The ‘quesadilla wars’ are brewing at Taco Bell and Chipotle

• Chipotle is finally letting customer order quesadillas online and through its app.
• Taco Bell, meanwhile, has brought back the Quesalupa and is pushing its own quesadilla.
• “Is this the start of the quesadilla wars?” asks Credit Suisse analyst Lauren Silberman.
• See more stories on Insider’s business page.

You’ve heard about the chicken sandwich wars. But, what about the quesadilla wars?

Last week, Chipotle finally added quesadillas to the menu, available online and in the chain’s app. The menu item has been a top customer request for years, and CEO Brian Niccol’s personal favorite meal at the chain.

But, Chipotle isn’t the only chain serving quesadillas. As Credit Suisse analyst Lauren Silberman wrote in her weekly analysis on Friday, Taco Bell has served quesadillas for years and, last week, launched the return of the Quesalupa.

“Just hours after Chipotle announced it would launch quesadillas (on 3/9), Taco Bell sent email and app notifications reminding customers of its Chicken Quesadilla, and on 3/10, announced the nationwide return of the Quesalupa (Quesadilla + Chalupa) beginning on 3/11, with a marketing campaign titled, ‘Overhyped,'” Silberman wrote.

Silberman added: “Is this the start of the quesadilla wars?”

Why you should care about the ‘quesadilla wars’

The potential cheese-filled battle between Chipotle and Taco Bell is particularly interesting for a few reasons.

First, the quesadilla has long been Taco Bell’s turf, in large part because Chipotle did not think it was feasible to actually add the item to menus. Warming the quesadilla takes extra time, which disrupts Chipotle’s traditional assembly-line process.

Chipotle has been able to cut that time down to 30 seconds, from three minutes. By only allowing customers to order the menu item online or via app, all quesadilla orders are prepared on the “second-make line,” or an additional area dedicated to assembling off-premise orders.

“Pair [the digital lines] up with a great app experience, a great web experience, and then” you start to see an impact to the digital business, which includes mobile and delivery orders, Niccol recently told Insider’s Nancy Luna.

Second, analysts are extremely optimistic about how much the quesadilla can boost sales at Chipotle. Cowen analyst Andrew Charles told Insider last week that he expects the new menu item to boost sales 3% to 4%. Silberman estimates quesadillas can contribute 5% to 10% to same-store sales at the chain.

Finally, the quesadilla rollout reveals how Chipotle is thinking about new menu items.

Niccol helped create a new “stage-gate” program for testing new menu items at Chipotle. At the same time, the chain is open to new menu items and options that are only available on the app for a limited window, drawing from fast-food rivals strategy of limited-time offerings. Taco Bell is known for its limited-time offerings, a strategy that was developed partially by Niccol when he was CEO of the chain from 2015 to 2018.

“I’m really proud of how we’ve been disciplined in what we’ve done with the menu,” Niccol told Insider.