What's Going on at Breakfast: At Home and Away from Home
The American Egg Board recently presented and sponsored a webinar in association with Prepared Foods titled What's Going on at Breakfast: At Home and Away from Home. Featuring Courtney Parks,Executive Chef, Open City and the Diner. Eric Giandelone, Director of Research, Mintel Foodservice and Craig "Skip" Julius, CRC, CCS, CEC, Director of Innovation at AdvancePierre Foods, the webinar looked at consumer eating behavior at-home and away-from-home, what's changing and what opportunities exist for food formulators in consumer package goods and foodservice.
Following you will find our top ten discussion points from the presentation. Read the panelists responses following each statement.
- Foodservice breakfast sales continue to grow, prompting even more restaurant chains to add morning menus.
Response: Eric Giandelone, Mintel states - Over the next year breakfast at restaurants is forecasted to reach $26 billion, nearly 2% growth over 2010. By 2014, we forecast that this daypart will grow 12% from 2010 levels to $28.5 billion.
The greatest opportunity for many of these restaurants is breakfast. Even with the added costs of opening the doors earlier and new ingredients, breakfast offers an opportunity for restaurants to drive top line sales and to improve margins. In essence restaurants have seen the success of a company like McDonald's has had with its own program and have started to roll out their own breakfast programs.
... even though Caribou Coffee has a natural breakfast positioning with its coffee offering, the chain has recently started testing breakfast sandwiches at units throughout the country, along with other breakfast offerings like scones and oatmeal. Wendy's will be launching its new breakfast menu sometime in 2011 following tests that are ongoing currently. A Domino's franchisee in Ohio has joined three English Dominos with operating 24-hours. The Ohio one is a little different in that it also offers a breakfast pizza based on eggs, cheese, and bacon.
- The low-cost/high-margin aspect of breakfast items has allowed operators to offer aggressive deals to maintain daypart traffic while waiting for an economic rebound.
Response: Eric Giandelone, Mintel mentions - Restaurants are still able to mitigate their losses during breakfast. And the way that they were able to do this was through price promotions. McDonald's expanded its dollar breakfast menu in regional tests to national campaigns. Burger King has applied the barbell pricing model that it so famously used for its fire-grilled ribs to its breakfast menu, with options ranging from $1 for its mini blueberry biscuits to over $4 for the new Ultimate Breakfast platter. Pricing promotions are not being limited to fast food – full service has been especially hard hit over the past two years, as consumers have traded down to lower cost options. In response, restaurants like Denny's have created aggressively tiered pricing strategy menus, with breakfast options priced at $2, $4, $6, and $8. Others have taken a more traditional route, with kids-eat-free promotions, as well as limited time offers designed to drive traffic.
- Breakfast items are popular with diners beyond the breakfast daypart; some experts expect to see breakfast dishes begin to be offered on chain menus during non-traditional times of the day.
Response: Skip Julius, AdvancePierre Foods said - ...breakfast is so comforting that people gravitate to comfort at any part of the day, and because a lot of breakfast items are prepared with meat, so it's a savory item, there is that appeal that crosses over the different day parts.
Every once in a while here at the cafeteria downstairs, we'll do breakfast for lunch and it's a big hit. People line up. It's probably one of the more popular things we do down there.
Chef Courtney Parks, Open City Diner added - Some of them that started doing breakfast like Subway and Pot Belly just in the morning, I think they are going to see a return and possibly switch into possibly having a few all day breakfast items. It's a little like Eric mentioned, it's a little hard to do operationally because they want to offer the full spectrum and they don't want to cut into their offerings – their lunch and dinner offerings – but I wouldn't be surprised to see some of this happen in the near future. People want eggs all day.
- Breakfast remains the "comfort food" meal, but consumer interest is growing in more healthful comfort food options.
Response: Eric Giandelone, Mintel stated - As we have seen from San Francisco and kid's meals just last week, local governments are now mandating healthier foods. The trick for restaurants has always been getting consumers to move from saying they want healthier options, to actually ordering these options.
Chef Courtney Parks added - People can be willing to pay for healthy options; it's just a matter of how it's presented. People are more food savvy than they have ever been, so they know some of the buzz words. Flatbread, multigrain, grass fed...there's a bunch of them. But people are aware of some of these buzz words that to them means healthy. Especially whole grain is what I'm thinking of. And they can be steered in that direction.
