It's Time for Breakfast!

Breakfast is still the fastest growing major daypart and has room for growth. However, the recession is taking a bite out of breakfast as restaurants face a greater challenge: drawing in new customers and keeping old ones.¹  61% of consumers currently eat breakfast at home while 15% don't eat breakfast at all - that's 76% of consumers available for operators to convert to restaurant breakfast! In addition, 50% of breakfast restaurant patrons are spending less this year than last year on restaurant breakfast.²

Operators will need to push the innovation envelope to provide momentum into this highly competitive daypart, even after the recession eases.¹ This means tougher cost competition, speed and portability will be the underlying themes as operators attempt to persuade the 6 out of 10 Americans who do eat breakfast to change their loyalties and the remainder of them to change their ways.

To capitalize on these trends, many chains are entering, reviving or enhancing their breakfast programs. 

• McDonald's reported a 16% increase in coffee sales with the addition of its premium coffee and Steak 'n Shake upgraded to Seattle's Best Coffee.
• Wendy's reintroduced a breakfast platform, including a value menu with Sausage & Egg Burrito, Egg & Cheese Biscuit, Sausage Biscuit, Hash Browns, Coffee Cake Muffin and Blueberry Muffin (although the company intends to scale back this platform in 2009 and relaunch in 2011).¹
• IHOP's "Hungry Consumer Relief Plan" includes all-you-can-eat pancakes for $4.99.¹
• New value meal participant Starbucks introduced a set of "coffee and breakfast pairings" in March 2009, each for $3.95, available all day. ¹

Although the recession is taking center stage, long-term trends are not slowing. 77% of restaurant users say, "I would like to see more healthy items on the menu"³ and 54% of restaurant breakfast goers say "closeness to work/home/commute" is most important in selecting a restaurant for breakfast.¹

Therefore, it is clear that health innovation will only become more important and convenience will continue to evolve.

With operators serving up breakfast to meet consumer health and convenience needs, menu innovation will be key.

¹ Mintel Menu Insights - February 2009 Report

² Breakfast Foodservice Trends - U.S., February 2009

³ Healthy Dining Trends - U.S., May 2009