Restaurant operators are adding or expanding their breakfast options in the hopes of tempting consumers out of their homes for the morning meal and tapping into a growing daypart.
More than 75 percent of American consumers eat breakfast at home and another 10 percent skip it entirely, according to research firm The NPD Group. Only about 8 percent of consumers eat breakfast in restaurants.
“And that means there’s a huge opportunity,” said Bonnie Riggs, restaurant analyst for NPD, based in Port Washington, N.Y.
The key, say breakfast believers, is finding the right mix of quality, convenience, affordability and health to convince consumers that their next dining-out occasion or business meeting should be at their morning meal.
About 60 percent of restaurant business growth over the past five years has come from the breakfast daypart, NPD data indicates.
“And breakfast will continue on a strong growth path over the next decade,” Riggs predicted.
For the year ended in June 2010, American consumers made about 13 billion visits to restaurants at breakfast, up 18 percent from about 11 billion in 2005, NPD said.
Consumers generally believe that eating breakfast is a healthy way to start the day, “but we don’t really have time to fix breakfast in the morning,” Riggs said.
Breakfast has become a traffic driver in the quick-service world, a segment that NPD predicts will see double-digit growth in breakfast sales over the next decade.
Sales for dine-in breakfasts at quick-service restaurants grew by 13 percent over the past five years, while sales of breakfast ordered to go increased by 9 percent during the same period, NPD said.
Quick-service restaurants that have been expanding or testing breakfast menus include Wendy’s, Burger King, Taco Bell, Subway, Dunkin’ Donuts, McDonald’s, Jamba Juice and Starbucks.
Analysts have projected that the addition of breakfast at Wendy’s, for example — which is expected to be offered in 1,000 of the chain’s 6,600 units by the end of the year — eventually could account for about $250,000 in sales per store.
Irvine, Calif.-based Taco Bell is continuing to test the addition of breakfast, but officials are not ready to say whether the morning meal will be rolled out to all 5,600 locations in the United States this year.
Items in test markets have ranged from the portable, such as a Sausage Skillet Burrito, to value-priced items like a 79-cent Potato & Cheese Roll-Up. Brand partnerships resulting in items like Cinnabon Delights or Jimmy Dean sausage also were in test last year.
Biscuit bonanza
Biscuits are big at breakfast. The 1,900-unit Hardee’s chain, owned by Carpinteria, Calif.-based CKE Restaurants Inc., pioneered the made-from-scratch biscuit in the quick-service segment with its debut in the early 1980s.
Brad Haley, CKE’s executive vice president of marketing, said the breakfast biscuit remains the linchpin of the chain’s morning menu, which accounts for 45 percent of daily sales.
Biscuit sandwich variations range from fried bologna to country-fried steak on a biscuit, though two top sellers remain the basic biscuit with sausage gravy and the sweet cinnamon raisin biscuit with icing.
Now that Hardee’s has debuted a turkey burger for later in the day, guests also are starting to ask for more healthful turkey sausage offerings on their biscuits, Haley said.
“We’re looking into it,” he said.
Hardee’s guests also are requesting burgers at breakfast, which presents operational challenges since the lunch and dinner dayparts utilize different equipment, Haley said.
“We’re moving a lot of biscuits in the morning, so it would be hard to add that while running a full breakfast operation,” he said.
CKE, however, is testing the offer of made-from-scratch biscuits at sister brand Carl’s Jr., a chain that sells more burgers during morning hours than breakfast food, Haley said.
Hardee’s also is continuing to improve its breakfast menu, having recently switched to a more premium coffee and new coffee machines to allow units to brew smaller batches more often, ensuring freshness.
Unlike McDonald’s, however, Haley said Hardee’s will not be offering espresso-based drinks or cappuccino anytime soon.
“Our guests are looking for a good ol’ American cup of joe,” he said.
Healthful options
Much in demand on breakfast menus are more healthful options.
Enter oatmeal, the breakfast menu darling of the past few years. Oatmeal was mentioned on restaurant menus in 2010 nearly 14 percent more often than in 2008, according to menu research firm Datassential.
Starbucks and Jamba Juice have found success with oatmeal, and McDonald’s in January debuted its fruit-and-maple version.
In an October 2010 survey, Mintel found that many consumers said the most important factor in selecting a breakfast dining spot was the healthfulness of menu options. Eric Giandelone, Mintel’s director of foodservice research, said menu-labeling requirements only will increase demand for better-for-you options, as consumers eventually see the fat and calorie levels in their favorite breakfast foods.
Convenience is also an important factor at breakfast. NPD research shows that about 70 percent of morning daypart meals purchased in restaurants are eaten elsewhere.
