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Taco Bell Adds Booze to the Menu

taco bell shot
Source: Yum Brands Inc./Taco Bell
The Taco Bell restaurant chain owned by Yum! Brands Inc. (NYSE: YUM) is opening its first Taco Bell Cantina store in the Wicker Park neighborhood of Chicago in another week, and a second Cantina store in San Francisco later this month. In addition to menu changes, the new stores will serve alcoholic beverages: beer, wine, sangria and frozen drinks laced with vodka, rum and tequila in Chicago; and beer and wine only in San Francisco.

In a press release Tuesday morning, the company said it is dropping the drive-thru window, opening up its kitchen, and using technology “to create a new experience as the brand expands into urban markets.” For “urban” read hipster.

The Cantina stores are new to Taco Bell, but are following a general pattern sketched out by two of the most successful restaurant brands of recent years, Chipotle Mexican Grill Inc. (NYSE: CMG) and Starbucks Corp. (NASDAQ: SBUX).

Chipotle was among the first of the fast-casual restaurant chains with its open kitchen design and its alcoholic beverage service. Both of those will be added to the Taco Bell Cantina stores.

Starbucks pioneered a late afternoon and early evening menu that also includes alcoholic beverages and different food items. So far Starbucks has opened about 75 of the upscale stores and has plans to boost that to a total of some 2,000 stores by the end of the decade.

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Taco Bell currently has about 6,000 U.S. stores and 350 franchisees, but not all the stores will undergo the overhaul to Cantina stores, and only Cantina stores will serve alcoholic beverages. The company said it wants to add a total of 2,000 stores by 202, but it did not say how many would be Cantina stores. That probably depends on how successful the stores become.

Yum’s stock is up about 1.5% in the early afternoon Tuesday, at $82.19 in a 52-week range of $65.81 to $95.90.

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