1 00:00:01,627 --> 00:00:04,171 - [Narrator] Fast food is a trillion dollar juggernaut. 2 00:00:04,171 --> 00:00:07,883 Over 100 million Americans make it a daily ritual. 3 00:00:07,883 --> 00:00:10,469 From breakfast to a late-night snack, 4 00:00:10,469 --> 00:00:13,639 whether it comes in a bun or on a tortilla. 5 00:00:13,639 --> 00:00:15,599 - It's quick, convenient, and affordable 6 00:00:15,599 --> 00:00:16,934 no matter where you go. 7 00:00:16,934 --> 00:00:20,604 Fast food will always be part of our lives. 8 00:00:20,604 --> 00:00:22,689 - [Narrator] But just over 40 years ago, 9 00:00:22,689 --> 00:00:25,234 what defines the fast food experience 10 00:00:25,234 --> 00:00:28,445 is completely different and surprisingly limited. 11 00:00:28,445 --> 00:00:30,155 - There aren't any of the bells and whistles 12 00:00:30,155 --> 00:00:31,823 we associate with fast food today. 13 00:00:31,823 --> 00:00:33,867 - [Narrator] Until a small Mexican chain 14 00:00:33,867 --> 00:00:37,204 ignites a colossal fast food revolution. 15 00:00:37,204 --> 00:00:39,540 - We are not in the restaurant business. 16 00:00:39,540 --> 00:00:41,875 We are in the fast food business. 17 00:00:41,875 --> 00:00:44,586 - If Taco Bell is to ever expand nationally, 18 00:00:44,586 --> 00:00:46,255 they have to completely reevaluate 19 00:00:46,255 --> 00:00:48,382 the way they see themselves. 20 00:00:48,382 --> 00:00:51,093 - [Narrator] Rewriting the rule book entirely. 21 00:00:51,093 --> 00:00:52,761 - Free refills on sodas. 22 00:00:52,761 --> 00:00:55,097 - McDonald's gets credit for a lot of innovations, 23 00:00:55,097 --> 00:00:58,058 but so many great ideas came from Taco Bell. 24 00:00:58,058 --> 00:01:00,811 - Sometimes David does lead Goliath. 25 00:01:00,811 --> 00:01:02,896 - [Narrator] Forcing the biggest name in the industry 26 00:01:02,896 --> 00:01:04,563 to fight back. 27 00:01:04,563 --> 00:01:06,733 - You know that McDonald's is gonna come with a response. 28 00:01:06,733 --> 00:01:09,069 - [Narrator] With some of the most legendary creations 29 00:01:09,069 --> 00:01:10,988 fast food has ever seen. 30 00:01:10,988 --> 00:01:12,406 - Want that super sized? 31 00:01:12,406 --> 00:01:13,699 Of course. 32 00:01:13,699 --> 00:01:15,617 - [Narrator] But when a fine dining chef 33 00:01:15,617 --> 00:01:19,246 stakes everything on an unfamiliar Mexican dish, 34 00:01:19,246 --> 00:01:22,958 he's swept into a war for the future of fast food. 35 00:01:22,958 --> 00:01:25,294 - McDonald's is trying to take out Taco Bell. 36 00:01:25,294 --> 00:01:28,088 - Gentlemen, thanks for coming. 37 00:01:28,088 --> 00:01:29,881 - McDonald's and Chipotle. 38 00:01:29,881 --> 00:01:31,717 - You really don't put those two brands 39 00:01:31,717 --> 00:01:33,260 together in your head. 40 00:01:33,427 --> 00:01:37,389 - McDonald's is putting millions of dollars into burritos? 41 00:01:37,389 --> 00:01:38,724 - [Narrator] Their cutthroat battle 42 00:01:38,724 --> 00:01:41,768 won't simply evolve the way fast food looks. 43 00:01:41,768 --> 00:01:43,979 - In this business, image is everything. 44 00:01:43,979 --> 00:01:45,480 - [Narrator] Or what it offers. 45 00:01:45,480 --> 00:01:46,940 - No other fast food item 46 00:01:46,940 --> 00:01:48,734 has ever competed with the Big Mac. 47 00:01:48,734 --> 00:01:52,112 - Until the Crunch Wrap Supreme. 48 00:01:52,112 --> 00:01:56,325 - [Narrator] But the entire fast food experience forever. 49 00:01:56,325 --> 00:01:58,452 - They are Mexican inspired chains 50 00:01:58,452 --> 00:02:00,871 that ultimately remade the fast food industry. 51 00:02:02,998 --> 00:02:16,970 [intense music] 52 00:02:16,970 --> 00:02:21,975 [intense music continues] 53 00:02:24,978 --> 00:02:26,980 - [Narrator] It's the dawn of the 1980s 54 00:02:26,980 --> 00:02:30,817 and the fast food industry has spread across America. 55 00:02:30,817 --> 00:02:33,487 - [Adam C.] It's in all the major cities, suburbs, 56 00:02:33,487 --> 00:02:35,614 everywhere you go, there's fast food 57 00:02:35,614 --> 00:02:38,450 and McDonald's is the biggest fast food chain 58 00:02:38,450 --> 00:02:39,910 by a long shot. 59 00:02:39,910 --> 00:02:42,788 - [Bobby] McDonald's have over 10,000 locations 60 00:02:42,788 --> 00:02:44,873 and they have over a quarter of the market share 61 00:02:44,873 --> 00:02:46,833 for all of fast food. 62 00:02:46,833 --> 00:02:49,711 - When McDonald's came out, they were the pioneers. 63 00:02:49,711 --> 00:02:52,631 Cut to the 1980s, and every fast food chain 64 00:02:52,631 --> 00:02:55,384 is basically working with the same model: 65 00:02:55,384 --> 00:02:57,552 the convenient, simple, affordable way 66 00:02:57,552 --> 00:02:59,304 to get food on the go. 67 00:02:59,304 --> 00:03:00,806 - [Narrator] While it's grown in scale, 68 00:03:00,806 --> 00:03:02,599 fast food is still defined 69 00:03:02,599 --> 00:03:04,976 by its original simplistic approach. 70 00:03:04,976 --> 00:03:07,062 - [Adam] Fast food was pretty basic. 71 00:03:07,062 --> 00:03:10,273 Go in, order what's on the board, and go on your merry way. 72 00:03:10,273 --> 00:03:13,110 - The fast food industry at that time is still pretty young. 73 00:03:13,110 --> 00:03:14,695 McDonald's and Burger King 74 00:03:14,820 --> 00:03:17,322 only just recently opened their first drive-through windows. 75 00:03:17,322 --> 00:03:18,865 - [Narrator] After only three decades, 76 00:03:18,865 --> 00:03:22,327 the rules of fast food are still being written. 77 00:03:22,327 --> 00:03:25,080 - [Kate] Fast food started out as a burgers and fries business, 78 00:03:25,080 --> 00:03:26,456 and in the early 80s, 79 00:03:26,456 --> 00:03:29,126 it still really is that type of product. 80 00:03:29,126 --> 00:03:30,335 - [Chirag] Today, when we think of fast food, 81 00:03:30,335 --> 00:03:31,753 it's not just one thing, 82 00:03:31,753 --> 00:03:32,921 but back then when you thought of fast food, 83 00:03:32,921 --> 00:03:35,215 you thought of a burger, fries, and soda, 84 00:03:35,215 --> 00:03:38,009 and maybe the occasional chicken sandwich. 85 00:03:38,009 --> 00:03:39,761 - And that's what people assumed 86 00:03:39,761 --> 00:03:42,139 a fast food restaurant was gonna be, 87 00:03:42,139 --> 00:03:44,057 so there's still room for innovation. 88 00:03:44,057 --> 00:03:46,268 - There's still a lot of places for it to go 89 00:03:46,268 --> 00:03:48,562 and oh, the places it will go. 90 00:03:51,731 --> 00:03:53,442 - [Narrator] In 1983, the board 91 00:03:53,442 --> 00:03:56,653 of America's second largest soda conglomerate, 92 00:03:56,653 --> 00:03:58,947 PepsiCo is struggling to grow 93 00:03:58,947 --> 00:04:02,909 one of its subsidiary restaurant chains: Taco Bell. 94 00:04:02,909 --> 00:04:05,829 - [Erin] Taco Bell was not as big as it is today. 95 00:04:05,829 --> 00:04:07,497 It was a growing restaurant business 96 00:04:07,497 --> 00:04:10,250 and it was mostly in the Western states. 97 00:04:10,250 --> 00:04:11,918 - [Bill] The way Taco Bell operates, it's as if 98 00:04:11,918 --> 00:04:14,421 they're competing with mom and pop Mexican restaurants, 99 00:04:14,421 --> 00:04:16,882 not the big players in the fast food industry. 100 00:04:16,882 --> 00:04:18,382 They don't have drive-throughs. 101 00:04:18,382 --> 00:04:20,594 The people at the counter take your order by hand 102 00:04:20,594 --> 00:04:22,429 and they write on a plexiglass board 103 00:04:22,429 --> 00:04:24,556 for the people in the kitchen to see. 104 00:04:24,556 --> 00:04:25,724 Everything is cooked on site, 105 00:04:25,724 --> 00:04:27,893 which makes it incredibly slow. 106 00:04:27,893 --> 00:04:29,144 - Taco Bell's menu back then 107 00:04:29,144 --> 00:04:30,520 looked nothing like it does today. 108 00:04:30,520 --> 00:04:32,105 They had about six items on the menu 109 00:04:32,105 --> 00:04:34,024 including rice and beans and tacos. 110 00:04:35,776 --> 00:04:38,403 - [Brooke] Five years after PepsiCo has bought Taco Bell, 111 00:04:38,403 --> 00:04:40,906 they've expanded by 600 new locations, 112 00:04:40,906 --> 00:04:42,866 but they aren't making much money. 113 00:04:44,117 --> 00:04:46,036 - [Narrator] To save the troubled brand, 114 00:04:46,036 --> 00:04:50,874 the board brings on a new president: John Martin. 