**Texas**: Taco Cabana tackles inflation and supply disruptions via regional sourcing, strong supplier partnerships, and strategic cost management, achieving significant savings and maintaining menu quality while supporting franchisees and local economies.
In the face of ongoing inflationary pressures and supply chain disruptions, Taco Cabana is actively employing a range of strategic measures to balance cost management and value delivery to its customers. As one of the restaurant industry’s persistent challenges, rising costs—particularly in supply chains—have demanded an adaptive and relationship-centric approach from the fast casual Mexican dining brand.
Armando Flores, Head of Supply Chain at Taco Cabana, shared insights into how the company has maintained both quality and affordability amid these challenges. Key among these efforts is strategic sourcing combined with strong and collaborative supplier partnerships. Notably, Taco Cabana has secured a 25% reduction in tequila costs through direct relationships with bottlers and has eliminated middlemen in important supply chains, achieving an additional 15% cost saving. These efforts are part of a broader initiative to provide franchisees with greater cost stability and operational confidence.
A significant challenge remains in navigating inflation without simply passing additional costs on to customers or eroding profitability. Flores explained that Taco Cabana pursues a targeted cost management strategy by identifying sectors with more favourable pricing and offsetting inflationary impacts in other areas. “This balancing act allows us to maintain menu integrity and value for guests while preserving margins,” Flores said.
Longstanding collaborative relationships with key suppliers have been central to the chain’s supply chain resilience. Flores highlighted the company’s decade-long partnership with PFG as a critical element in overcoming distribution challenges and ensuring consistent ingredient availability for franchisees. Beyond cost efficiencies, these partnerships foster innovation, enabling the introduction of unique menu items such as the Tajín Mango Dessert Pie and branded Dr Pepper beverages. The supply chain team’s collaboration with EcoLab is also helping franchisees secure Science Safe Certification, further underlining Taco Cabana’s commitment to operational excellence.
The company’s regional focus is another strategic advantage, with most of its outlets located within Texas. Taco Cabana has developed a supply chain predominantly supported by Texas-based suppliers, resulting in significantly reduced transportation costs, faster delivery timelines and a boost to the local economy. Most suppliers are located within 300 miles of the restaurants, facilitating access to high-quality ingredients at competitive prices. As the brand considers expanding beyond Texas, it intends to replicate this regional supplier model in new markets to sustain efficiency, consistency and cost control.
Flores advises other restaurant brands aiming for supply chain resilience to prioritise relationships over merely seeking the lowest cost. “It can be tempting to chase the lowest costs, but that approach often sacrifices long-term reliability. Consider everything a supplier brings to the table—not just price, but also quality, delivery consistency, innovation and communication. Establishing trust and shared goals with suppliers pays dividends over time,” he said.
Looking toward the future, Flores envisions a growing emphasis on regional supply chain strategies within the restaurant sector. He anticipates a decline in coast-to-coast shipping as brands adopt more efficient, locally tailored solutions. By investing in region-specific distribution and manufacturing partnerships, companies can reduce costs and delivery times while enhancing flexibility to respond to market changes. “Having region-specific contracts and relationships allows brands to pivot more effectively as demand shifts and market conditions evolve,” Flores noted.
Taco Cabana’s approach exemplifies how a brand can build a resilient and scalable supply chain that supports both growth and brand values in a difficult economic environment. Through targeted sourcing, strong partnerships and regional efficiency, the company is positioning itself to adapt and thrive despite ongoing market pressures.
The Fast Casual publication is reporting on Taco Cabana’s strategic supply chain initiatives as a notable example of industry adaptation in an inflationary environment.
Source: Noah Wire Services