- Breakfast sandwiches not only fill the portability and convenience criteria for weekday diners, but can also fill an increasing desire for healthful fare.
Response: Eric Giandelone, Mintel said - A greater variety of breakfast sandwiches are key weekday wants underscoring the importance of portability and convenience during the week. While it may seem contradictory to see more breakfast sandwiches and healthier options being top of mind for consumers, there are ways that restaurants can reconcile these seemingly disparate needs. For example; egg whites can be substituted for a better for you egg sandwich and a whole wheat tortilla makes a healthier addition to a wrap.
- A supplier who understands that weekday and weekend diners have different needs will be especially valuable when partnering with operators.
Response: Eric Giandelone, Mintel mentioned - Again, many of these items are going to be purchased on the way to the office or during a break in the morning. You can understand the emphasis on easy and quick. This has to be top of mind. Taste however, that's going to be more important during the weekend breakfast. With more time to enjoy our breakfast, weekenders are less likely to value convenience and may be more likely to disengage from their diet. This all has implications for how you sell what menu products and ingredients you are pushing out to the operators. Understanding the distinct drivers by weekday and weekend is key when developing these menus.
- As more competitors enter the breakfast daypart, chains will increasingly look to suppliers as menu development partners.
Response: Eric Giandelone, Mintel stated - The number of restaurant operators getting into this daypart will provide a huge opportunity for manufacturers from a selling perspective. However, many of the new breakfast restaurants will look also to these manufacturers to help them develop their menus as partners and responding to some of these external forces that we have already touched upon. In essence they will look to the manufacturers to kind of be consultants for them as a marketing partner. The one thing that manufacturers need to remember when selling into operators is the economics of restaurants right now. Many operators are no longer in a position to simply add ingredients; new additions need to be able to work in other menu items and dishes, thereby reducing the overall cost of a standalone menu dish.
Skip Julius, AdvancePierre Foods added - I pass by the cafeteria and we do breakfast here and I smell that bacon and it's like a magnet. It wants to pull me in there. And other aromas – like bacon and eggs – texturally, what is one of the great food contrasts ever created. There are so many sensory things about breakfast that are so powerful and so from the manufacturer's side, what we try to do is understand those things and build products that deliver to those expectations. That is a critical piece.
- Ethnic twists on breakfast items help operators differentiate their menus from the competition while exciting consumer interest and encouraging consumer trial.
Response: Chef Courtney Parks, Open City Diner said - And I agree with the ethnic line...we constantly experiment with ethnic flavors and ingredients and people aren't intimidated by them at all and especially in metropolitan areas because they are used to dining out and you know you see different cultures.
- Among the newer trends seen at breakfast are the diversity and creativity of the carriers for familiar breakfast ingredients.
Response: Skip Julius, AdvancePierre mentioned - I am starting to see some cool trends for other vehicles to deliver traditional breakfast foods. So what you have is familiar with a twist. That's the phrase I was looking for. So you might have bacon and eggs which is the familiar part, but it might be in a potato cup or it might be in a waffle sandwich. So different types of delivery – there's something about breakfast and because it's so comforting and so familiar, people want a certain base of foods to work off of and if you do like a little tweak to it or you change up a little sauce or something, people are okay with that. As long as that comfort taste is there, they are willing to take a little bit of a risk or an adventure.
- Recyclable packaging and gluten-free foods are two things on which operators would like to see suppliers focus more attention.
Response: Chef Courtney Parks, Open City Diner said - From manufacturers I would say packaging. Recyclable packaging, easy to breakdown packaging – that's been a huge push for us especially in urban areas where the recycling programs and just the cost of waste removal has skyrocketed here in our area. That would be a big help.
I see vegetarian and gluten-free options as a place for growth. Especially gluten-free, we've noticed a spike in the numbers of inquiries that we receive about products and about ingredients. We are consciously working on gluten-free options. We now have gluten-free pizza crusts, we sell a gluten-free beer – they do really well. It's a lifestyle choice that is sometimes brought on or forced on by allergens, but it's also become a popular way of eating as a diet. So lately we've got a lot of inquiries about gluten-free options.