115 00:04:50,874 --> 00:04:53,460 - John Martin is someone who industry people would say 116 00:04:53,460 --> 00:04:55,587 had ketchup running through his veins. 117 00:04:55,587 --> 00:04:58,089 He starts off as a district manager at Burger King 118 00:04:58,089 --> 00:04:59,674 and eventually becomes the president 119 00:04:59,674 --> 00:05:01,760 of its rival Burger Chef. 120 00:05:01,760 --> 00:05:03,220 - Let's start with a question. 121 00:05:04,763 --> 00:05:06,139 What is Taco Bell? 122 00:05:07,349 --> 00:05:09,309 - John Martin was innovative and passionate. 123 00:05:09,309 --> 00:05:11,269 He was seen as a shark. 124 00:05:11,269 --> 00:05:13,980 - It's a Mexican restaurant chain. 125 00:05:13,980 --> 00:05:16,274 - No, not exactly. 126 00:05:17,484 --> 00:05:19,277 - [Adam] John Martin believes that if Taco Bell 127 00:05:19,277 --> 00:05:23,698 is to ever expand nationally, they have to figure out a way 128 00:05:23,698 --> 00:05:27,410 to pivot the public perception of Taco Bell, 129 00:05:27,410 --> 00:05:29,329 and they have to completely reevaluate 130 00:05:29,329 --> 00:05:31,081 the way they see themselves. 131 00:05:31,081 --> 00:05:34,793 - Gentlemen, we are not in the restaurant business. 132 00:05:34,793 --> 00:05:37,087 We are in the fast food business. 133 00:05:38,505 --> 00:05:42,092 I believe the taco can be the next great American food. 134 00:05:43,802 --> 00:05:45,178 - [Adam] What John Martin saw 135 00:05:45,178 --> 00:05:47,389 was that even though they're serving tacos, 136 00:05:47,389 --> 00:05:50,559 they have to think and behave like McDonald's. 137 00:05:51,810 --> 00:05:53,687 - [Erin] He believes people need to look at Taco Bell 138 00:05:53,687 --> 00:05:57,440 and see fast food, just as they do with burger joints. 139 00:05:57,440 --> 00:05:59,192 So he decides he's going to start 140 00:05:59,192 --> 00:06:01,319 by updating its appearance. 141 00:06:01,319 --> 00:06:03,655 - [Narrator] Martin puts his reputation on the line 142 00:06:03,655 --> 00:06:07,367 with a high stakes multi-million dollar brand overhaul. 143 00:06:09,286 --> 00:06:10,912 - [Adam C.] To reshape Taco Bell 144 00:06:10,912 --> 00:06:13,540 in the image of big fast food restaurants like McDonald's, 145 00:06:13,540 --> 00:06:15,417 he does what those other restaurants do: 146 00:06:15,417 --> 00:06:18,670 streamlines the operations, puts in drive-through windows, 147 00:06:18,670 --> 00:06:22,007 even introduces a new logo, the Bell, 148 00:06:22,007 --> 00:06:25,385 which is now an iconic piece of American iconography. 149 00:06:25,385 --> 00:06:26,428 - [Narrator] Martin accelerates 150 00:06:26,428 --> 00:06:28,763 Taco Bell's growth threefold, 151 00:06:28,763 --> 00:06:31,641 aiming to make it as recognizable as McDonald's 152 00:06:31,641 --> 00:06:34,936 in every region of the country within just a few years. 153 00:06:34,936 --> 00:06:36,730 - I didn't interact with a Taco Bell 154 00:06:36,730 --> 00:06:38,815 until my mid to late teens. 155 00:06:38,815 --> 00:06:41,067 That's when it finally hit our neck of the woods. 156 00:06:41,067 --> 00:06:42,652 And at that point, 157 00:06:42,652 --> 00:06:44,571 for kids who were raised on McDonald's and Burger King, 158 00:06:44,571 --> 00:06:46,615 it was exotic eating. 159 00:06:46,615 --> 00:06:48,742 - [Narrator] As Martin works to model Taco Bell 160 00:06:48,742 --> 00:06:53,872 in the familiar fast food image, McDonald's executives 161 00:06:53,872 --> 00:06:58,043 are trying to write fast foods next chapter. 162 00:06:58,043 --> 00:06:59,628 - Unlike modern McDonald's, 163 00:06:59,628 --> 00:07:01,254 which have a variety of menu items 164 00:07:01,254 --> 00:07:03,340 beyond burgers and fries like salads, 165 00:07:03,340 --> 00:07:06,426 back in the day, the menu was much more streamlined. 166 00:07:06,426 --> 00:07:10,096 - [Adam] But after McDonald's experienced two incredible 167 00:07:10,096 --> 00:07:12,349 decades of rapid growth, 168 00:07:12,349 --> 00:07:14,768 sales are beginning to stagnate. 169 00:07:14,768 --> 00:07:17,687 - [Erin] McDonald's sees that it might be smart to diversify, 170 00:07:17,687 --> 00:07:20,899 to stay ahead, so they come up with a non-burger menu item, 171 00:07:20,899 --> 00:07:23,610 the McNugget, and it's a huge success, 172 00:07:23,610 --> 00:07:27,197 bringing in $700 million the following year. 173 00:07:27,197 --> 00:07:29,866 - [Narrator] The man behind the menu expansion 174 00:07:29,866 --> 00:07:32,827 is senior chairman Fred Turner. 175 00:07:32,827 --> 00:07:35,705 - Fred Turner started as just a line cook 176 00:07:35,705 --> 00:07:38,124 and moved his way all the way up. 177 00:07:38,124 --> 00:07:39,668 - Fred Turner is there 178 00:07:39,668 --> 00:07:43,088 as McDonald's introduces the drive-through, the Big Mac, 179 00:07:43,088 --> 00:07:47,258 and becomes an integral part of McDonald's rise. 180 00:07:47,258 --> 00:07:48,760 - [Narrator] Turner pushes his team 181 00:07:48,760 --> 00:07:51,805 to explore how far they can take fast food. 182 00:07:53,598 --> 00:07:56,893 - So first off, we have the Mcpizza. 183 00:07:58,103 --> 00:07:59,521 - [Chirag] His idea was that if McDonald's 184 00:07:59,521 --> 00:08:01,481 could define the category at one point, 185 00:08:01,481 --> 00:08:02,941 why can't they redefine it 186 00:08:02,941 --> 00:08:04,693 by adding more things to the menu? 187 00:08:07,904 --> 00:08:09,155 - A salad? 188 00:08:09,155 --> 00:08:11,908 - People want a healthier option. 189 00:08:11,908 --> 00:08:13,493 - They're trying all kinds of stuff 190 00:08:13,493 --> 00:08:16,496 because you never know what the next big hit is gonna be. 191 00:08:21,543 --> 00:08:23,044 - [Narrator] With Turner's blessing, 192 00:08:23,169 --> 00:08:27,424 McDonald's releases the Mcpizza, Chicken L.T. sandwich, 193 00:08:27,424 --> 00:08:29,467 and a variety of salads. 194 00:08:29,467 --> 00:08:31,386 - [Bill] This had never been done 195 00:08:31,386 --> 00:08:33,554 and there was no telling how people would take it. 196 00:08:33,554 --> 00:08:35,849 It's really all about someone with the right idea 197 00:08:35,849 --> 00:08:37,015 breaking the code. 198 00:08:41,270 --> 00:08:44,274 - [Narrator] Meanwhile, after four years of rapid expansion 199 00:08:44,274 --> 00:08:47,277 and modernization, Taco Bell is national 200 00:08:47,277 --> 00:08:50,071 with over 2000 locations, 201 00:08:50,071 --> 00:08:53,658 but after an initial 37% surge in profits, 202 00:08:53,658 --> 00:08:55,910 sales are sagging. 203 00:08:55,910 --> 00:08:58,371 - Martin spent hundreds of millions of dollars 204 00:08:58,371 --> 00:09:01,207 revamping this brand and even adding new things to the menu 205 00:09:01,207 --> 00:09:04,961 like Mexican seafood salad, but nothing has been a hit. 206 00:09:06,046 --> 00:09:07,589 - And Taco Bell being the size it is, 207 00:09:07,589 --> 00:09:09,674 can't afford to lose that kind of money. 208 00:09:11,217 --> 00:09:12,719 - [Jason] It's a daunting time. 209 00:09:12,719 --> 00:09:14,637 It's a big moment of transition. 210 00:09:14,637 --> 00:09:17,599 I think for him it was probably make it or break it now. 211 00:09:21,019 --> 00:09:22,228 - What'd you like? 212 00:09:22,228 --> 00:09:26,775 - Oh, I'll have the chicken tenders. 213 00:09:26,775 --> 00:09:28,443 - That's only on the kids' menu. 214 00:09:30,361 --> 00:09:32,280 - Can I still order it? 215 00:09:32,280 --> 00:09:33,281 - Kids only. 216 00:09:34,282 --> 00:09:35,325 - Okay. 217 00:09:35,325 --> 00:09:36,659 - I'll give you a minute. 218 00:09:38,286 --> 00:09:40,330 - [Adam] John Martin, he needs a big idea, 219 00:09:40,330 --> 00:09:42,082 something that would allow Taco Bell 220 00:09:42,082 --> 00:09:45,335 to compete with the true giants of the fast food world. 221 00:09:46,920 --> 00:09:48,630 - Oh, I didn't order a second cup. 222 00:09:49,422 --> 00:09:50,632 - Refills are free. 223 00:10:00,934 --> 00:10:05,271 - John Martin arrives at an incredible realization. 224 00:10:05,271 --> 00:10:07,398 He's been going about this all wrong. 