Breakfast sandwiches are the most popular morning menu offering during the week, according to Mintel, in part because they are portable. Wendy’s breakfast offerings include an Artisan Egg Sandwich with bacon or sausage, Asiago cheese and hollandaise sauce, and a sourdough panini, for example.
Even those outside the quick-service world are finding results with breakfast.
The Souplantation & Sweet Tomatoes buffet/salad bar chain has rolled out a Sunday breakfast from 9 a.m. to noon at all but four of the company’s 120 units. On all other days, the restaurants don’t open until 11 a.m.
The chain is known as Souplantation in California and Sweet Tomatoes outside the Golden State. During morning hours on Sunday, the restaurants’ hot bars feature dishes such as build-your-own burrito, potatoes O’Brien, scrambled eggs, biscuits and gravy, and oatmeal. In March the chain added chilaquiles — a Mexican-style egg-and-cheese casserole with tortilla strips.
The menu also includes a breakfast pasta called Mediterranean Sunrise Pasta, featuring linguini with eggs, feta, spinach, tomatoes, basil and a touch of garlic.
The breakfast dishes are available in addition to the full salad and soup bar.
Michael Mack, chief executive of Souplantation & Sweet Tomatoes parent company Garden Fresh Restaurant Corp., based in Carlsbad, Calif., said the company first started testing the Sunday breakfast in 2007 and found that it has lifted sales as much as 9 percent for that day.
For reasons Mack cannot explain, the addition of breakfast appears to drive traffic throughout the day, though it’s not the same people who come for breakfast returning later.
The company also tested breakfast offerings on Saturday, but found they could not get traction. Guests, it seems, are more relaxed and willing to dine out on Sunday mornings, after church or before sports events, Mack said.
“People just have more time on Sundays,” he said. “It’s a winner.”
CASE STUDY: McDonald’s , Oak Brook, Ill.
It all started with the Egg McMuffin.
Canadian bacon, a slice of American cheese and a griddle-fried egg — perfectly rounded with the help of a non-stick ring — between slices of toasted and buttered English muffin.
The iconic dish was developed in the late 1960s by McDonald’s franchisee Herb Peterson as a hand-held version of eggs Benedict, which he reportedly loved. Peterson first started serving the McMuffin, now considered to be the inspiration for the breakfast-sandwich category, in his Santa Barbara, Calif., restaurants.
McDonald’s units typically weren’t open for breakfast at the time, but Peterson’s creation was such a hit that the Egg McMuffin was rolled out systemwide in 1973, and the burger chain added breakfast service, beginning a long era of morning daypart dominance.
Today, McDonald’s captures about one-third of reported visits to quick-service restaurants during the morning daypart, a rate that has remained fairly steady since the first quarter of 2009, according to research firm Sandelman & Associates, based in San Clemente, Calif.
Sandelman’s data is based on a sample of about 12,000 consumers in more than 30 markets who were asked about their fast-food choices. In the first quarter of this year, Starbucks came in second with about 21 percent of breakfast visits.
At McDonald’s, breakfast now accounts for about 25 percent of sales, said Danya Proud, a spokeswoman for McDonald’s USA, and that figure also has remained fairly steady in recent years, despite the recession and competitive challenges during morning hours by others in the quick-service segment.
Today, McDonald’s breakfast menu goes way beyond the Egg McMuffin, with everything from burritos to Fruit ’N Yogurt Parfait. The newest addition rolled out to the chain’s 14,000 U.S. locations in January is Fruit & Maple Oatmeal, which officials have proclaimed a hit.
In its first-quarter earnings call in April, McDonald’s chief executive Jim Skinner said the new oatmeal “strengthened our overall nutritional profile and gave customers another great-tasting, high-quality option not only at breakfast, but all day long.”
Unlike many other breakfast offerings, McDonald’s oatmeal is available all day because it poses no equipment switch-out requirement or other operational challenges.
The chain is planning to add to its oatmeal offerings with new flavors in the pipeline, Proud added.
“Breakfast continues to be a growth opportunity for us,” she said.
Breakfast also was bolstered in 2009 with the rollout of McDonald’s new McCafé line of specialty coffee drinks. McCafé units not only saw a lift during morning hours, but later dayparts benefited as well, Proud said.
In late 2009 McDonald’s also added a breakfast dollar menu, which includes items like a Sausage Biscuit, a Sausage Burrito and a Sausage McMuffin.
Company officials said the dollar menu helped drive sales and traffic in the mornings throughout 2010, despite the breakfast expansion efforts of big-chain competitors such as Burger King and Subway.
“We have a unique customer at McDonald’s,” Proud said. “They expect quality, but it’s also about value.”
Contact Lisa Jennings at lisa.jennings@penton.com.
