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Mastering the morning

For operators, breakfast could prove most important meal of the dayparts

It’s a well-worn cliché that breakfast is the most important meal of the day, although many restaurateurs probably would argue with that. Among other things, breakfast tends to generate low check averages and can be an operational hassle for restaurants not equipped to deal with it.

Nevertheless, more operators across all service levels are paying attention to the morning daypart because that’s where much of the action is.

The NPD Group, a consumer research firm based in Port Washington, N.Y., calculates that 60 percent of restaurant business growth over the past five years has come from breakfast sales, and the rest from snack periods. Dinner traffic has been dropping, and lunch is flat, according to NPD restaurant analyst Bonnie Riggs.

“That was even before the recession,” she said.

But Riggs and other trend watchers say breakfast’s lower cost and the pervasive belief that eating it is good for you are key factors driving increased morning meal traffic.

And, with an increasing number of foodservice operators deciding to offer breakfast, convenience also has emerged as an important factor — reflected in the fact that 70 percent of breakfasts purchased at all restaurants aren’t eaten there, according to NPD.

Sunny forecast

Quick-service sandwich giant Subway added breakfast last April, and morning traffic at the 25,000-unit chain exceeded expectations, the company said. That has led to the addition of limited-time offers such as the Sunrise Subway Melt and Breakfast B.M.T., which a spokesman said are doing so well they are being added as permanent menu items.

The Sunrise Subway Melt sandwich includes turkey, bacon, Black Forest ham and egg white with melted cheese. It is served with a choice of vegetables. The B.M.T. is similar, but with salami and pepperoni instead of turkey.

The spokesman said new breakfast items are being researched but declined to offer further details.

“As with everything we do, ingredient optimization is always a top priority for us in ensuring we have the right mix of products and that our franchisees are profitable,” he said.

Other chains also are seeing breakfast business as a major growth driver. Luby’s Cafeterias, when it announced its results for the quarter ended Feb. 9, said weekend brunch was the biggest traffic driver.

John Glass, an analyst covering the Wendy’s burger chain, which is expected to be offering breakfast in 1,000 of its 6,600 units by the end of 2011, estimated that morning meals could add $150,000 in income per restaurant initially, and the daypart’s sales eventually could ramp up to $250,000 per store.

McDonald’s recently added $1.99 oatmeal to its menu, providing half a cup of fruit as well as whole grains and dietary fiber.

Riggs said that while NPD predicts annual restaurant sales over the next decade will increase less than 1 percent, breakfast would continue to enjoy robust growth, especially for eat-in breakfasts at quick-service chains.

She said that sales for eat-in breakfasts at quick-service operations grew by 13 percent over the past five years, compared with sales of breakfasts ordered to go, which rose by 9 percent in the same period.

“It’s going to be an exceptionally strong growth area in the future, based on our forecasts,” she said.

Riggs said on-premise quick-service breakfast traffic was being driven by aging baby boomers, but as the economy improves and 18- to 34-year-olds who were hit hard by the recession get back to work, growth in take-out fast-food breakfasts is likely to speed up.

A healthful start

Breakfast items that customers perceive as being good for them tend to sell better than more indulgent offerings these days.

Anthony Leone, founder of the 10-unit Energy Kitchen in New York — which markets itself as selling food that’s good for you and doesn’t have any menu items with more than 500 calories — said breakfast sales at his fast-casual chain have risen by 10 percent since chains in the city were required to disclose calorie information on their menus and menu boards in 2008.

But factors such as convenience still come into play, which he thinks is why his breakfast sandwich is “by far” the restaurant’s most popular breakfast item. It’s made with five egg whites, low-fat American cheese and turkey bacon and served on a whole-wheat English muffin. The sandwich contains 314 calories and sells for $4.99.

“It sells so well because you can walk and eat it,” he said, noting that Energy Kitchen bundles the sandwich with coffee and two sides for an additional $3.99.

Customers mostly take advantage of that offer on weekends, he added.

Friendly’s, a 500-unit family-dining chain based in Wilbraham, Mass., that is known for its ice cream treats, hoped to extend its reputation to breakfast last year by offering indulgent items such as cream-cheese-stuffed French toast with strawberry compote, topped with strawberry ice cream and whipped cream.

The chain also added a caramel cinnamon swirl French toast — a giant cinnamon roll dipped in French toast batter, fried and served with maple syrup ice cream. Both dishes were priced at about $6.99.

Those dishes performed well in test, but once they were on the menu they mostly were ignored during the week.

“Even though we never stated explicitly that they were positioned for the weekend, that’s where we ultimately found success,” said marketing director Dennis Ineman.

Chris Tomasso, chief marketing officer of 85-unit breakfast-and-lunch chain First Watch, agreed that his customers were more likely to have biscuits and gravy on the weekend and fresh fruit with granola during the week.

IHOP has enjoyed considerably more success with its “Simple & Fit” offerings, which were rolled out in the fall. Every menu item in that category contains fewer than 600 calories, including all children’s items. IHOP communications director Jennifer Pendergrass said the breakfast specialist planned to have “Simple & Fit” options for every limited-time offer. So the new chicken and waffles selections
— containing four waffle quarters and four batter-fried chicken tenders, with butter for the waffles and honey-mustard dipping sauce for the chicken, and weighing in at considerably more than 600 calories — also is available in “Simple & Fit” form as two waffle quarters, turkey bacon and scrambled egg substitute.

“You still have a sweet-and- savory combination,” but with fewer calories, Pendergrass said.

The chicken and waffles were introduced Feb. 28 and are available through May 1. After that, IHOP will be launching its next line of scramblers, which are inspired by chilaquiles — a Mexican breakfast of fried tortillas cooked in salsa, with eggs, and often topped with cheese.

“It’s an innovative flavor that’s part of the Hispanic trend,” Pendergrass said.

The scramblers are available in three versions: one with crispy tortilla chips, enchilada sauce and melted Jack and Cheddar cheese, topped with sour cream and onion; a “Simple & Fit” version with spinach and cheese; and a third with mushroom and cheese.

Power breakfasts

Ed Murph, owner of two-unit Norma’s Cafe in Dallas, which features a classic “meat and three” style Southern menu, said he has seen a growing demand for breakfast at his restaurants.

“People want to start their day with more than a Pop Tart,” he said.

“We see more people getting out and having breakfast meetings,” Murph said. He added that he also has seen a jump in breakfast catering, particularly for catered breakfasts with scrambled eggs, breakfast meats, hash browns and toast rather than just pastry and juice.

He said breakfast meetings seemed to have the added benefits of having staff show up early and of not taking two hours out of the middle of the day for lunch meetings or having to spend money on appetizers and drinks for business dinners.

Norma’s serves certain breakfast items all day, such as easy-to-make pancakes and egg dishes, which Murph says appeal to people who want to eat lightly at night and those who don’t work conventional nine-to-five shifts.

Tomasso of First Watch said over the past 18 months, “We’ve seen the meal period between breakfast and lunch really start to grow.”

He said patrons of that 9 a.m. to 11 a.m. daypart include people sitting down for breakfast meetings, retired people and stay-at-home parents.

“A lot of self-employed people, too,” Tomasso said. “Maybe they start their days a little later, and we offer free Wi-Fi, so we see people coming in for that.”

Those diners, too, are tending more toward fresh fruit, homemade granola and other lighter fare instead of biscuits and gravy.”

Contact Bret Thorn at [email protected].

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