225 00:10:08,608 --> 00:10:11,236 He's been trying to do what McDonald's is doing, 226 00:10:11,236 --> 00:10:13,446 but that's not going to work. 227 00:10:13,446 --> 00:10:17,283 He realizes the secret to compete with McDonald's 228 00:10:17,283 --> 00:10:22,122 is to offer an incentive that McDonald's simply does not. 229 00:10:28,086 --> 00:10:31,589 - [Narrator] In 1987, John Martin has a radical idea 230 00:10:31,589 --> 00:10:34,300 for Taco Bell to revolutionize fast food 231 00:10:34,300 --> 00:10:38,888 beyond McDonald's familiar model by creating his own rules. 232 00:10:38,888 --> 00:10:41,808 - Fast food is about convenience and value. 233 00:10:41,808 --> 00:10:44,978 McDonald's has got convenience down pat, 234 00:10:44,978 --> 00:10:48,898 but he realizes the prices are what brought people in. 235 00:10:48,898 --> 00:10:51,109 - [John] We add an additional menu 236 00:10:51,109 --> 00:10:54,195 with everything priced under a dollar. 237 00:10:54,195 --> 00:10:56,614 - [David] He comes up with what he calls a value menu, 238 00:10:56,614 --> 00:11:00,869 59 cent tacos, 69 cent taco supremes. 239 00:11:00,869 --> 00:11:03,329 - [Adam] It's crazy when you look at the fast food 240 00:11:03,329 --> 00:11:05,039 landscape now, you go, "Wait, there was a time 241 00:11:05,039 --> 00:11:08,334 where people didn't have value menus?" 242 00:11:08,334 --> 00:11:10,295 But it's the truth. 243 00:11:10,295 --> 00:11:12,839 - And we throw in free refills on sodas. 244 00:11:12,839 --> 00:11:14,591 - [David] At that point, nobody did that. 245 00:11:14,591 --> 00:11:18,595 You had a small, medium, or large soda pop. 246 00:11:18,595 --> 00:11:21,639 - John Martin realizes this is the way forward. 247 00:11:21,639 --> 00:11:24,726 Free refills and a value menu, 248 00:11:24,726 --> 00:11:27,395 the very thing that would revolutionize fast food 249 00:11:27,395 --> 00:11:28,313 as we know it. 250 00:11:28,313 --> 00:11:29,522 - Have you lost your mind? 251 00:11:31,357 --> 00:11:33,234 - But they don't like it. 252 00:11:33,234 --> 00:11:36,905 - So how exactly are we supposed to turn a profit? 253 00:11:36,905 --> 00:11:38,072 - I'm glad you asked. 254 00:11:40,074 --> 00:11:45,371 We are gonna take the kitchen out of the restaurant. 255 00:11:45,371 --> 00:11:47,916 - [Erin] Martin's first step in revamping Taco Bell 256 00:11:47,916 --> 00:11:50,501 was to make people see it as fast food like McDonald's, 257 00:11:50,501 --> 00:11:52,587 which he did by updating its appearance, 258 00:11:52,587 --> 00:11:55,131 but things were kind of slow. 259 00:11:55,131 --> 00:11:58,051 Taco Bell is still making a lot of its food fresh, 260 00:11:58,051 --> 00:12:00,261 so now he needs to make it more like McDonald's 261 00:12:00,261 --> 00:12:03,973 by making it more efficient operationally behind the scenes. 262 00:12:03,973 --> 00:12:07,685 - [David] So he says, I'm going to bring in food items 263 00:12:07,685 --> 00:12:10,438 that are made in a central location 264 00:12:10,438 --> 00:12:13,566 and heat it up like the fast food model. 265 00:12:13,566 --> 00:12:16,569 - He introduces a model called the K minus system, 266 00:12:16,569 --> 00:12:18,321 which means kitchen minus. 267 00:12:18,321 --> 00:12:21,324 Goes from 70% kitchen and 30% dining room 268 00:12:21,324 --> 00:12:23,785 to 70% dining room and 30% kitchen. 269 00:12:23,785 --> 00:12:27,664 - This is how we lower prices without sacrificing profit. 270 00:12:29,123 --> 00:12:31,334 - [Narrator] And Martin sees a growing demographic 271 00:12:31,334 --> 00:12:34,045 that McDonald's is not tapping into. 272 00:12:34,045 --> 00:12:37,632 - McDonald's is committed first and foremost to families. 273 00:12:37,632 --> 00:12:39,217 - [Adam] And it's really marketed 274 00:12:39,217 --> 00:12:42,512 as the American family gathering place. 275 00:12:42,512 --> 00:12:44,222 - [Natalia] But by the late 1980s, 276 00:12:44,222 --> 00:12:46,766 the MTV generation is coming of age. 277 00:12:46,766 --> 00:12:48,643 They're moving away to go to college, 278 00:12:48,643 --> 00:12:51,354 so they have a little more independence as consumers 279 00:12:51,354 --> 00:12:53,648 to choose what they want to eat. 280 00:12:53,648 --> 00:12:54,816 - [Narrator] In a Hail Mary, 281 00:12:54,816 --> 00:12:58,236 to save Taco Bell and his career, 282 00:12:58,236 --> 00:13:01,072 Martin pours millions more into the renovation 283 00:13:01,072 --> 00:13:06,119 of 2000 plus locations and quadruples his ad budget 284 00:13:06,119 --> 00:13:08,246 to push his new innovations. 285 00:13:08,246 --> 00:13:10,290 ♪ 59, 79, 99 286 00:13:10,290 --> 00:13:11,624 - [Bobby] I still remember the commercials. 287 00:13:11,624 --> 00:13:14,627 ♪ 59, 79, 99 288 00:13:14,627 --> 00:13:17,755 If you're in a pinch, you're a broke college student, 289 00:13:17,755 --> 00:13:19,090 that's low prices. 290 00:13:19,090 --> 00:13:21,843 It's so cheap, you'll impulse buy it. 291 00:13:21,843 --> 00:13:25,930 - [Bill] The value menu and free refills are both seismic events. 292 00:13:25,930 --> 00:13:27,932 Free refills had previously only been 293 00:13:27,932 --> 00:13:29,309 for a cup of coffee at a diner. 294 00:13:29,309 --> 00:13:31,519 Sodas you did not get free. 295 00:13:31,519 --> 00:13:33,521 - [Chirag] Can you imagine going to a fast food restaurant now 296 00:13:33,521 --> 00:13:36,441 and not having the option of a self-service soda fountain? 297 00:13:36,441 --> 00:13:39,402 But back then, Taco Bell was the only one doing this. 298 00:13:39,402 --> 00:13:41,904 - [Jason] I think, nowadays, people might misremember 299 00:13:41,904 --> 00:13:43,281 or think that those innovations 300 00:13:43,281 --> 00:13:45,366 actually came from McDonald's, but they didn't. 301 00:13:45,366 --> 00:13:49,203 They came from Taco Bell and they deserve the credit for it. 302 00:13:49,203 --> 00:13:53,499 - [Erin] The value menu has a huge impact on their business. 303 00:13:53,499 --> 00:13:56,586 It actually increased sales by 60% 304 00:13:56,586 --> 00:14:00,423 and changed the game for fast food in the United States. 305 00:14:00,423 --> 00:14:02,550 - [Narrator] The value strategy success 306 00:14:02,550 --> 00:14:05,261 quickly sparks a wave of imitators. 307 00:14:05,261 --> 00:14:06,721 - [Bobby] And the next thing you know, 308 00:14:06,721 --> 00:14:09,849 Wendy's has got the extra value menu for 99 cents. 309 00:14:09,849 --> 00:14:12,769 Arby's is doing five for five. 310 00:14:14,437 --> 00:14:17,482 - [Narrator] But customers choosing value over variety 311 00:14:17,482 --> 00:14:20,318 is bad news for McDonald's Fred Turner. 312 00:14:21,652 --> 00:14:23,988 -- [Brooke] Fred Turner's recent attempts at menu expansion 313 00:14:23,988 --> 00:14:26,074 have not gone over as well as he expected, 314 00:14:26,074 --> 00:14:28,701 'cause it turns out no one goes to McDonald's 315 00:14:28,701 --> 00:14:30,119 when they want pizza, 316 00:14:30,119 --> 00:14:31,954 and now Fred's on the back foot. 317 00:14:33,081 --> 00:14:36,042 - They're giving away free refills on soda. 318 00:14:36,042 --> 00:14:37,627 - They're desperate. 319 00:14:37,627 --> 00:14:39,128 - It's working. 320 00:14:39,128 --> 00:14:41,297 - [Adam] Fred Turner sees that Taco Bell's killing it, 321 00:14:41,297 --> 00:14:45,051 but he doesn't just want to copy Taco Bell's innovations. 322 00:14:48,721 --> 00:14:50,807 - If people want extra soda, 323 00:14:50,807 --> 00:14:53,643 we'll give it to 'em at a markup. 324 00:14:54,769 --> 00:14:56,604 - How do you mean? 325 00:14:57,146 --> 00:14:58,773 - Sell them a bigger cup. 326 00:14:58,773 --> 00:15:01,859 - [Brooke] For Fred Turner, value isn't about spending less. 327 00:15:01,859 --> 00:15:03,486 It's about getting more. 328 00:15:03,486 --> 00:15:06,656 That's really what families are gonna respond to. 329 00:15:06,656 --> 00:15:08,241 - What's larger than large? 330 00:15:14,247 --> 00:15:16,749 - [Adam] In 1987, he creates 331 00:15:16,749 --> 00:15:20,878 arguably one of the most iconic innovations 332 00:15:20,878 --> 00:15:22,255 in all of fast food, 333 00:15:22,255 --> 00:15:25,466 and without question, in McDonald's history. 334 00:15:25,466 --> 00:15:27,260 - Just supersize me. 335 00:15:27,260 --> 00:15:29,387 - [Adam] The supersized meal. 336 00:15:29,387 --> 00:15:31,639 - Supersized literally meant 337 00:15:31,639 --> 00:15:36,602 they were going to now offer drinks in very large cups, 338 00:15:37,562 --> 00:15:40,940 a quart of soda along with your burger 339 00:15:40,940 --> 00:15:43,651 with supersized fries. 