, has mastered its branding and digital appeal skillfully enough to overcome these obstacles. Tresvant previously worked for Nike as chief marketing officer of the Jordan brand, which is wildly popular among younger consumers — the same group that often frequents Taco Bell.
Yum Brands Chief Financial Officer Ranjith Roy said the brand has a long-term growth opportunity in the U.S. of more than 10,000 stores.
Some of Taco Bell’s advantages come from its choice of cuisine. Mexican-inspired fast food can pack in more flavor than burgers and chicken sandwiches and offer more room for innovation. There’s also less competition and more opportunity for filling meals without expensive ingredients.
“From a value perspective, Taco Bell just has always been known for very, very sharp value,” Senatore said. “Taco Bell can afford to offer price points of 99 cents or $1.99 because for something like a bean burrito, the cost is going to be much lower than a hamburger, and it can still be very satiating.”
Taco Bell’s Luxe Value Menu offers 10 items for $3 or less, including a spicy potato soft taco for $1.69 and a cheesy bean and rice burrito for $1.89. It also has a customizable Luxe Cravings Box that comes with three items and a drink for $7.99.
In comparison, the Jack in the Box medium Classic Smashed Jack Combo comes with a quarter-pound cheeseburger, fries and a drink for $12.29. Chipotle’s chicken burrito with rice, beans, cheese and salsa, plus a side of chips, totals $12.50.
Taco Bell wins customers over with creative menu options, experts said. They sell tacos with Dorito shells, nacho-seasoned fries and a Mexican pizza.
While some fast food joints have over-innovated to the point where customers see it as tiring or gimmicky, Taco Bell appears to have found the right balance.
“In almost any other restaurant, Taco Bell’s pace of innovation would seem too fast-paced, but I think that the Taco Bell customer base welcomes that and responds to it,” said Harbour from Morgan Stanley.
Canham-Clyne predicted the brand will bounce back within six months.
“I think a lot of people are going to be making jokes about getting parasitic diarrhea from Taco Bell for the next 20 years,” he said. “But I don’t think it’s necessarily going to impact the chain’s sales long term.”
Taco Bell was sitting solidly in the sweet spot for fast food in troubled times.
The Irvine-based chain had developed a menu that was affordable enough for consumers worried about inflation and also fun enough for those looking for more than just hamburgers and pizza. Its sales and stock price were soaring. Then came cyclosporiasis.
A massive parasitic outbreak has taken Taco Bell down a peg, and now it has to rebuild its momentum.
“The brand has seen a meaningful near-term sales impact,” said Chris Turner, chief executive of Taco Bell’s owner Yum Brands, on an earnings call Thursday. “Our teams are acting quickly and transparently while keeping the safety and well-being of our consumers as the top priority.”
Unfortunately for Taco Bell, it has become one of the biggest names associated with the outbreak.
Last month, the Centers for Disease Control and Prevention announced that shredded lettuce served at Taco Bell in five states was the source of more than 1,600 cyclosporiasis infections. In comparison, an E. coli outbreak linked to McDonald’s in 2024 infected around 100 people. In 2010, a salmonella outbreak tied to Taco Bell sickened 155 people.
Still, on Thursday, the company reported same-store sales increased 7% in the second quarter, marking the ninth consecutive quarter of same-store sales growth that outpaced industry averages. Yum Brands, which also owns KFC and Habit Burger and Grill, saw operating profits increase 5% to $655 million year over year.
Caused by the parasite cyclospora, cyclosporiasis can cause diarrhea, fatigue, cramping and weight loss. More than 90 people have been hospitalized as a result of the outbreak in Indiana, Kentucky, Michigan, Ohio and West Virginia.
How Taco Bell and others in the food industry touched by the outbreak recover will depend on how long it lasts, said Aneurin Canham-Clyne, a reporter for the trade publication Restaurant Dive.
“It’s a very large outbreak,” he said. “But if you look at chains that have really suffered in the long term from reputation harm from outbreaks, it usually takes repeated outbreaks, and it usually takes outbreaks that kill people.”
On July 17, the same day the CDC announced the link to Taco Bell, the chain issued a release saying it had completed removal of affected Taylor Farms lettuce from its restaurants. Taylor Farms also issued a recall that day of all iceberg lettuce sourced from Central Mexico from a certain time period.
