Taco Bell Bets Its Future Lies in the Chips

Taco Bell Corp., the Mexican-style fast-food chain, is jazzing up the ordinary nacho chip to put some sizzle in its sales.

Starting Thursday, the Irvine company’s 7,000 restaurants will fry their own chips, served smothered in various toppings. Until now, Taco Bell’s chips were produced by outside suppliers and shipped to the restaurants, where they were reheated and served.

In making the switch, Taco Bell hopes to capitalize on the munching habits of consumers, and to make chalupas and chips as popular a combination as burgers and fries.

Taco Bell invested $25 million in publicizing its new chips, running ads in national publications and setting up a Web site. In a bid for Wall Street’s attention, the Taco Bell Chihuahua rang the opening bell Tuesday on the New York Stock Exchange.

Taco Bell president Peter Waller said he expects nacho sales will double, accounting for between $400 million and $500 million of Taco Bell’s $5.2 billion in annual sales. The company--part of the fast-food empire of Louisville-based Tricon Global Restaurants--which also includes Pizza Hut and KFC--spent two years developing its store-fried chips.