340 00:15:43,651 --> 00:15:45,820 - [Erin] Basically, these are high margin items 341 00:15:45,820 --> 00:15:47,905 where people can get a lot more, 342 00:15:47,905 --> 00:15:50,158 but it doesn't cost McDonald's that much more 343 00:15:50,158 --> 00:15:52,410 so they make a bunch of money off of it. 344 00:15:52,410 --> 00:15:54,370 - [Adam] Once customers realize 345 00:15:54,370 --> 00:15:56,956 that for just a scant more amount of money, 346 00:15:56,956 --> 00:16:01,294 they can get so much more food, there's no going back. 347 00:16:01,294 --> 00:16:02,920 - You want that supersized? 348 00:16:02,920 --> 00:16:06,174 Of course, like supersize those bad boys. 349 00:16:06,174 --> 00:16:08,426 - [Peyton] Supersize was a huge deal 350 00:16:08,426 --> 00:16:11,429 - [David] and it brings a lot of people back to McDonald's 351 00:16:11,429 --> 00:16:13,264 that had started to go elsewhere. 352 00:16:13,264 --> 00:16:14,765 - [Narrator] Supersize drives 353 00:16:14,765 --> 00:16:17,810 record annual sales of $6 billion, 354 00:16:20,521 --> 00:16:22,315 yet, it doesn't stop the rise 355 00:16:22,315 --> 00:16:24,692 of what has become the fastest growing chain 356 00:16:24,692 --> 00:16:27,778 in the country: Taco Bell. 357 00:16:27,778 --> 00:16:29,197 - So by the late 1980s, 358 00:16:29,197 --> 00:16:31,157 Taco Bell is finally in the conversation 359 00:16:31,157 --> 00:16:32,325 with the big brands. 360 00:16:32,325 --> 00:16:35,036 It has 2,400 stores nationwide 361 00:16:35,036 --> 00:16:37,496 generating $900 million in revenue. 362 00:16:37,496 --> 00:16:39,832 - [Narrator] The success gives rise to a range 363 00:16:39,832 --> 00:16:42,251 of new Mexican fast food options. 364 00:16:42,251 --> 00:16:44,795 - [Natalia] Mexican food in a fast food environment 365 00:16:44,795 --> 00:16:48,007 is kind of new and edgy and feels more interesting 366 00:16:48,007 --> 00:16:50,092 than the old burger and fries. 367 00:16:50,092 --> 00:16:53,095 - Taco chains are spreading like wildfire: 368 00:16:53,095 --> 00:16:57,391 Del Taco, Taco John's, Taco Cabana, you name it. 369 00:16:57,391 --> 00:17:01,354 - [Narrator] And by the early 90s, Taco Bell surpasses KFC 370 00:17:01,354 --> 00:17:04,732 to become one of the top five fast food chains. 371 00:17:06,233 --> 00:17:08,819 - [David] John Martin comes in and he did change the game 372 00:17:08,819 --> 00:17:13,699 and his model becomes the norm in the fast food industry 373 00:17:13,699 --> 00:17:15,409 and it still is today. 374 00:17:15,409 --> 00:17:20,080 And in doing so, he cements a spot in the industry 375 00:17:20,080 --> 00:17:21,707 for Taco Bell. 376 00:17:21,707 --> 00:17:24,085 - [Narrator] But as Taco Bell's sales soar 377 00:17:26,503 --> 00:17:30,883 400 miles north, 378 00:17:30,883 --> 00:17:33,094 an unlikely competitor hasn't even started. 379 00:17:33,094 --> 00:17:34,762 - [Brooke] Enter Steve Ells. 380 00:17:34,762 --> 00:17:36,347 He was a line cook, 381 00:17:36,347 --> 00:17:40,434 but he knew that he wanted to do something much bigger. 382 00:17:44,397 --> 00:17:45,731 - Wow. 383 00:17:45,731 --> 00:17:47,108 - [Narrator] Ells doesn't know it yet, 384 00:17:47,108 --> 00:17:49,944 but he's going to transform an unknown meal 385 00:17:49,944 --> 00:17:55,032 into a $76 billion market that outperforms pizza, 386 00:17:55,324 --> 00:17:59,036 spearhead a new $200 billion restaurant category, 387 00:17:59,036 --> 00:18:03,082 and land in the middle of a massive fast food showdown. 388 00:18:08,713 --> 00:18:10,006 In 1992, 389 00:18:10,006 --> 00:18:11,757 in San Francisco's 390 00:18:11,757 --> 00:18:13,217 Mission District, 391 00:18:13,217 --> 00:18:15,761 a recent transplant, Steve Ells, 392 00:18:15,761 --> 00:18:17,638 is trying out the local cuisine. 393 00:18:18,723 --> 00:18:20,850 - [Adam] Steve Ells grew up in Boulder, Colorado 394 00:18:20,850 --> 00:18:23,686 and attended the prestigious Culinary Institute of America, 395 00:18:23,686 --> 00:18:24,979 the breeding ground 396 00:18:24,979 --> 00:18:29,317 for some of the greatest American chefs ever. 397 00:18:29,317 --> 00:18:32,403 - Ells's dream is to have his own fine dining restaurant, 398 00:18:32,403 --> 00:18:34,572 but that's really hard to do right off the bat 399 00:18:34,572 --> 00:18:36,198 unless you have a lot of money. 400 00:18:36,198 --> 00:18:40,870 So out of culinary school, he gets a job as a line cook. 401 00:18:40,870 --> 00:18:43,080 - [Narrator] One day a friend introduces him 402 00:18:43,080 --> 00:18:45,082 to an unfamiliar meal. 403 00:18:45,082 --> 00:18:47,752 - [Adam] It is a variation on a Mexican dish 404 00:18:47,752 --> 00:18:51,213 that was developed right in the Mission District. 405 00:18:51,213 --> 00:18:52,089 - Wow. 406 00:18:52,089 --> 00:18:54,467 - The mission style burrito. 407 00:18:54,467 --> 00:18:56,177 - [Erin] When we think of burritos now, 408 00:18:56,177 --> 00:18:58,054 we are thinking of a mission style burrito, 409 00:18:58,054 --> 00:18:59,680 that's just a burrito to us, 410 00:18:59,680 --> 00:19:01,307 but many people at that time 411 00:19:01,307 --> 00:19:03,809 had no idea what a burrito even was. 412 00:19:03,809 --> 00:19:06,771 They might not have tried any burrito before. 413 00:19:06,771 --> 00:19:08,064 - This ain't Taco Bell. 414 00:19:09,315 --> 00:19:12,360 - Taco Bell is the default Mexican food 415 00:19:12,360 --> 00:19:14,737 that most people in America have probably tried, 416 00:19:14,737 --> 00:19:18,783 and it's a very fast food version of what Mexican food is. 417 00:19:19,909 --> 00:19:23,329 But this burrito is big, it's hearty. 418 00:19:23,329 --> 00:19:25,456 There's so many flavors layered into this thing 419 00:19:25,456 --> 00:19:27,041 and ingredients. 420 00:19:27,041 --> 00:19:29,210 - There's rice in it, there's meat, there's beans, 421 00:19:29,210 --> 00:19:31,545 there's cheese, there's salsa, there's guac, 422 00:19:31,545 --> 00:19:33,255 there's sour cream. 423 00:19:33,255 --> 00:19:37,468 - [Jason] He realizes people don't really understand 424 00:19:37,468 --> 00:19:41,889 like to have a really great freshly prepared Mexican meal. 425 00:19:43,683 --> 00:19:45,601 - So Ells starts to think 426 00:19:45,601 --> 00:19:48,562 if he can capitalize on the mission burrito, 427 00:19:48,562 --> 00:19:51,482 it might just be a way to fund his real dream: 428 00:19:51,482 --> 00:19:52,983 a fine dining restaurant. 429 00:19:56,487 --> 00:20:00,074 - [Narrator] In 1993, Ells walks away from a steady paycheck 430 00:20:00,950 --> 00:20:04,537 and moves home to pursue an unproven idea: 431 00:20:04,537 --> 00:20:06,539 his own burrito shop. 432 00:20:06,539 --> 00:20:10,167 - [Jason] Steve Ells opening a mission style burrito place 433 00:20:10,167 --> 00:20:12,545 in Denver, Colorado, it's a pretty big risk. 434 00:20:12,545 --> 00:20:14,213 Outside of the Bay Area, 435 00:20:14,213 --> 00:20:16,757 no one had really experienced these burritos 436 00:20:16,757 --> 00:20:19,885 and there's no evidence that they're going to embrace it. 437 00:20:19,885 --> 00:20:22,054 - [Narrator] Ells rents a bare bones space 438 00:20:22,054 --> 00:20:23,723 near the University of Denver, 439 00:20:23,723 --> 00:20:26,434 believing young customers will see the appeal 440 00:20:26,434 --> 00:20:29,854 of affordable food prepared with the highest quality. 441 00:20:31,272 --> 00:20:32,898 - [Chirag] Ells wants to add a gourmet touch to everything. 442 00:20:32,898 --> 00:20:34,650 He wants to prepare the food on site. 443 00:20:34,650 --> 00:20:37,111 It needs to be fresh and in an open concept 444 00:20:37,111 --> 00:20:39,321 so people can actually see it being prepared. 445 00:20:39,321 --> 00:20:41,657 He wants them to know that they can trust the ingredients 446 00:20:41,657 --> 00:20:42,783 going into their meal. 447 00:20:44,201 --> 00:20:45,828 - [Narrator] The only problem, 448 00:20:45,828 --> 00:20:47,705 is being able to serve it fast enough. 449 00:20:47,705 --> 00:20:50,958 In fine dining, he's learned that great food takes time, 450 00:20:50,958 --> 00:20:53,711 but time also limits the amount of people you can serve. 