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Yum! Brands, Inc. (YUM), McDonald’s Corporation (MCD): Taco Bell’s Brilliant PR Shines Brighter Than the Rest

In an unexpected turn of events, Yum! Brands, Inc. (NYSE:YUM)’s Taco Bell chain has accomplished an extremely impressive image rehabilitation. Though far from its more refined competitor Chipotle Mexican Grill, Inc. (NYSE:CMG), Taco Bell has spruced up its menu substantially, conducted a massive PR effort involving a popular chef, and just now has pulled kids’ meal items from the menu — the first of its kind to take such a drastic move in the name of controlling childhood obesity. The move will have a meaningless impact on sales, but more importantly, it publicly addresses the obesity crisis in the U.S. and takes tangible maneuvers in decreasing its contribution to said crisis. A costless endeavor, abolishing the kids’ meal will create tremendous goodwill among a new population of health conscious Americans.

Healthy tacos? Not exactly.

McDonald's Corporation (NYSE:MCD)It’s not that Taco Bell is even remotely healthy, though the company has made an effort to offer lower calorie, lower-fat items, similar to competitors such as McDonald’s Corporation (NYSE:MCD) and The Wendy’s Company (NASDAQ:WEN). And, in the future, it’s unlikely we will see a Taco Bell menu full of locally sourced, healthy fare that you would be proud to instagram with the hash tag #fitlife. But none of that is the point in this; the point is that Taco Bell has taken a tremendous step in the right direction by simply removing its products that are specifically designed to entice children.

Long has been the strategy, especially for McDonald’s Corporation (NYSE:MCD), of developing a deep-seeded, nearly addictive relationship with children via plastic, hopefully non-chokable toys, that go along with the delicious and greasy meal of a burger and fries. Studies have shown that kids are conditioned to literally love McDonald’s Corporation (NYSE:MCD) and become lifelong customers based on these efforts. And you thought the NSA was scary.

Icing on the cake for Taco Bell’s decision to end the child mind-controlling/belly fattening strategy is that kids’ meals account for half a percent of sales. Investors should not expect any material loss from this move, and the company will only benefit from the positive public voice behind it — a rare luxury for a fast food company.

Best in show

Taco Bell was once the no man’s land of fast food — a salmon-colored pit of ambiguous Mexican-influenced grub. But its multi-year turnaround strategy, in retrospect, looks beautiful.

The company embraced its position as late night college food by creating fourthmeal — the concept that if you are up late enough and have altered your consciousness, you deserve an extra meal at the end of it all. From then, it introduced a Fresco menu –healthier options without fatty ingredients like sour cream and cheese. On the opposite end came the Doritos Locos Taco — its best selling product ever, and one that will continue to enhance the bottom line in the near future. Though simple in theory, marketing analysts thought it was a brilliant move for the company.

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