Another run for the border

mexico city -- It sounds like a fast-food grudge match: Taco Bell is taking on the homeland of its namesake by reopening for the first time in 15 years in Mexico.

Defenders of Mexican culture see the chain’s reentry as a crowning insult to a society already overrun by U.S. chains including Starbucks Corp., Subway and KFC.

“It’s like bringing ice to the Arctic,” complained pop culture historian Carlos Monsivais.

The company’s branding strategy -- “Taco Bell is something else” -- is an attempt to distance itself from any comparison to Mexico’s beloved taquerias, which sell traditional corn tortillas stuffed with an endless variety of fillings as diverse as spicy beef, corn fungus and cow eyes.

Taco Bell, a unit of Yum Brands Inc. based in Louisville, Ky., made its name promoting its menu to Americans as something straight out of Mexico. But it’s a very different dynamic south of the border.

Here, the company is projecting a more “American” fast-food image by adding French fries -- some topped with cheese, cream, ground meat and tomatoes -- to the menu at its first store, which opened in late September in the northern city of Monterrey.

Other than the fries and sales of soft-serve ice cream, “our menu comes almost directly from the U.S. menu,” said Yum Mexico Managing Director Steven Pepper.

Some of the names have been changed to protect the sacred: The hard-shelled items sold as “tacos” in the U.S. have been renamed “tacostadas.” This made-up word is a play on “tostada,” which for Mexicans is a hard, fried disk of cornmeal that is always served flat, with toppings.

But although Mexicans eagerly buy many American brands, the taco holds a place of honor in the national cuisine. Mexicans eat them everywhere, any time of day, buying them from basket-toting street vendors in the morning or slathering them in salsa at brightly lit taquerias to wrap up a night on the town.

Taco Bell has taken pains to say that it’s not trying to masquerade as a Mexican tradition.

“One look alone is enough to tell that Taco Bell is not a taqueria,” the company said in a half-page newspaper ad. “It is a new fast-food alternative that does not pretend to be Mexican food.”

It’s still a mixed message for Mexicans like Marco Fragoso, a 39-year-old office worker sitting down for lunch at a traditional taqueria in Mexico City. The U.S. chain uses traditional Mexican names for its burritos, gorditas and chalupas.

“They’re not tacos,” Fragoso said. “They’re folded tostadas. They’re very ugly.”

Taco Bell failed with a highly publicized launch in Mexico City in 1992 when it opened a few outlets next to KFC restaurants. Now both KFC and Pizza Hut are owned by Yum Brands.

But Mexicans were less familiar with foreign chains back then, and the economy was on the verge of a crisis. The North American Free Trade Agreement had yet to be signed. The restaurants didn’t last two years. Since then, free trade and growing migration have made U.S. brands ubiquitous in Mexico, influencing everything from how people dress to how they talk.

McDonald’s has modified its menu to offer eggs “a la Mexicana” and even hands out packets of jalapeno sauce with hamburgers. In contrast, Taco Bell advises customers of offerings that are “spicy” instead of the Spanish “picante.”

“Taco Bell wants to take advantage of the perception that if something comes from the United States, it tastes better, that a country that has been Americanized is willing to Americanize food that is central to its cuisine,” Monsivais said. “It is an absurd idea, and given that it’s so absurd, it may just be successful in upper-class areas.”

With U.S. sales sluggish, Yum Brands has been expanding abroad. Its goal is to have 800 stores in its international division by the end of this year.

Yum Brands said third-quarter profit rose 21% in its international division and 28% in China, while U.S. profit rose a scant 1%. Same-store sales at company-owned Taco Bells fell 6% for the three months ended Sept. 8.

In Mexico, other U.S. chains, like KFC and Chili’s Grill & Bar, have been wildly popular. But one of the most successful has been Starbucks, which has expanded to over 150 stores in five years, even though its venti chai latte costs almost as much as a day’s minimum wage.

The Starbucks outlets are mainly in wealthier neighborhoods. Taco Bell is aiming at a different demographic -- opening in the solidly middle-class Monterrey suburb of Apodaca, an area where residents might not have traveled to the United States.

“We want to appeal to consumers who haven’t tried Taco Bell, for whom this would be their first experience with Taco Bell,” said Javier Rancano, the company’s director in Mexico.

Taco Bell is building its second store in another Monterrey suburb, and plans to open eight to 10 more locations in 2008, with plans to eventually reach 300 restaurants, Rancano said. The first stores will be company-owned, while franchise opportunities will open up in later years.

It’s a tiny slice for Taco Bell, which has almost 5,800 locations in the U.S. and 278 abroad, including other Latin American countries, Europe and Asia. But Mexico’s relatively youthful population of 107 million and its proven taste for fast food could make it an attractive business.

On a recent weekday afternoon, about 20 customers were eating at the first store, picking from a menu offering tacos for just over $1 and a grilled beef burrito for about $5.70. That’s in line with prices at other fast-food outlets in the area, but some customers weren’t impressed.

“Something is lacking here,” said one customer at the Apodaca restaurant, Jonathan Elorriaga, 26. “Maybe the food shouldn’t come with French fries.”

For many, the menu is a stumbling block. Retired Mexico City government worker Jesus Paredes, 60, said he was excited for Taco Bell’s return, but couldn’t quite identify their food.

“I remember a lot the very big tacos they sell. They were very big,” said Paredes, apparently referring to burritos. In southern Mexico, a burrito is just grilled ham and cheese on a tortilla.