April 25, 2014
Old news: Breakfast is a big opportunity for foodservice
The real scoop: Breakfast consumer decisions are fluid and the space is highly competitive, so act now
The quick-service breakfast game is getting a lot of conversation in the media currently. There is renewed interest in capturing business during a very rushed part of the day.
Breakfast as a business has untapped opportunities. While 10% of consumers were reported by research firm NPD to skip breakfast back in 2011, today 63% of Americans regard skipping breakfast as unhealthy according to data from food consultancy Technomic, Inc.
Taco Bell, part of Yum Brands, and McDonald’s are two major players getting attention in the morning breakfast business, as Taco Bell has begun aggressively advertising its new breakfast menu. Taco Bell has over 5,000 units in the United States that are responsible for nearly all of the restaurant chain’s profits.
With introductions of an A.M. Crunchwrap, Waffle Taco and Cinnabon Delights, the Taco Bell chain is going no-holds-barred into breakfast business, while McDonald’s U.S. business continues to post sales declines-1.7% down in its most recent quarter along with a 1.7% operating profit dip. Breakfast is about 25% of the McDonald’s business.
Let’s take a look at some highly-relevant strategies foodservice operators can adopt in the limited-service breakfast game:
Breakfast winning strategies
Bread redux and baked goods resiliency
Breads are seeing a return closer to the center plate. Breads on menus have been increasing. “Chefs across all segments are exploring a variety of artisan breads-many are even baking them in-house-and using them to elevate sandwiches and entrÃ©es, and even serving them as a standalone course,” noted a recent article in Nation’s Restaurant News (April 2014). While quick-serve chains have shown a penchant toward brioche and pretzel bread, don’t count out potato levain, focaccia, and challah, notes the article.
For those charged with building breakfast business in the foodservice framework, bread can be a winning point of differentiation, because sandwiches fare large. Flatbread breakfast paninis are on the rise, as noted in a Packaged Facts (PF) Foodservice Breakfast Trends in the U.S. report. Tim Horton’s and Dunkin’ Donuts are just two chains promoting flatbreads. Cosi, a fast casual eatery with 121 units, just launched a new line of thin multigrain flatbread sandwiches with a lower-calorie profile than regular sandwiches.
Hot sandwiches, noted by Packaged Facts’ Foodservice Breakfast Trends report, make up 17% of the hot sandwich menu at McDonald’s. At convenience stores, breakfast sandwiches are number one with customers when purchasing a breakfast meal, according to NPD’s FONA consultancy group.
Packaged Facts’ research also discovered a sizeable portion of consumers - 39% of those surveyed - said they ordered baked goods during their last away-from-home breakfast occasion. And baked goods over-index at two leading breakfast destinations, Starbucks and Dunkin’ Donuts. At Dunkin’ Donuts, breakfast baked goods have 51% share of the breakfast menu there and they have 30% of the share of food menu items at Starbucks, according to PF and Datassential MenuTrends. At most major limited-service breakfast destinations, baked goods range between 30% and 40% of the breakfast menu according to PF research.
Major strategy points include adopting seasonal and new flavors in baked goods and offering a good selection and focusing on quality.
Coffee reigns supreme but don’t lose sight of juice
Coffee is a big draw to consumers and is foremost on many consumers’ minds in the morning. The quality and variety of served coffee p is critical to tapping other greater breakfast market opportunities on the menu. In 2013, Wawa, a chain of approximately 600 locations in the Mid-Atlantic, New Jersey and Florida, upped its lineup of morning beverage options with the introduction of Caramel Macchiato, Chai Tea Latte, Iced Caramel Macchiato, Iced Chai Tea Latte, Iced Vanilla Chai Tea Latte, and Vanilla Chai Tea Latte.
The taste of coffee is the most important influence in purchasing coffee in restaurants, according to PF 2014 survey data. With breakfast on-the-go business being brisk, operators should leverage breakfast on the strength of the taste and quality of their coffee. Bad coffee typically translates into poor capture of breakfast business.
According to Pacakged Facts’ research, juice captures 12% of the breakfast menu at limited-service outlets. There’s a big bet on juice and it’s one that can’t be ignored. More and more consumers are being drawn the health & wellness attributes of juice. Starbucks’ investment in the Evolution Fresh chain and its line of cold-pressed juices, along with the continuing popularity of juice and smoothie chains, like Jamba Juice and Daily Juice portray and emphasize juice as viable meal options.
Expect there to be a concerted innovation effort in the future focused on morning juice options.
Remaining insights into successful breakfast foodservice strategies can be found on slideshare here.
To review the Foodservice Breakfast Trends report, please review its abstract here.-- David Morris
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