451 00:20:55,212 --> 00:20:56,714 And if he's gonna get anywhere close 452 00:20:56,714 --> 00:20:59,091 to getting enough money to fund his dream restaurant, 453 00:20:59,091 --> 00:21:01,302 this burrito shop needs to move faster. 454 00:21:03,262 --> 00:21:05,014 - Who doesn't want fresh food? 455 00:21:06,348 --> 00:21:09,477 But fresh and fast, that's a little difficult. 456 00:21:09,477 --> 00:21:11,604 In a burrito, you're dealing with upwards 457 00:21:11,604 --> 00:21:14,148 of a dozen different processes 458 00:21:14,148 --> 00:21:18,402 to try to do fresh and fast isn't just revolutionary, 459 00:21:18,402 --> 00:21:19,653 it's unheard of. 460 00:21:22,948 --> 00:21:25,618 And it may very well be impossible. 461 00:21:29,538 --> 00:21:32,458 - [Narrator] But then Ells has an unorthodox idea 462 00:21:35,044 --> 00:21:38,756 that will save time and showcase fresh ingredients. 463 00:21:44,053 --> 00:21:46,514 - [Erin] Ells rethinks how the restaurant is configured, 464 00:21:46,514 --> 00:21:48,849 so instead of having the kitchen behind the counter, 465 00:21:48,849 --> 00:21:51,018 it's right where the customers are. 466 00:21:51,018 --> 00:21:53,771 - The whole idea is to allow people to point 467 00:21:53,771 --> 00:21:55,439 to the things they want 468 00:21:55,439 --> 00:21:58,818 and to build the burrito in front of them. 469 00:21:58,818 --> 00:22:01,070 The conveyor belt starts with the tortilla 470 00:22:01,070 --> 00:22:03,656 and you add your rice and your beans. 471 00:22:03,656 --> 00:22:08,077 Then, you can choose steak or chicken or carnitas, 472 00:22:08,077 --> 00:22:09,787 you can make it vegetarian. 473 00:22:09,787 --> 00:22:12,581 And then you suddenly have the burrito 474 00:22:12,581 --> 00:22:16,001 that was made for you quick and efficiently 475 00:22:16,001 --> 00:22:18,462 at the end of the assembly line. 476 00:22:18,462 --> 00:22:21,465 - [Erin] It combines the speed of fast food 477 00:22:21,465 --> 00:22:23,717 with the elevated taste and ingredients 478 00:22:23,717 --> 00:22:27,596 you'd be more likely to see at a regular restaurant. 479 00:22:28,722 --> 00:22:31,225 - [Vallery] It's something that we see all of the time now, 480 00:22:31,225 --> 00:22:33,936 but when he did this, it was really novel. 481 00:22:38,357 --> 00:22:40,860 - [Narrator] With his unique restaurant system in place, 482 00:22:40,860 --> 00:22:43,654 Ells decides to give his sauces and marinades 483 00:22:43,654 --> 00:22:45,698 an equally original kick. 484 00:22:49,785 --> 00:22:52,746 - [Adam] And he comes upon a ripe red jalapeno 485 00:22:52,746 --> 00:22:54,206 that has been smoked. 486 00:22:55,207 --> 00:22:57,376 He loves the flavor so much, 487 00:22:57,376 --> 00:23:00,170 he names his restaurant after the pepper, 488 00:23:00,170 --> 00:23:05,134 that is known conventionally in Mexican cuisine as Chipotle. 489 00:23:06,510 --> 00:23:08,220 - [Narrator] But while he's found a name, 490 00:23:08,220 --> 00:23:12,057 there's no guarantee anyone will give Chipotle a shot. 491 00:23:12,057 --> 00:23:15,019 - [Vallery] This was a really unusual business concept 492 00:23:15,019 --> 00:23:16,937 and people might not have even known 493 00:23:16,937 --> 00:23:18,731 how to pronounce the word Chipotle, 494 00:23:18,731 --> 00:23:20,649 but it certainly didn't stop him. 495 00:23:20,649 --> 00:23:21,901 - [Narrator] As Ells prepares 496 00:23:21,901 --> 00:23:24,153 to open an untested restaurant concept, 497 00:23:26,572 --> 00:23:29,617 growth at Taco Bell has stalled. 498 00:23:29,617 --> 00:23:30,993 - [Adam C.] After many strong years, 499 00:23:30,993 --> 00:23:33,120 Taco Bell eventually runs out of road 500 00:23:33,120 --> 00:23:34,872 on its value proposition. 501 00:23:34,872 --> 00:23:37,666 - [Jason] It had been adopted and copied by so many people 502 00:23:37,666 --> 00:23:39,710 that it wasn't a differentiator anymore. 503 00:23:39,710 --> 00:23:41,045 - [Adam] Taco Bell is struggling. 504 00:23:41,045 --> 00:23:42,296 They've had three years 505 00:23:42,296 --> 00:23:45,090 where they have wildly underperformed 506 00:23:45,090 --> 00:23:49,219 and have slid out of the top five fast food restaurants. 507 00:23:50,554 --> 00:23:53,474 - [Adam C.] And so Taco Bell moves on from its longtime CEO, 508 00:23:53,474 --> 00:23:56,393 John Martin, and decides to appoint somebody new. 509 00:23:57,686 --> 00:23:59,146 - [Narrator] To right the ship, 510 00:23:59,146 --> 00:24:01,774 the board looks to their chief marketing officer, 511 00:24:01,774 --> 00:24:03,525 Peter Waller. 512 00:24:03,525 --> 00:24:05,778 - Peter Waller assumes the role of CEO 513 00:24:05,778 --> 00:24:07,071 and he has a new idea 514 00:24:07,071 --> 00:24:09,448 for how to get Taco Bell's groove back. 515 00:24:09,448 --> 00:24:11,825 - In this business, image is everything. 516 00:24:12,952 --> 00:24:15,204 - Taco Bell has sort of got a reputation 517 00:24:15,204 --> 00:24:16,413 for being a little cheap, 518 00:24:16,413 --> 00:24:18,415 sort of lost that fun, interesting image 519 00:24:18,415 --> 00:24:19,458 when it was new, right? 520 00:24:19,458 --> 00:24:21,001 It felt new. 521 00:24:21,001 --> 00:24:23,921 So Peter Waller decides to create the really aggressive, 522 00:24:23,921 --> 00:24:26,090 really expensive ad campaign. 523 00:24:26,090 --> 00:24:29,009 - They use $500 million, 524 00:24:29,009 --> 00:24:31,762 which is an exorbitant amount of money. 525 00:24:31,762 --> 00:24:33,764 - Does he go to a professional athlete? 526 00:24:33,764 --> 00:24:36,684 Does he go to the biggest rock star in the land? 527 00:24:36,684 --> 00:24:39,812 Does he go to a politician or a luminary? 528 00:24:39,812 --> 00:24:44,108 - He's hip, he's edgy, and he's testing off the charts 529 00:24:44,108 --> 00:24:45,651 with the younger demographic. 530 00:24:47,653 --> 00:24:50,406 - Nope, he goes to a chihuahua. 531 00:24:50,406 --> 00:24:53,492 A chihuahua who likes Mexican food. 532 00:24:58,080 --> 00:24:59,289 - [Narrator] It's opening week 533 00:24:59,707 --> 00:25:03,002 at Steve Ells experimental burrito shop called Chipotle. 534 00:25:04,336 --> 00:25:07,840 - Opening day was, as it is with many restaurants, 535 00:25:07,840 --> 00:25:09,550 very, very rough. 536 00:25:09,550 --> 00:25:10,968 People are running around 537 00:25:10,968 --> 00:25:12,803 like chickens with their heads cut off. 538 00:25:12,803 --> 00:25:14,888 He's trying to do everything. 539 00:25:14,888 --> 00:25:16,974 He's trying to cook, he's trying to serve, 540 00:25:16,974 --> 00:25:19,184 and the soda machine's gone crazy. 541 00:25:19,184 --> 00:25:22,438 Sometimes it spits out coke and sometimes. 542 00:25:22,438 --> 00:25:23,814 - [Steve] Come on! 543 00:25:23,814 --> 00:25:26,275 - It spits out absolutely nothing. 544 00:25:26,275 --> 00:25:30,946 However, once Ells and his staff found their rhythm, 545 00:25:30,946 --> 00:25:33,115 things really began to flow. 546 00:25:34,533 --> 00:25:36,660 - [Erin] Customers love it because they can come in, 547 00:25:36,660 --> 00:25:38,078 they can customize it, 548 00:25:38,078 --> 00:25:39,663 they can have pretty much whatever they want. 549 00:25:39,663 --> 00:25:41,248 They can get it quickly. 550 00:25:41,248 --> 00:25:43,625 - [Chirag] Chipotle's new system is not as fast as 551 00:25:43,625 --> 00:25:45,878 McDonald's, but customers are still willing to give it time 552 00:25:45,878 --> 00:25:48,338 because I can actually see it being made in front of me, 553 00:25:48,338 --> 00:25:49,590 not to mention people realize 554 00:25:49,590 --> 00:25:52,384 that a Chipotle burrito is worth the wait. 555 00:25:52,384 --> 00:25:53,802 - [Narrator] And Chipotle's proximity 556 00:25:53,802 --> 00:25:55,387 to the University of Denver 557 00:25:55,387 --> 00:25:58,390 leads to a steady stream of customers. 558 00:25:58,390 --> 00:26:00,851 - When you're in college, you're still growing. 