ChainMail | Taco Fail

Supply chain disappoints diners and Doja Cat

ChainMail | Taco Fail

It’s not just COVID that can overwhelm supply chains, destroy business plans, and frustrate customers. Just ask Doja Cat. 

Or Taco Bell.  

In May, after a marketing buildup that included social media hype by music superstar Doja Cat, Taco Bell reintroduced Mexican Pizza to its menu. Not 2022 enough for you? Taco Bell also planned to unite Doja Cat with Dolly Parton in a TikTok musical to celebrate the item’s return.

“I’m making #MexicanPizzaTheMusical with @TacoBell,” Parton wrote on Instagram. 

Doja Cat broke the Taco Bell news during her performance at the Coachella music festival in April. “I brought back the Mexican Pizza, by the way,” she boasted to the crowd.

And so on May 19, Taco Bell reinstated a cult favorite it had culled from its lineup in 2020. Within two weeks, the chain was forced to suspend Mexican Pizza sales and postpone the musical because stores ran out of product.

Executives at Taco Bell, part of publicly traded Yum Brands, had made an embarrassing, costly error: They vastly underestimated interest in the dish and failed to properly manage their supply chain. Demand for the pizza was seven times higher than it was the last time it appeared on the menu. “We’re working diligently with our restaurants and suppliers to get more back in the hands and stomachs of our biggest fans by this fall,” Taco Bell said.

Taco Bell hasn’t explained what went wrong and declined my interview request. Some customers wonder if it was all a setup, but that’s not credible. You don’t want to alienate customers, lose revenue, or make Doja Cat look bad.

The problem appears related to the complexity of rolling out a product nationally during a supply chain crisis in the era of social media, where viral trends can amplify or distort demand. A Doja Cat rap about Mexican Pizza (“I need a shell with the sauce and cheese/give you hell if you cross me”) got 8.7 million likes on TikTok.

So now put yourself in the position of Taco Bell’s management. The chain has 7,000 U.S. stores. Mexican Pizza (two flour shells, beans, pizza sauce, beef, tomatoes, and melted cheese) is a complex enough offering that Taco Bell axed it from the menu in November 2020 to simplify its operations during COVID chaos. Suppliers have been stressed, and demand for everything from patio furniture to toilet paper has been out of whack.

How to anticipate customer appetite for Mexican Pizza? The public is desperate for new activities after living as shut-ins, but inflation and high gasoline prices are causing people to think twice about expensive indulgences. Mexican Pizza, by contrast, costs $4.49. Oh, one more complication: The trend of customers going crazy for new fast-food products is well-established. Look at how Popeye’s sold out of chicken sandwiches in 2019.

Somehow Taco Bell added up all the clues, including Doja Cat’s influence, and then vastly underestimated sales. I’m speculating, but it seems likely the shortages relate to the special shell or sauce used in Mexican Pizza, or maybe it was the custom packaging. Taco Bell had suggested that the previous version of Mexican Pizza used packaging that ran afoul of its sustainability practices.

Whatever Taco Bell needed to do to ensure that its restaurants were properly stocked to sell Mexican Pizza, the chain blew it.

“We knew you loved the Mexican Pizza,” Taco Bell wrote to its fans. “We just didn’t know how many of you loved the Mexican Pizza.”

That is the definition of a supply chain failure.

Read the complete Issue 13 of ChainMail here.

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