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This is a special message from Schwan’s Foodservice.

A flurry of new research is providing some surprising answers to the question of what consumers want to find on the next generation of restaurant breakfast menus.
Bargain prices have been the trusted eye-openers to date, agree two studies released in mid-August. Indeed, value is cited as the reason why breakfast has been a rare opportunity for sales for a foodservice industry wincing from the economic downturn.

Morning tickets in the quick-service sector, a sizzling skillet of breakfast activity, are averaging just $2.84 — hardly a cloud in the coffee of strapped consumers, notes one of the reports, a study produced by Boston-based Intelliprice.

“It’s the most affordable meal to eat away from home, so this attracts consumers who are nervous about high-priced restaurant meals,” says Leslie Kerr, president and founder of the pricing consultancy.

Restaurateurs aren’t foregoing value as they update their morning menus, Intelliprice concluded from its survey of some 2,300 quick-service and convenience-store outlets. Even with an improvement in economic conditions, the operators have raised their breakfast prices by an average of just three cents in 2010, the company found. That’s despite volatility in the cost of morning staples like bacon.

Other data show why operators are loath to scrap their a.m. deals. About a third of breakfast buyers look for a morning meal that will cost them less than $3, according to a second study, “Breakfast Trends in the U.S. Foodservice Market,” from Rockville, Md.-based Packaged Facts. Women are particularly sensitive to that price barrier, the company found.

“Value as defined by cost is as relevant today as it was six months ago and as relevant as it was a year ago,” says David Morris, author of the Breakfast Trends study. “It’s probably even more relevant today because of entrenched customer expectations — they’ve come to expect it.”

With so many chains elbowing their way into the breakfast market, and operators feeling the squeeze of deal-making on their bottom lines, a quest is on for distinct items that attract customers with more than a compelling price.
“Operators who want a piece of the action expand their offerings, knowing it’s an opportunity to increase profit, especially with the right product mix,” observes Intelliprice’s Kerr.

Noticeable among those new offerings, she and other menu monitors indicate, are items promising healthfulness and quality.

New data also suggest that some of the chains vying most ardently for morning sales are cottoning to the lifestyles of breakfast patrons, who can differ considerably from consumers who only visit restaurants at lunch or dinner.

For instance, a third study, just-released by Atlanta-based Scarborough Research, shows that quick-service breakfast customers are 18 percent more likely than non-breakfasters to spend at least 20 hours per week online. It’s no coincidence, the researcher concludes, that breakfast contenders are providing free Wi-Fi service as a customer draw.

McDonald’s and Starbucks, two early morning powerhouses, both recently stopped charging customers for an online connection.

Other traits differentiating pre-lunch customers include a high household income: College-educated earners of more than $100,000 have the strongest propensity to eat fast-food breakfasts, says Scarborough.

Those patrons are 30 percent more likely than the general population to be drawn by healthful menu choices, notes Packaged Facts. Disclosed calorie counts are also a lure, it found.

Mixing healthful choices into the line-up is one of the major ways that chains have tried in recent months to differentiate their morning menus. Better-for-you items, for instance, were a key consideration for Subway when drafting its first national breakfast lineup, which was rolled out in the spring. The roster sports sandwiches made with eggs, cheese and breakfast meats, but patrons can choose egg whites instead of whole eggs, or a Light Wheat English muffin as the bread.

“We looked at traditional items, and we took it from there and added a section of nutritional items,” says Chris Martone, executive chef of the 33,000-unit chain. “We wanted to have a variety of choices for a variety of preferences.”
The nod to health concerns was meant to complement a value orientation, not supplant it, says Subway spokesman Les Winograd. “We had a deal of $2.50 for a breakfast-and-coffee combination. That’s an attention-getter,” he says.
Subway also has bragging rights to another differentiator: “We pretty much have the largest variety of nutritional options in the quick-serve market,” says Lanette Kovachi, Subway’s on-staff dietician.

Healthful options are even popping up at breakfast traditionalists like Bob Evans, a family chain known for its sausage gravy and other daybreak indulgences. Its “Fit From the Farm” selections include a vegetable omelet and a fresh-fruit plate.

The changes at Bob Evans, and at many of its family-dining segment peers, are part of a multi-pronged effort to fend off heightened competition at breakfast from quick-serve chains. While trying to match the grab-and-go pack on price and convenience, the sit-down breakfast specialists are stressing the quality of what they provide.

“We believe that decisions by the likes of Denny’s and Bob Evans to place everyday value for quality food at the forefront of their branding initiatives makes a great deal of sense,” Packaged Foods says in its Breakfast Trends report.

Tony Seta, who opened his Tampa-based Master Chef Seta LLC consultancy after a long career as a chain research-and-development chef, sees upscale hashes, made from chicken, turkey or roast beef, as a logical continuation of the full-service trend.

He also anticipates more interest in waffles, particularly the soul food staple of chicken and waffles.

Yet some limited-service brands are moving in a quality direction as well. Subway’s Martone, for instance, says he expects the use of pancakes and waffles as sandwich “carriers” to be a near-term focus for fast-food.

Jack in the Box recently extended its premium grilled-sandwich line to include a breakfast version. Partly because of that introduction, “breakfast continued to be our strongest daypart in the third quarter, even though we did not have an explicit value message,” chief executive Linda Lang said during a conference call with investors.

Quality is also the differentiator Wendy’s is promising for its breakfast menu, which has been under development for several years.

The other big gun about to enter the battle for breakfast, Taco Bell, has been testing such full-service-style items as a Country Breakfast Skillet, along with sandwiches made with French bread instead of traditional toast. In tests, the items have been priced at $2.49.

With that escalating competition, “not all [quick-service restaurants] will win,” says Kerr. “If customers can’t make the leap that their favorite late night venue should become their new breakfast spot, operators will struggle for enough [market] share.”

But with restaurant breakfast sales forecast by Packaged Facts to hit $37 billion this year, experts expect the whole pack to try a little harder.

For more ideas and exciting breakfast options, click here, contact your Schwan’s Food Service sales representative, or call 1-800-302-7426.