559 00:26:00,851 --> 00:26:02,811 You're pretty much hungry all the time, 560 00:26:02,811 --> 00:26:04,354 and you just want food. 561 00:26:04,354 --> 00:26:06,607 - [Adam] After only one month of being open, 562 00:26:06,607 --> 00:26:10,235 Chipotle was selling over 1000 burritos a day. 563 00:26:10,235 --> 00:26:11,695 - [Vallery] It just took off. 564 00:26:11,695 --> 00:26:13,530 People raved about it. 565 00:26:13,530 --> 00:26:15,074 This was word of mouth 566 00:26:15,074 --> 00:26:18,118 that caused this business to just explode. 567 00:26:18,118 --> 00:26:19,745 - [Narrator] Over the next three years, 568 00:26:19,745 --> 00:26:23,415 Ells opens seven more Chipotle locations in Denver, 569 00:26:23,415 --> 00:26:25,667 and by the end of 1996, 570 00:26:25,667 --> 00:26:29,588 each brings in $1 million in annual sales. 571 00:26:30,964 --> 00:26:34,134 With Chipotle outperforming his wildest expectations, 572 00:26:34,134 --> 00:26:36,929 Ells finds himself at a crossroads. 573 00:26:36,929 --> 00:26:40,015 - [Adam] Initially, Steve Ells conceived of Chipotle 574 00:26:40,015 --> 00:26:43,352 as a way to bankroll his fine dining concept, 575 00:26:43,352 --> 00:26:45,729 but with its growing success, 576 00:26:45,729 --> 00:26:49,441 he realizes Chipotle might be the play. 577 00:26:49,441 --> 00:26:54,571 - [Narrator] Meanwhile, in 1997, Taco Bell makes a bold rebrand 578 00:26:55,781 --> 00:26:57,574 led by an attention grabbing new mascot. 579 00:27:00,077 --> 00:27:02,496 - This tagline became viral 580 00:27:02,496 --> 00:27:05,582 before the term viral even existed. 581 00:27:05,582 --> 00:27:07,042 - It was everywhere. 582 00:27:07,042 --> 00:27:11,255 It infected the culture like a virus, man. 583 00:27:11,255 --> 00:27:13,882 That dog taught a nation Spanish. 584 00:27:13,882 --> 00:27:17,386 Everybody was "yo quieroing" after that. 585 00:27:18,220 --> 00:27:19,763 - [Bill] t can't be overstated 586 00:27:19,763 --> 00:27:24,101 how ubiquitous this campaign was in this era. 587 00:27:24,101 --> 00:27:25,561 It was on every late night talk show, 588 00:27:25,561 --> 00:27:26,895 it was on everybody's T-shirt, 589 00:27:26,895 --> 00:27:28,397 it was on everybody's bumper sticker. 590 00:27:28,397 --> 00:27:30,858 It was a national phenomenon. 591 00:27:32,359 --> 00:27:34,069 - [Narrator] But one man isn't enjoying 592 00:27:34,069 --> 00:27:38,574 Taco Bell's sudden pop status: McDonald's Fred Turner. 593 00:27:38,574 --> 00:27:40,242 - [Brooke] You have to imagine how annoyed 594 00:27:40,242 --> 00:27:42,828 Fred Turner must have been wondering how 595 00:27:42,828 --> 00:27:44,246 he let this little taco chain 596 00:27:44,246 --> 00:27:46,415 take over the national conversation. 597 00:27:46,415 --> 00:27:50,002 - [Adam] He has a very talented and very motivated competitor 598 00:27:50,002 --> 00:27:51,295 nipping at his heels, 599 00:27:51,295 --> 00:27:53,964 and he knows he has to do something about it. 600 00:27:57,885 --> 00:28:01,138 - [Narrator] Meanwhile, Steve Ells expands Chipotle 601 00:28:01,138 --> 00:28:04,099 with 16 locations throughout Denver, 602 00:28:04,099 --> 00:28:07,769 and as his annual sales hit $14 million, 603 00:28:07,769 --> 00:28:10,689 Ells decides to go all in. 604 00:28:10,689 --> 00:28:12,232 - Ells had enough money 605 00:28:12,232 --> 00:28:15,319 to go ahead and pursue his dream of fine dining 606 00:28:15,319 --> 00:28:17,863 if he wanted to, but I think he saw 607 00:28:17,863 --> 00:28:21,491 that this fast casual concept that he created 608 00:28:21,491 --> 00:28:23,410 is where it's at, 609 00:28:23,410 --> 00:28:27,331 and the it is not just money but his legacy. 610 00:28:28,707 --> 00:28:30,250 - [Narrator] But in order to maximize expansion 611 00:28:30,250 --> 00:28:34,004 beyond Denver, he needs an investor. 612 00:28:34,004 --> 00:28:37,716 - Ells spends months trying to woo different venture capital 613 00:28:37,716 --> 00:28:41,386 and investment firms, and they each turn him down. 614 00:28:41,386 --> 00:28:44,556 They see that Ells has a significant degree of success 615 00:28:44,556 --> 00:28:47,351 in Denver, but they don't believe in it 616 00:28:47,351 --> 00:28:49,728 as a nationwide concept. 617 00:28:49,728 --> 00:28:52,230 - [Narrator] But just as Ells loses hope, 618 00:28:52,230 --> 00:28:55,067 he catches the eye of a fast food chain 619 00:28:55,067 --> 00:28:58,028 poised to take the burrito national. 620 00:28:58,028 --> 00:29:01,406 - [Adam] They are a fast food juggernaut 621 00:29:01,406 --> 00:29:03,909 known from coast to coast, 622 00:29:03,909 --> 00:29:07,371 a chain that has knowledge of the food space, 623 00:29:07,371 --> 00:29:09,915 a chain that has loads of capital 624 00:29:09,915 --> 00:29:11,917 to put into the expansion. 625 00:29:12,250 --> 00:29:13,335 - Hi. 626 00:29:13,335 --> 00:29:15,212 - We're looking for Steve Ells. 627 00:29:22,010 --> 00:29:24,888 - [Narrator] In 1998, after months of pursuing investors 628 00:29:24,888 --> 00:29:27,891 for Chipotle, Steve Ells finds interest 629 00:29:27,891 --> 00:29:31,395 from an unlikely partner: McDonald's. 630 00:29:32,604 --> 00:29:35,565 - [Adam C.] McDonald's sees as Taco Bell is growing, 631 00:29:35,565 --> 00:29:40,153 a need to address the growing market for Mexican style food. 632 00:29:40,153 --> 00:29:42,906 - Gentlemen, thanks for coming. 633 00:29:42,906 --> 00:29:44,282 Let me give you a tour. 634 00:29:44,282 --> 00:29:46,076 - [Brooke] Rather than only have McDonald's 635 00:29:46,076 --> 00:29:48,203 fight head to head with Taco Bell for customers, 636 00:29:48,203 --> 00:29:51,039 Fred decides to hit Taco Bell from a different angle. 637 00:29:52,374 --> 00:29:53,792 - This is the assembly line. 638 00:29:53,792 --> 00:29:55,961 Everything is made here fresh on site. 639 00:29:55,961 --> 00:29:58,255 - [Adam C.] And they see the opportunity 640 00:29:58,255 --> 00:30:01,633 in the guise of Chipotle and the burrito. 641 00:30:02,884 --> 00:30:04,761 - [Narrator] In February 1998, 642 00:30:04,761 --> 00:30:08,682 McDonald's buys a 20% stake in Chipotle 643 00:30:08,682 --> 00:30:11,309 with an initial $50 million gamble 644 00:30:11,309 --> 00:30:13,603 on Chipotle's national expansion. 645 00:30:13,603 --> 00:30:15,897 - That is pretty wild when you think about it. 646 00:30:15,897 --> 00:30:17,649 You really don't put those two brands 647 00:30:17,649 --> 00:30:19,776 or types of food together in your head. 648 00:30:19,776 --> 00:30:21,695 - This was the first time McDonald's 649 00:30:21,695 --> 00:30:25,407 had made a direct investment in another restaurant. 650 00:30:25,407 --> 00:30:26,783 - [Bobby] I mean, it's one thing 651 00:30:26,783 --> 00:30:28,827 to try a different type of chicken sandwich 652 00:30:28,827 --> 00:30:29,828 at your restaurant, 653 00:30:29,828 --> 00:30:32,247 but this is really responding 654 00:30:32,247 --> 00:30:34,833 to the changing American palate. 655 00:30:34,833 --> 00:30:36,418 - [Natalia] By the late 1990s, 656 00:30:36,418 --> 00:30:39,296 America's beliefs about their food are changing. 657 00:30:39,296 --> 00:30:41,381 They are worried about processed foods 658 00:30:41,381 --> 00:30:44,134 and also where their food is coming from. 659 00:30:44,134 --> 00:30:45,719 - [Erin] Sure, McDonald's could have started 660 00:30:45,719 --> 00:30:47,137 its own Mexican food restaurant, 661 00:30:47,137 --> 00:30:48,680 but that kind of thing takes time 662 00:30:48,680 --> 00:30:51,391 and they wanna be in this space right away. 663 00:30:51,391 --> 00:30:53,477 Plus, Chipotle already has it figured out, 664 00:30:53,477 --> 00:30:57,189 so all McDonald's has to do is take that and run with it. 665 00:30:57,189 --> 00:30:58,523 - With the help of McDonald's, 666 00:30:58,523 --> 00:31:00,484 they start expanding outside of Colorado: 667 00:31:00,484 --> 00:31:05,405 Kansas City, Chicago, Cleveland, Columbus, and then beyond. 668 00:31:06,615 --> 00:31:09,659 - [Brooke] McDonald's had the geographical know-how 669 00:31:09,659 --> 00:31:11,203 of the whole country, 670 00:31:11,203 --> 00:31:13,997 so they were able to help Ells strategize 671 00:31:13,997 --> 00:31:17,375 to pinpoint exactly where to open the next restaurant. 672 00:31:17,375 --> 00:31:20,670 - [Narrator] By 1999, Chipotle's restaurant count 673 00:31:20,670 --> 00:31:22,047 more than doubles 674 00:31:22,047 --> 00:31:25,717 with locations from Washington DC to Dallas, 675 00:31:25,717 --> 00:31:29,387 and annual revenue nearly triples to $30 million. 