Breakfast Wars: Taco Bell Aims to Devour McDonald’s Morning Menu Empire

April 11, 2014— -- Taco Bell has launched an all-out advertising assault to promote its new Waffle Taco, in the hopes of taking a bite out of McDonald’s breakfast empire.

One ad, set to the tune of “Old Macdonald Had a Farm,” features a guy who has been eating McDonald’s Egg McMuffin since 1984. After trying Taco Bell’s new breakfast menu, he suddenly gets with the times, trimming his mullet and getting a smartphone.

Another ad shows a montage of 25 men from across the country named “Ronald McDonald” who say they “love Taco Bell’s new breakfast.”

So why aim directly at fast food breakfast goliath McDonalds? Because Americans spend $32 billion annually on fast food breakfast and McDonald’s commands one-third of the market and has been making Egg McMuffins since the 1970s.

Welcome to the Breakfast Wars.

Taco Bell has been working on its morning menu, which includes the Waffle Taco, the AM Crunch Wrap and Cinnabon Delights, for over seven years and it’s not about to flinch.

“The message is we’re here to stay in breakfast,” said Taco Bell’s chief marketing officer Chris Brandt. “The whole reason we're doing this is we just thought breakfast was really boring and so we wanted to break up the boring, shake up the routine.”

Taco Bell made sure all of its new breakfast sandwiches can be held in one hand. They even have a new coffee line too.

And McDonald’s took notice. Taco Bell’s “I’m Ronald McDonald” ad, a campaign by Oscar-winning director Errol Morris, generated so much buzz, the Golden Arches rounded up its troops and immediately fired off a response.

They posted an image on social media showing their mascot, the red and yellow Ronald McDonald clown, kneeling down to pet the Taco Bell Chihuahua with the words, “imitation is the sincerest form of flattery.” They also offered free small cups of its McCafe coffee to customers during breakfast hours for two weeks.

“McDonalds said ‘back off our territory, we're the breakfast king,’ and they started this marketing blitz,” said Hayley Peterson, a retail reporter for Business Insider. “They also put on a concert in Times Square and a flash Mob in Chicago to sort of get the buzz growing in major cities over their McCafe coffee line.”

McDonald’s gets about 20 percent of its sales from breakfast. It made $10 billion last year off their morning menu alone, dwarfing Taco Bell’s $7.6 billion in total sales for all menus combined.

But McDonald’s is fretting about the little Chihuahua because in the last few years, breakfast has become more important than ever to the fast food giant’s bottom line.

“[Breakfast is] the cheapest meal you can get outside of a snack, and consumers are still tight with money after the recession,” Peterson said.

“Traffic during the breakfast [hours] have been steadily increasing, while traffic during the lunch and dinner hours have been steadily decreasing year over year, and that's why there's this sudden interest in breakfast.”

And Taco Bell isn’t the only one duking it out in the Breakfast Wars. Just last week, Dunkin Donuts unveiled its eggs benedict sandwiches, and last month, Starbucks unveiled new breakfast items, such as the Egg and Cheddar sandwich on multi-grain toast and the new and improved Reduced-Fat Turkey Bacon Breakfast Sandwich.

“There's a definitely a huge market for, ‘I'm going to splurge today, once-a-week’ and get fast food,” Peterson said.