Time-starved Americans have developed a demand for dining while they're dashing, no matter the daypart. Eating while driving their cars to work, grabbing a meal as they rush from the commuter train or snagging a snack while running errands have become commonplace as consumers constantly seek to multitask while on the run.
Breakfast may be the last frontier for quick-service restaurants seeking to woo and satisfy hungry consumers on-the-go, as the spoils already have been awarded for the lunch and dinner dayparts. Now breakfast is emerging as the segment poised for growth, and operators are scrambling for a slice of the morning pie.
Sales are edging up for the breakfast daypart. The NPD Group, which tracks consumer trends, pegs the restaurant share of the morning meal at 11 percent in 2006, edging up from 8.7 percent in 1996. "Each year sales have inched up," said Harry Balzer, vice president for the Port Washington, N.Y.-based firm. "Most breakfasts are eaten at home, but gains are coming as convenience is redefined. Restaurants are becoming a packaged-goods purveyor, with the largest growth occurring at restaurants presenting meals to-go. Ultimate convenience used to be pushing the toaster lever; now it's pushing the power window button."
"Breakfast is the most robust and fastest growing of all the daypart segments, even for non-breakfast-oriented concepts," said Bob Spaulding, director of media for Einstein Noah Restaurant Group of Golden. Colo. "We have seen our breakfast business grow from bagels to a full breakfast menu. We are always looking for ways to take our products and make them more robust," he said, referring to the chain's panini and omelet sandwich offerings.
Spaulding reported that individual consumers are not the only ones seeking grab-and-go convenience. Office catering business also is on the uptick, causing the chain to refocus its bulk packaging with an eye on to-go catering for business. The Einstein Noah Restaurant Group has earmarked 18 markets to use dedicated catering managers to handle the need.
"Breakfast is a huge daypart, and we want to be a part of it," said Les Winograd, spokesman for Doctors Associates' Subway brand restaurants. The early morning options have been a part of the Milford, Conn.-based group for years, with the ultimate decision left up to franchisees, Winograd said. "Not all people think of Subway as a place for breakfast, but grab-and-go is what we do. Our items are the ultimate portable option for those wanting to take food to go."
Winograd reported that an added boon to offering breakfast is that sometimes Subway units trap the lunch or dinner share of stomach as consumers elect to order other items to eat later, thus saving time and travel with a one-stop-shop approach.
Chains that one would not necessarily expect to be offering an early-morning meal — such as pizza giants and Mexican food operators — also are diving into breakfast, with the promise of a sunny side up result.
Starbucks entered the fray with its breakfast sandwiches, gussied up with artisan bread and specialty meats. Meanwhile, Subway has added an omelet-style sub, Dunkin' Donuts is offering a new maple Cheddar sandwich and Panera has added eggs, cheese and bacon to its pantry to produce morning-style paninis.
"Nobody's turf is safe," said Dennis Lombardi, executive vice president, foodservice strategies, WD Partners, a Columbus- based multiunit design and development firm, referring to nontraditional breakfast chains entering the fray. Sandwich shops, pizza chains and coffee houses, plus all other channels, including convenience stores and grocery outlets, all are edging into the togo breakfast market.
"Commuting Americans have a new favorite dining room," said Lombardi. "It has a wheel and peddles. Menu items have to be handheld and commuter friendly. Consumers are consistently raising the bar. What becomes a desire leads to an expectation. Expectations then become requirements."
"Dashboard dining is particularly important in the morning," said Sandelman. "People are time-starved, overscheduled and [faced with] long commute times. The opportunity lies ahead for chains that develop how to do to-go breakfast better, cheaper and faster than the competition. Loyalty will be rewarded to those that offer convenience and speed."
The dashboard dining road originally was paved by McDonald's in 1975 with the emergence of the Egg McMuffin for on-the-go appeal. But today the chain's breakfast board sports 20 options.
According to Lombardi, McDonald's has carved out a $6.5 billion head start in the breakfast daypart. "When it comes to breakfast dining on the road, McDonald's is still king of the hill," he said. "Everyone has heard of the burger wars; now we are starting to see the breakfast wars."
Lessons from the Past
Industry experts attribute Wendy's 20-year-ago failure in breakfast to the fact that the chain's offerings were not portable and took too long to deliver to customers. The new wave of to-go options, on the other hand, are designed to dish up the ultimate in convenience.
Burger King recently rolled out the Hamlette sandwich, anchoring the chain's early-morning menu with a 10-item "value menu," and Cheesy Tots in three different portion sizes. French Toast Sticks and Cini-minis offer consumers additional commuter- friendly options. At McDonald's the McGriddle marries a standard egg, meat and cheese combo with pancakes injected with maple-flavored, nondrip technology to pack taste without the mess.
Breakfast burritos, smoothies and sandwiches are other portable options catching on with consumers. Emerging items will resonate with the growing trend toward portability.
"Dashboard dining is huge. Consumers have no time to eat. A huge percentage eats in their cars on their way to somewhere, getting to the next errand or appointment," said Spaulding.
"Items have to be portable and be eaten with one hand. That means making sure the wrapping is dripless. Packaging has to fit dining on the go."
NPD's Balzer forecasted that the classic favorites — eggs, coffee, sausage and pancakes — offered in new contemporary ways with a "let's travel" attitude will be the winners of the cupholder cuisine.
Despite the rosy picture painted for breakfast, Bob Sandelman, chief executive of Sandelman & Associates a consumer research company specializing in the foodservice industry, cautioned that the morning daypart still only commands 11 percent of QSR occasions in 2006. With lunch and dinner serving 40 percent of occasions each, the balance is going to snacks. "The breakfast user is a breakfast user, either eaten in the home or out." The fallout of new competition in the segment is cannibalization of the market as consumers are lured to coffeehouses and sandwich shops.
"The main differentiation is the experience," Sandelman explained. "At a coffeehouse a diner might read the paper or bring in a computer. The fastfood outlet is more hurried with a convenient drive-thru that bodes well for trapping guests on the run."
Garnering guests for breakfast is not the only road to success. Sound operations will position some in the fast lane, experts said. Breakfast interest is growing in corporate boardrooms as growth formulas shift at chains. The breakfast segment is attractive to operators, as each seeks his way to increase same-store sales rather than pushing for more locations.
"The challenge is how to make breakfast work," said Lombardi. "As brands strive to build same-store sales, they look to all dayparts to improve unit economics. With the high cost to develop new stores, expanding daypart options will drive unit economies at stores and offset energy and labor in existing units."
"We are constantly tweaking to stay relevant," said Winograd. "Operationally we are always looking to be more efficient. We redesign the floor plan of the restaurant; realign ingredient locations to save steps and offer different ways of ordering using cell phones and other electronic ways to save service time."
Aseemingly unlimited array of service and menu options is just the start of the breakfast on-the-run wake-up call. Portion sizes, with larger- and smaller-sized options available, let consumers decide on portion size. Sandelman predicts that items will be developed with freshness in mind through packaging and the products themselves, designed to retain heat. Items that bring convenience together with flavorful presentations will serve as a point of differentiation. The new differentiation will be innovation in items.