676 00:31:31,723 --> 00:31:36,520 Meanwhile, at Taco Bell, an executive shakeup is underway. 677 00:31:36,520 --> 00:31:39,648 - Despite all the popularity of "Yo quiero Taco Bell" 678 00:31:39,648 --> 00:31:43,360 as a cultural force, it didn't actually increase sales. 679 00:31:43,360 --> 00:31:46,279 In fact, sales have slipped by 6%. 680 00:31:46,279 --> 00:31:48,490 - [Erin] Suddenly Taco Bell, which until now 681 00:31:48,490 --> 00:31:51,368 has been the biggest name in Mexican fast food, 682 00:31:51,368 --> 00:31:53,662 finds itself without a clear vision, 683 00:31:53,662 --> 00:31:57,040 just when competitors like Chipotle are on the rise. 684 00:31:57,040 --> 00:31:58,542 - [Narrator] The board recruits a leader 685 00:31:58,542 --> 00:32:01,920 known for turning around a rival fast food chain. 686 00:32:01,920 --> 00:32:04,131 His name is Emil Brolick. 687 00:32:04,131 --> 00:32:06,842 - [Adam] Brolick brought with him a tremendous pedigree. 688 00:32:06,842 --> 00:32:09,511 He's the guy who brought Wendy's 689 00:32:09,511 --> 00:32:11,555 to new heights in fast food. 690 00:32:11,555 --> 00:32:13,515 - [Adam C.] And so he arrives with the determination 691 00:32:13,515 --> 00:32:15,100 to make Taco Bell stand out 692 00:32:15,100 --> 00:32:18,436 in an increasingly competitive marketplace. 693 00:32:18,436 --> 00:32:20,647 - When you think of these brands, 694 00:32:20,647 --> 00:32:22,899 what signature menu items come to mind? 695 00:32:24,401 --> 00:32:27,779 For Burger King, it's the Whopper. 696 00:32:29,281 --> 00:32:31,950 For McDonald's, it's the Big Mac. 697 00:32:36,163 --> 00:32:40,041 At Taco Bell, we don't have one. 698 00:32:40,041 --> 00:32:42,836 - [Bobby] When you think of the Big Mac, 699 00:32:42,836 --> 00:32:44,421 you think of McDonald's. 700 00:32:44,421 --> 00:32:46,214 But if you say, "I'm gonna go get a taco," to your buddy, 701 00:32:46,214 --> 00:32:48,800 they have no idea where you're going. 702 00:32:48,800 --> 00:32:51,261 - [Jason] After 40 years in business, 703 00:32:51,261 --> 00:32:54,306 they decide maybe it's time for Taco Bell 704 00:32:54,306 --> 00:32:57,142 to finally have their Big Mac. 705 00:33:00,353 --> 00:33:01,855 - [Narrator] Brolick challenges his team 706 00:33:01,855 --> 00:33:05,400 to develop something to help make Taco Bell number one 707 00:33:05,400 --> 00:33:09,863 in fast food and one product developer named Lois Carson, 708 00:33:09,863 --> 00:33:12,365 believes she already has it. 709 00:33:12,365 --> 00:33:13,909 - What do you have for me? 710 00:33:15,285 --> 00:33:18,997 - It's basically a taco stuffed inside a burrito. 711 00:33:20,081 --> 00:33:23,043 You take your standard taco ingredients 712 00:33:23,043 --> 00:33:28,048 and then you wrap it all in a large soft flour tortilla. 713 00:33:29,549 --> 00:33:33,845 - For years, Lois Carson had been work shopping a new idea, 714 00:33:33,845 --> 00:33:36,473 and she figured this might be the perfect item 715 00:33:36,473 --> 00:33:38,558 to roll out at the perfect time 716 00:33:38,558 --> 00:33:40,060 in front of the perfect person. 717 00:33:46,399 --> 00:33:49,194 - How are you supposed to eat this thing? 718 00:33:49,194 --> 00:33:50,195 - Like a burrito. 719 00:33:51,404 --> 00:33:54,574 - We need a product that people can eat with one hand 720 00:33:54,574 --> 00:33:56,326 while they drive. 721 00:33:56,326 --> 00:34:01,331 - 70% of all sales at Taco Bell came from the drive-thru, 722 00:34:01,331 --> 00:34:04,709 which means this thing that Lois has brought forth 723 00:34:04,709 --> 00:34:06,962 that disintegrates all over your lap 724 00:34:06,962 --> 00:34:09,630 is clearly not going to work. 725 00:34:10,674 --> 00:34:12,842 - This ain't getting it done. 726 00:34:14,261 --> 00:34:16,554 - [Narrator] But while Brolick rejects Carson's prototype, 727 00:34:16,554 --> 00:34:18,889 she's determined to see it through. 728 00:34:18,889 --> 00:34:21,226 - [Adam] She's convinced this will be the thing 729 00:34:21,226 --> 00:34:22,686 that puts Taco Bell 730 00:34:22,686 --> 00:34:25,063 back into the consciousness of hungry Americans. 731 00:34:27,357 --> 00:34:30,694 - [Narrator] By 2004, McDonald's has grown Chipotle 732 00:34:30,694 --> 00:34:34,072 across the country with 400 locations 733 00:34:34,072 --> 00:34:38,118 increasing its investment by $300 million. 734 00:34:38,118 --> 00:34:41,830 - Here at McDonald's, we've taken the concept of Chipotle 735 00:34:41,830 --> 00:34:44,373 and turned it into a nationwide success. 736 00:34:44,373 --> 00:34:46,918 Next, we want to transform it 737 00:34:46,918 --> 00:34:48,837 and turn it into an international phenomenon, 738 00:34:48,837 --> 00:34:52,841 by adding centralized production plants, drive-thru windows. 739 00:34:52,841 --> 00:34:54,592 - They wanted to make it more efficient, 740 00:34:54,592 --> 00:34:56,553 they wanted to make it more profitable. 741 00:34:56,553 --> 00:34:59,723 - This is Chipotle 2.0. 742 00:35:00,849 --> 00:35:04,394 - McDonald's wanted to McDonaldize Chipotle. 743 00:35:05,645 --> 00:35:07,856 - [Jason] It happens in almost every business imaginable. 744 00:35:07,856 --> 00:35:09,357 When the big people come in, 745 00:35:09,357 --> 00:35:11,067 they buy the little person for what they do, 746 00:35:11,067 --> 00:35:13,945 and then all those new innovations and new processes 747 00:35:13,945 --> 00:35:16,406 get brought into this huge infrastructure, 748 00:35:16,406 --> 00:35:18,700 and they almost inevitably 749 00:35:18,700 --> 00:35:21,119 ruin the thing that they wanted to buy them for 750 00:35:21,119 --> 00:35:22,454 to begin with. 751 00:35:22,454 --> 00:35:25,707 - Chipotle is not just another fast food chain. 752 00:35:25,707 --> 00:35:27,751 We're not Taco Bell. 753 00:35:27,751 --> 00:35:30,253 - McDonald's was really altering the core 754 00:35:30,253 --> 00:35:33,340 of what Ells thought Chipotle was, 755 00:35:33,340 --> 00:35:35,133 but it wasn't really his anymore. 756 00:35:36,259 --> 00:35:39,929 McDonald's had invested $360 million in Chipotle 757 00:35:39,929 --> 00:35:42,432 and they had a 90% stake. 758 00:35:42,432 --> 00:35:45,518 - [Bobby] It's been a successful partnership for both sides, 759 00:35:45,518 --> 00:35:49,606 but at the end of the day, McDonald's wants to cut costs. 760 00:35:49,606 --> 00:35:53,443 - [Adam] Steve Ells has to tow the line and follow McDonald's 761 00:35:53,443 --> 00:35:55,362 or split from them entirely. 762 00:36:01,701 --> 00:36:03,578 - [Narrator] At Taco Bell, it's been months 763 00:36:03,578 --> 00:36:06,331 since President Emil Brolick tasked his team 764 00:36:06,331 --> 00:36:08,750 with creating a new signature item. 765 00:36:10,043 --> 00:36:14,547 - They need to make a delicious, unique signature item, 766 00:36:14,547 --> 00:36:17,342 something that people will forever associate 767 00:36:17,342 --> 00:36:18,259 with the brand. 768 00:36:18,259 --> 00:36:19,386 And at this point, 769 00:36:19,386 --> 00:36:21,054 Brolick has all but given up 770 00:36:21,054 --> 00:36:23,890 on the development team's food ideas. 771 00:36:23,890 --> 00:36:25,684 - [Narrator] But one person on his team 772 00:36:25,684 --> 00:36:27,727 isn't willing to give up. 773 00:36:27,727 --> 00:36:29,771 - [Brooke] Lois Carson creates this jam 774 00:36:29,771 --> 00:36:31,439 packed burrito taco hybrid 775 00:36:31,439 --> 00:36:33,983 that just looks like nothing else on the market. 776 00:36:33,983 --> 00:36:36,444 But the problem is that it's not easy to eat, 777 00:36:36,444 --> 00:36:39,239 which is one of the essential qualities of fast food, 778 00:36:39,239 --> 00:36:41,157 particularly for drive-thru customers. 779 00:36:45,620 --> 00:36:47,872 - [Adam] And then suddenly she has an idea. 780 00:36:50,125 --> 00:36:54,713 What if I take this and I construct it in such a way 781 00:36:54,713 --> 00:36:57,090 that the ingredients can't fall out? 782 00:36:58,466 --> 00:37:00,719 She experiments with a larger tortilla 783 00:37:00,719 --> 00:37:03,805 and folding it into a hexagonal shape. 784 00:37:03,805 --> 00:37:08,101 She then grills it so that the folds stay in place 785 00:37:08,101 --> 00:37:12,605 and the outer tortilla holds all the ingredients inside. 