Taco Bell to roll out taco in Doritos shell

IRVINE, Calif. -- Taco Bell is about to rub salt — make that orange Doritos dust — into its own wounds.

It may just be the cure.

Roughly one year after the sky almost fell in on Taco Bell — amid a since-withdrawn lawsuit that falsely accused the nation's largest Mexican fast-food chain of stuffing its beef with filler — the brand is going on an offensive to turn its 50th anniversary year into one for the fast-food record books.

USA TODAY was the first media brought inside Taco Bell headquarters and into its secretive test kitchen to observe and taste the breadth of the brand's attempt at self-reinvention. Among the highlights: a slew of new products, including a Chiptole-like Cantina Bell platform; a new breakfast roll-out; a new slogan and brand campaign; and one ultra-simple but culturally cool concept that could finally revive the brand: a line of Doritos Locos Tacos with shells made entirely from — you guessed it — Doritos.

Get ready to rock, Doritos-heads. You'll soon be able to turn your tongue, fingers and hoodie strings orange by eating at Taco Bell. The national roll-out is on March 8, but the buzz has been building for months. A clock on Taco Bell's website is counting down the seconds until launch date of the product that it brags, has "Taco Bell on the inside and Doritos on the outside."

Wounded brands such as Taco Bell can take years to recover. What the 5,600-unit fast-food behemoth is about to try is almost unprecedented. It's making so many major changes at the same time that next to the wildly successful McDonald's turnaround of the past decade, this could rank as one of fast-food's most complex turnaround attempts in decades. Its likelihood of success — or failure — rests on the head of a Doritos chip.

Two commonly ridiculed "junk" foods — the Doritos chip and the Taco Bell taco — are being rolled into one. In this case, one plus one might not equal two. For Taco Bell, it may equal millions of dollars in incremental sales. The year has hardly begun, but there's already industry chatter about the Doritos-laced taco emerging as one of the nation's top new products this year.

Take it from new products guru Lynn Dornblaser. As director of innovation and insight at research firm Mintel, she sees tens of thousands of new products every year. But this new taco, she says, will be "one of the big successes of 2012." She calls the link-up of the snack food and fast-food giants targeting 18-to-34-year-olds "a marriage made in belly-busting heaven." Savvy to social media, Taco Bell is even hosting a "tweet off" to determine one town that gets the new tacos delivered ahead of the curve.

Never mind that it's taking place at a chain coming off a lousy year, when same-store sales fell 2% after the lawsuit.

"Taco Bell could have a McDonald's-like year," says David Palmer, industry analyst at UBS Investment Bank. That's the same McDonald's that's been pummeling the rest of the fast-food industry with growth throughout the economic downturn.

This would be huge about-face for the chain, whose parent, Yum Brands, also owns Pizza Hut and KFC. Taco Bell, whose sales topped $7 billion last year, sees 35 million customers walk in or drive up every week. It's the nation's sixth-largest fast-food chain, ranking just behind Wendy's in domestic sales, says research firm Technomic.