The NRN 50: The most important meal

The NRN 50: The most important meal

Decades ago, weekday breakfast was a meal Mom served up at home, before the family left for work and school. Eating on the run, at a desk or behind the wheel just wasn’t part of the equation.

Over the years, however, as women entered the workforce in droves and families became busier, Americans’ concept of breakfast began to evolve.

“There used to be two meals that were about more than pure refueling, they were about rejuvenation and family connection, and they were breakfast and dinner,” says Larry Wu, Seattle-based vice president and food and beverage consumer strategist at research and consulting firm Iconoculture. “Weekdays, Mom always made breakfast because it’s the most important meal of the day. Now, that’s really turned into just dinner being that meal, where we need rejuvenation. So we’d rather sleep in and then rush on our way.”

In fact, nearly a third of Americans eat breakfast away from home, and that figure continues to rise, according to data from Technomic, a Chicago-based market research firm.

That shift has meant big business for quick-service restaurants, which have extended operating hours and developed portable items to ensure that harried customers have no excuse to skip the morning meal.

In the past few years, nearly every fast-food operator has jumped on the breakfast bandwagon, broadening the variety of quick morning offerings. Seattle-based Starbucks [3] rolled out its warm breakfast sandwiches to 3,000 U.S. stores and last fall introduced a couple of new items, including a wrap filled with spinach, egg, roasted tomato and feta. Fast-food morning menus now include everything from lunch foods like chicken nuggets and hamburgers to the increasingly mainstream breakfast burrito.

Burger King [4] and McDonald’s [5], based in Miami and Oakbrook, Ill., respectively, each have a full slate of breakfast items and are offering competing breakfast value menus of items priced near $1. Similarly, Jack in the Box [6], based in San Diego, long has offered an array of breakfast foods.

Additionally, Dublin, Ohio-based Wendy’s [7], which had a failed experiment with breakfast service in the mid-1980s, has been rolling out breakfast items in the last year. Irvine, Calif.-based Taco Bell [8] also has tested breakfast items in select locations.

In general, away-from-home breakfast is one of the fastest-growing restaurant trends. In 2006, bakery-cafe sales grew 13.3 percent, and doughnut sales grew 9.7 percent, compared with a growth rate of 5.9 percent for restaurant sales overall.

At McDonald’s, for example, breakfast now constitutes 30 percent of total sales.

Trendwatchers say the grab-and-go breakfast trend still has room to grow. Technomic’s figures reveal that breakfasts from restaurants accounted for about $54 billion in sales in 2007, with a typical consumer buying 32 breakfasts out a year, or fewer than one a week.

The idea of a quick breakfast on the go resonated with consumers in part because fast-food operators recreated the hearty, nostalgic comfort-food breakfast, says NPD Group vice president Harry Balzer. A quick warm meal with eggs, bacon and potatoes from a restaurant could beat out a quick bowl of cold cereal at home almost every time.

“They found a ready, willing market,” he says. “Breakfast out is easier, and cheaper than eating lunch or dinner out, and now, it’s become part of our lives.”

Part of the interest in breakfast on the part of fast-food chains comes from a simple reality: Lunch has become “the incredible shrinking daypart,” with the lunch “hour” turning into an average 25 minutes. With fewer sales at lunch, operators have turned their attention to creating new products that would drive breakfast business.

Fast-casual restaurants, too, have taken note of the fast-food chains’ success with breakfast, and many are trying out ways to capture a piece of the pie. Some appeal to a more upscale customer. St. Louis-based bakery-cafe chain Panera [9] Bread Co., for example, offers the Baked Egg Souffle wrapped in sweet French pastry dough on its breakfast menu.

Aaron Noveshen, founder of restaurant consulting firm The Culinary Edge in San Francisco cites Dallas-based Corner Bakery [10] as one fast-casual chain that’s trying to attract customers with more discerning palates. They’re one of the few to-go players cooking eggs to order, as well as offering portable panini sandwiches. Last fall, Corner Bakery [11]’s 99 stores gave out 10,000 travel mugs to customers, a not-so-subtle hint to think of the chain for breakfast to go.

While Americans love a sweet pastry for breakfast, they know it won’t keep their stomach from rumbling midmorning, so dishes that combine sweet flavors with protein tend to sell well, Noveshen says.

For example, Burger King introduced last fall a Honey Butter Homestyle Melt. The dish contains sausage, egg, and melted American cheese, served on buttery sourdough bread topped with a sweet honey butter sauce.

McDonald’s also found success blending sweet and savory tastes with its McGriddles, sandwiches featuring egg, meat and cheese on syrup-flavored pancakes.

Breakfast diners’ openness to tasting new offerings has helped drive growth in this quick-service daypart, says NPD’s Balzer.

“Americans love to try new [combinations of] foods, especially foods they’re familiar with, like a new way to have a waffle or omelet,” he says.

Similarly, John Schaufelberger, Burger King’s senior vice president of global product marketing and innovation, says the market for such items has exploded.

“Consumers’ lifestyles have changed, and they’re time-starved in the morning,” he says.

The barrier for fast-casual restaurants is the speed with which to-go orders need to be ready, says Noveshen—generally, two minutes or less. As a result, portable items that can be eaten on the road are a hit. In fact, Noveshen says, 19 percent of all meals in the U.S. now are eaten inside cars.

Adding drive-thrus, as Denny’s [12] recently began testing in Indianapolis, might help clear up the bottleneck, as could online ordering.

In the future, expect consumers’ growing health concerns to impact new menu entries, Noveshen says.

“I think that’s really the direction, the health halo, though it has to taste great and be satisfying,” he says. “Fresh yogurt is one of the next big things, like a new concept in Palo Alto [Calif.] called Fraiche.”

NPD’s Balzer looks to new small chains such as Boulder, Colo.-based Cereality [13] and wonders if more can’t be done to make America’s top breakfast choice, cereal, more portable.

“Someone will figure out how to give us the No. 1 food in a new way,” he says.

Iconoculture’s Wu expects to see sales of breakfast items grow through expanding breakfast service hours. Research has shown strong consumer interest in having breakfast served all day. In fact, McDonald’s is exploring the possibility of serving breakfast throughout the day.

That’s a notion that would play well with Americans, who still have a strong love for breakfast, regardless of where—or when—they have it, Wu says. He recalls standing in line at a fast-food restaurant while on vacation in Virginia Beach, Va., and watching customers become irate when the manager announced breakfast service had ended.

“Breakfast is comfort food and a value meal,” he says, “no matter what time of day it is.”