786 00:37:14,274 --> 00:37:19,154 - [Narrator] In 2005, Taco Bell launches Carson's creation. 787 00:37:19,154 --> 00:37:22,991 - They think it's gonna hit people smack across the face 788 00:37:22,991 --> 00:37:25,368 and become the Taco Bell Big Mac. 789 00:37:25,368 --> 00:37:28,329 It's the Crunch Wrap Supreme. 790 00:37:28,329 --> 00:37:30,123 - [Narrator] Taco Bell sells a whopping 791 00:37:30,123 --> 00:37:33,376 51 million Crunch Wrap Supremes 792 00:37:33,376 --> 00:37:36,045 in the first six weeks alone. 793 00:37:36,045 --> 00:37:38,381 - That level of success is unheard of. 794 00:37:38,381 --> 00:37:40,675 That was more than McDonald's sold in Big Macs 795 00:37:40,675 --> 00:37:42,260 over the same period of time. 796 00:37:42,260 --> 00:37:46,890 - [Adam] It is soft, it is crunchy, 797 00:37:46,890 --> 00:37:48,850 it is handheld perfection. It's not authentic Mexican. 798 00:37:48,850 --> 00:37:50,268 It's Taco Bell. 799 00:37:50,268 --> 00:37:52,228 - What the Crunch Wrap Supreme ultimately does 800 00:37:52,228 --> 00:37:56,733 is create a brand new energy around Taco Bell. 801 00:37:56,733 --> 00:37:59,319 - [Narrator] Elevated by the Crunch Wrap Supreme, 802 00:37:59,319 --> 00:38:03,198 in 2006, Taco Bell surpasses Burger King 803 00:38:03,198 --> 00:38:06,993 to become the number two fast food chain in America. 804 00:38:06,993 --> 00:38:09,120 - This is a huge upset. 805 00:38:09,120 --> 00:38:11,039 Taco Bell has gone from this underdog 806 00:38:11,039 --> 00:38:13,333 to an American fast food icon. 807 00:38:16,127 --> 00:38:17,712 - [Narrator] And Taco Bell's success 808 00:38:17,712 --> 00:38:21,341 with a creative menu edition is a blow to Fred Turner, 809 00:38:21,341 --> 00:38:25,845 who's bet big on a single Mexican dish: the burrito. 810 00:38:25,845 --> 00:38:27,263 - After trying to use Chipotle 811 00:38:27,263 --> 00:38:30,225 to take down Taco Bell in the Mexican food category, 812 00:38:30,225 --> 00:38:34,312 Fred sees that Taco Bell is growing stronger regardless, 813 00:38:34,312 --> 00:38:36,648 and they're getting way too close to McDonald's 814 00:38:36,648 --> 00:38:38,441 for his comfort. 815 00:38:39,192 --> 00:38:41,945 - Steve, take a seat. 816 00:38:41,945 --> 00:38:43,780 - But Fred's not gonna let Taco Bell 817 00:38:43,780 --> 00:38:45,573 knock McDonald's from the number one spot, 818 00:38:45,573 --> 00:38:47,617 and he realizes his strategy is just, 819 00:38:47,617 --> 00:38:49,786 it's not the best that McDonald's can do. 820 00:38:56,376 --> 00:38:57,627 - I'll get right to it. 821 00:38:58,962 --> 00:39:02,006 I'm proud of what we've been able to accomplish together, 822 00:39:02,006 --> 00:39:05,969 but McDonald's will be parting ways with Chipotle. 823 00:39:08,012 --> 00:39:10,139 - [Brooke] He decides that instead of competing 824 00:39:10,139 --> 00:39:12,642 for Taco Bell's market share with Chipotle 825 00:39:12,642 --> 00:39:14,602 or any other Mexican food at all, 826 00:39:14,602 --> 00:39:16,896 they need to stop thinking about categories altogether 827 00:39:16,896 --> 00:39:18,481 and just look at Taco Bell 828 00:39:18,481 --> 00:39:20,483 like another competing fast food chain. 829 00:39:22,235 --> 00:39:25,154 - I wish you and your team the best of luck. 830 00:39:25,154 --> 00:39:27,198 - [Narrator] In August of 2006, 831 00:39:27,198 --> 00:39:30,410 McDonald's cashes in its stake in Chipotle 832 00:39:30,410 --> 00:39:32,453 for $1.5 billion. 833 00:39:33,746 --> 00:39:35,790 - McDonald's is putting more money in their pockets, 834 00:39:35,790 --> 00:39:38,209 which is gonna create even more opportunity 835 00:39:38,209 --> 00:39:40,545 for the biggest fast food organization 836 00:39:40,545 --> 00:39:42,338 in the United States. 837 00:39:44,048 --> 00:39:45,550 - [Narrator] And it puts Steve Ells 838 00:39:45,550 --> 00:39:47,886 back in the driver's seat of Chipotle. 839 00:39:47,886 --> 00:39:49,387 - [Brooke] When McDonald's divest, 840 00:39:49,387 --> 00:39:52,181 Ells walks away with everything he needs. 841 00:39:52,181 --> 00:39:53,766 He's free from corporate oversight 842 00:39:53,766 --> 00:39:56,352 steering him in a direction that he doesn't agree with. 843 00:39:56,352 --> 00:39:59,480 He's also armed with the capital to expand Chipotle 844 00:39:59,480 --> 00:40:01,232 exactly the way that he sees fit. 845 00:40:04,736 --> 00:40:06,321 - [Narrator] Over the next decade, 846 00:40:06,321 --> 00:40:10,992 Ells grows Chipotle from 500 to 2,500 restaurants 847 00:40:10,992 --> 00:40:14,913 and increases sales by over 200%. 848 00:40:14,913 --> 00:40:19,459 Steve Ells leaves Chipotle in 2020, but his legacy remains 849 00:40:19,459 --> 00:40:22,462 in the new restaurant model he spearheaded 850 00:40:22,462 --> 00:40:24,297 and Chipotle still leads 851 00:40:24,297 --> 00:40:28,301 the $200 billion fast casual market. 852 00:40:28,301 --> 00:40:31,095 - Fast casual kind of raised the bar. 853 00:40:31,095 --> 00:40:33,681 - Chipotle brought out the consumer demand 854 00:40:33,681 --> 00:40:37,310 for customization and onsite cooking and visibility 855 00:40:37,310 --> 00:40:39,187 that previously hadn't really existed 856 00:40:39,187 --> 00:40:40,438 in fast food before that. 857 00:40:41,856 --> 00:40:44,692 - [Narrator] Meanwhile, Taco Bell continues with its focus 858 00:40:44,692 --> 00:40:46,611 on competitive deals and 859 00:40:46,611 --> 00:40:49,030 non-traditional Mexican creations 860 00:40:49,030 --> 00:40:52,325 that appeal to trend following customers. 861 00:40:52,325 --> 00:40:53,618 - [Bill] It's known as a place 862 00:40:53,618 --> 00:40:55,453 where there's some new crazy item every six weeks: 863 00:40:55,453 --> 00:40:58,039 the Baja Blast Cheesecake, for example. 864 00:40:58,039 --> 00:41:00,333 - [Kevin] Nowadays, when you go into a Taco Bell, 865 00:41:00,333 --> 00:41:02,877 they're like, "We got Doritos shells, man!" 866 00:41:02,877 --> 00:41:05,546 Like, you know, there's a lot of collabs going on. 867 00:41:05,546 --> 00:41:07,298 - [Narrator] Today, Taco Bell's sales 868 00:41:07,298 --> 00:41:10,259 exceed $15 billion a year, 869 00:41:10,259 --> 00:41:13,554 making it the third most successful fast food chain 870 00:41:13,554 --> 00:41:16,099 after McDonald's and Chick-fil-A. 871 00:41:16,099 --> 00:41:17,850 - One fascinating part of the rise 872 00:41:17,850 --> 00:41:19,352 of both Taco Bell and Chipotle 873 00:41:19,352 --> 00:41:22,397 is that they are Mexican inspired chains 874 00:41:22,397 --> 00:41:25,066 that ultimately remade the fast food industry. 875 00:41:25,066 --> 00:41:26,859 - [Narrator] Rather than try to beat Taco Bell 876 00:41:26,859 --> 00:41:29,570 and Chipotle in each of their categories, 877 00:41:29,570 --> 00:41:32,240 McDonald's moves into the 21st century 878 00:41:32,240 --> 00:41:35,910 embracing the evolution of the fast food experience. 879 00:41:35,910 --> 00:41:38,162 - [Jason] McDonald's gets credit for a lot of innovations, 880 00:41:38,162 --> 00:41:41,082 but things like the dollar menu and free refills, 881 00:41:41,082 --> 00:41:43,751 those were innovations that came from Taco Bell. 882 00:41:43,751 --> 00:41:45,712 - When you go into a McDonald's today, 883 00:41:45,712 --> 00:41:48,172 you can literally make your own food item 884 00:41:48,172 --> 00:41:49,966 very much in the Chipotle mode. 885 00:41:50,842 --> 00:41:52,218 - [Narrator] And by perfecting 886 00:41:52,218 --> 00:41:54,762 how to add new menu items strategically, 887 00:41:54,762 --> 00:41:56,931 McDonald's continues to grow 888 00:41:56,931 --> 00:42:00,977 into a behemoth worth over $200 billion 889 00:42:00,977 --> 00:42:04,939 without ever relinquishing the number one spot. 890 00:42:04,939 --> 00:42:07,275 - [Adam] McDonald's is not going anywhere, 891 00:42:07,275 --> 00:42:09,610 but there's kind of this wonderfully symbiotic 892 00:42:09,610 --> 00:42:12,113 relationship between all of these brands. 893 00:42:12,113 --> 00:42:15,241 Without McDonald's, there could be no Chipotle, 894 00:42:15,241 --> 00:42:17,660 without Taco Bell, there could be no Chipotle, 895 00:42:17,660 --> 00:42:21,831 and that's why fast food will always be part of our lives.