When it comes to quick-service breakfast, the Clown is king. McDonald's fast-food fiefdom over the dawn daypart is so well fortified it owns the category. But that's not keeping competitors from grabbing a growing share of breakfast booty by tantalizing customers with novel initiatives.
Since last fall, coffeehouse giant Starbucks has rolled out a line of better-for-you baked goods and hot instant oatmeal, while Jamba Juice has thawed its smoothie-centered menu with its own slow-cooked oatmeal options. Aiming squarely at the palates of spicy foods lovers, Del Taco introduced a breakfast bowl to its Mexican-influenced morning menu in January, while Dunkin Donuts rolled out an array of savory flatbread breakfast sandwiches last summer for folks craving breakfast around the clock.
Industry trend tracker and consultant Dennis Lombardi of WD Partners in Dublin, Ohio, views these initial attempts to grab a share of McDonald's breakfast sales as harbingers of future battles.
“It wouldn't surprise me if somewhere out there we run into breakfast wars like we did burger wars in the past,” said Lombardi. Given McDonald's vast army of stores, menu options and deep marketing war chest, Lombardi doesn't expect the “the battle is going to be bloody” because “scaling that hill is an incredible challenge.” But in a marketplace dominated by time-poor, hyper-price-conscious buyers, “there are going to be small skirmishes throughout, and it's going to make consumers smile at some point.”
That's largely because of the fact that customers are paying less for breakfast eaten away from home as many chains have recently introduced breakfast items priced between $2 and $3. According to Stan Frankenthaler, executive chef at Canton, Mass.-based Dunkin’ Brands, new flatbreads cost from “the mid-two-dollar range for breakfast, and the mid-three-dollar range in the p.m.,” when patrons choose heartier options such as the Southwest Chicken flatbread.
Starbucks' Power Protein Plate — a hardboiled, cage-free egg, whole-wheat bagel, peanut butter, cheese, apples and grapes — comes in at a pricier but still affordable $4.95. The chain's cost spectrum is balanced by an array of muffins and fruit and nut bars priced at $1.75.
A9-ounce portion of Jamba Juice's steel-cut oatmeal, which is offered with a choice of blueberry-blackberry, apple cinnamon or fresh banana toppings, costs $2.95, a bit higher than Starbucks' instant oatmeal, which is sold for $2.45. The freshness of both the cooking method and toppings accounts for the price difference, said Jamba CEO James White.
“The big point of difference between our offering and instant offerings is quality and value,” White said. “We feel there is no comparison between our offering and some of the instant offerings in the marketplace today.”
Despite its reputation for icy smoothies, White said hot oatmeal sales have gone better than expected in many markets — so well, in fact, that he's encouraged about future similar rollouts.
“This by far is both the most significant non-smoothie … breakfast food launch for our company,” he said. Asked about what's in the pipeline, he gave few details. “Oatmeal is the first installation in a more comprehensive food strategy that will allow us to play in more dayparts and complement our smoothie offerings,” he said.
Save for Del Taco's new breakfast bowl — a hearty combo of hash brown sticks, scrambled eggs, jalapeno bacon, chili, sour cream, cheddar cheese and cilantro that sells for $2.99 — most chains are leveraging the nutritional value of their new foods to build awareness and sales. Lombardi believes healthful offerings such as oatmeal are smart additions “because they fill a niche that's not already occupied or dominated.” And according to Starbucks' spokeswoman Lisa Passé, healthful offerings are what customers want.
“Customers told us they're more aware of what they want to put into their bodies, that they want foods with omega-3s and whole grains, and that they want it to taste good,” Passé said. “We think we owe our customers good food.”
Portability also is essential to breakfast success, Frankenthaler said, because customers increasingly consume that meal on the hoof. Like Dunkin's donuts, he said its flatbreads are easy to handle and made to enjoy behind the wheel, if necessary. Passé said the bottom of Starbucks' oatmeal container is designed to nest into the top of its coffee cup lids. And while Del Taco's breakfast bowl isn't as simple to consume as its breakfast burritos, the chain's senior vice president of marketing, Sharon Fogg, said, it's still “easy to take to your destination.”
But adding breakfast items — be they simple or elaborate — hasn't proven easy for everyone. Still seeking to find its breakfast groove, Wendy's struggles led it to reduce breakfast tests from 800 stores to 400 in January, though it pledged to ramp up trials again in 2010. Wendy's had launched a major breakfast initiative in the mid-1980s that ultimately failed.
When Starbucks added warm sandwiches to the menu about two years ago, some customers walking inside stores were startled to smell the aromas of cheese and eggs when they expected a bouquet of brewed coffee. But when Starbucks moved to kill the warm sandwich program, enough customers lobbied for a stay of execution that it remains on the menu in 4,000 U.S. stores. Passé said Starbucks was “able to address the aroma issue with later product development.”