Wow. At our Charlotte marketing agency, we dread the point at which work gets “run by legal.” It seems corporate counsel at most companies functions like a bobble head doll … whose head only goes from side to side. So when we first saw this new Taco Bell spot that found a clever way to keep McDonald’s army of IP lawyers at bay, we were gobsmacked that Taco Bell’s ad agency, Deutsch LA, was able to get this approved.
In the ads, which begin airing Thursday, people with the same name as the classic McDonald’s clown (Deutsch found some 400 people with some variation of the name Ronald McDonald and paid a select number of them for their appearances in the commercial), endorse offerings like Taco Bell’s new “waffle taco” … and drop seemingly paradoxical (and lawsuit-worthy) lines like, “I’m Ronald McDonald and I love Taco Bell’s new breakfast.”
The fast food chain is looking to boost breakfast sales by rolling out new offerings and opening its 6,000 stores nationwide several hours earlier beginning this week, the Associated Press reports. So why aim directly at fast food breakfast goliath McDonalds? Because Americans spend $32 billion annually on fast food breakfast and McDonald’s commands one-third of the market and has been making Egg McMuffins since the 1970s.
Welcome to the Breakfast Wars.
Taco Bell has been working on its morning menu, which includes the Waffle Taco, the AM Crunch Wrap and Cinnabon Delights, for over seven years and it’s not about to flinch.
And McDonald’s took notice. this “I’m Ronald McDonald” ad, part of a campaign by Oscar-winning director Errol Morris, generated so much buzz, the Golden Arches rounded up its troops and immediately fired off a response.
They posted an image on social media showing their mascot, the red and yellow Ronald McDonald clown, kneeling down to pet the Taco Bell Chihuahua with the words, “imitation is the sincerest form of flattery.” They also offered free small cups of its McCafe coffee to customers during breakfast hours for two weeks.
McDonald’s gets about 20 percent of its sales from breakfast. It made $10 billion last year off their morning menu alone, dwarfing Taco Bell’s $7.6 billion in total sales for all menus combined.
Taco Bell has been testing breakfast since early 2012, and the rollout is certainly well-timed. Breakfast in 2013 logged its fourth consecutive year of growth for restaurants, while lunch and dinner continue to decline. In 2013, 12.5 billion breakfast visits (which accounts for about 21% of all restaurant visits in the U.S.), were made to U.S. foodservice outlets, up 3% from 2012. Lunch and dinner visits at restaurants declined 1% in 2013, according to NPD.
Fast food, which accounts for 80% of total restaurant morning meals, showed the strongest growth, with a 4% increase over the prior year. And the forecast looks good: NPD estimates that fast-food breakfast will grow a cumulative 9% over the next nine years. By comparison, the industry overall is expected to grow less than a half a percent each year for the next 10 years.