According to Placer.ai, Taco Bell’s foot traffic dropped 31% on July 17 and was down 30% the next day.
Yum’s shares lost as much as 12% from their July peak.
“Consumers would reasonably be wary about eating at Taco Bell for some time, even after the brand gives its all clear,” Canham-Clyne said. “There’s reason to be immediately suspicious of the idea that a problem like that could be rectified in one day.”
Taco Bell was founded by Glenn Bell in 1962 in Downey and opened its 100th restaurant in Anaheim by 1967. The company went public in 1970 and moved into its current headquarters in Irvine in 2010.
Before founding Taco Bell, Bell drew inspiration from his friends and neighbors at Mitla Cafe in San Bernardino to create his own version of a crunchy taco.
Before the outbreak, Taco Bell had found its stride — and analysts say its operational advantages could carry it through the rough patch.
Experts say Taco Bell’s secret sauce isn’t just one flavor — the brand has achieved cultural relevance, menu innovation and compelling value that keep customers coming back.
“Taco Bell has long been known as a very strong brand and has managed to stay very relevant to younger consumers and to the culture, despite being 60 years old,” said Sara Senatore, a Bank of America senior analyst covering restaurants.
Senatore also credited past Taco Bell chief executive Brian Nichols for ramping up the restaurant’s digital presence and bringing more customers to its app for ordering ahead and rewards programs. Nichols served as chief executive for Taco Bell for three years before leaving in 2018 to fill the same role at Chipotle. In 2024, he was hired as chief executive for Starbucks.
Fast food brands including Jack in the Box, Wendy’s and Carl’s Jr. have struggled under the pressure of several forces this year, including a low-income consumer group that’s squeezed by inflation, rising food and labor costs and increasing competition with fast casual and casual dining alternatives.
“Anywhere you look, the below-average-income consumer has been pressured, and that’s a function of broader inflation,” said Brian Harbour, an equity analyst at Morgan Stanley. “More recently, it’s a function of gas prices.”
But Taco Bell, led since 2023 by Chief Executive Sean Tresvant, has mastered its branding and digital appeal skillfully enough to overcome these obstacles. Tresvant previously worked for Nike as chief marketing officer of the Jordan brand, which is wildly popular among younger consumers — the same group that often frequents Taco Bell.
Yum Brands Chief Financial Officer Ranjith Roy said the brand has a long-term growth opportunity in the U.S. of more than 10,000 stores.
Some of Taco Bell’s advantages come from its choice of cuisine. Mexican-inspired fast food can pack in more flavor than burgers and chicken sandwiches and offer more room for innovation. There’s also less competition and more opportunity for filling meals without expensive ingredients.
“From a value perspective, Taco Bell just has always been known for very, very sharp value,” Senatore said. “Taco Bell can afford to offer price points of 99 cents or $1.99 because for something like a bean burrito, the cost is going to be much lower than a hamburger, and it can still be very satiating.”
Taco Bell’s Luxe Value Menu offers 10 items for $3 or less, including a spicy potato soft taco for $1.69 and a cheesy bean and rice burrito for $1.89. It also has a customizable Luxe Cravings Box that comes with three items and a drink for $7.99.
In comparison, the Jack in the Box medium Classic Smashed Jack Combo comes with a quarter-pound cheeseburger, fries and a drink for $12.29. Chipotle’s chicken burrito with rice, beans, cheese and salsa, plus a side of chips, totals $12.50.
Taco Bell wins customers over with creative menu options, experts said. They sell tacos with Dorito shells, nacho-seasoned fries and a Mexican pizza.
While some fast food joints have over-innovated to the point where customers see it as tiring or gimmicky, Taco Bell appears to have found the right balance.
“In almost any other restaurant, Taco Bell’s pace of innovation would seem too fast-paced, but I think that the Taco Bell customer base welcomes that and responds to it,” said Harbour from Morgan Stanley.
Canham-Clyne predicted the brand will bounce back within six months.
“I think a lot of people are going to be making jokes about getting parasitic diarrhea from Taco Bell for the next 20 years,” he said. “But I don’t think it’s necessarily going to impact the chain’s sales long term.”
