Incredible Breakfast Trends

Creativity Makes Economic Sense

The recession that was declared officially over in June of 2009 continues to make its effects known. According to the U.S. Bureau of Labor Statistics, in May of 2014 the unemployment rate stood at 6.3 percent ‒ a far cry from the high of 10 percent in October 2009, but still much higher than the 4.7 percent rate of November 2007.

The point is the American consumer has had a long, hard go of it for nearly seven years and that has caused changes in behavior and lifestyle. Some habits will fall off our collective shoulders effortlessly, but some may be more firmly rooted.

One habit causing echo tremors for the foodservice operator is consumer devotion to value menus, meal deals and other discounts. Per Mintel, 40 percent of consumers say that price point is the biggest factor in choosing a breakfast restaurant, with 45 percent choosing restaurants due to their value menus. Compounding that is the 23 percent who say they often use coupons or loyalty cards for breakfast. Even as the economy strengthens and more people find employment, the expectation remains that a breakfast sandwich should cost a dollar.

This attitude is not merely driven by habit. Many people are finding the job market doesn’t offer the same opportunities it once did. Some challenges are age-related and some workers have been out of their field for too long. Some are underemployed, while others are trying to start a business or freelancing their skills. Many have had to cobble together a living from two or more part-time jobs.

And that directly affects the profitability of breakfast at restaurants.

The reason is not as simple as it might appear. Breakfast is the most habitual meal of the day. Many people who went through a drive-thru every morning while working have been weaned of the habit. Those working from home or working multiple jobs probably aren’t on the road during the hours breakfast is served.

The numbers show that breakfast traffic is doing well, especially compared to other times of the day. But those are sales numbers, not profitability. Two-dollar value meals do not allow for much menu creativity, so consumers may just as well grab a frozen microwavable breakfast sandwich at home.

The good news is that things are getting better slowly, and there are strategies that will help turn this market into a more profitable one for morning restaurateurs:

  1. Since 51 percent of people are more likely to visit restaurants that offer coupons or special price promotions, offering “extreme LTOs” may be a good option. Very limited times (e.g., “Between 10 & 11 tomorrow…”) are easy to offer via Twitter to increase traffic during slow times and quickly measure what brings the best response.
  2. Technomic found 48 percent of people enjoy eating breakfast foods at non-traditional times. If all-day breakfast isn’t feasible, late night or brunch specials may attract more traffic.
  3. The allure of non-menu benefits should not be discounted. Mobile ordering and loyalty programs count, as do socially responsible positions and actions.

But the idea with the most immediate payback is customization. A huge factor in consumers’ choice of restaurants is the ability to customize their food. According to Mintel, this is true for over 80 percent of all consumers, and 85 percent of Millennials. That feeling of control comes with a certain satisfaction and makes the item less price-sensitive.

Call it the pizza model: a $5 medium, 1-topping pizza sounds like a great deal. The first topping is free, but after the onions, mushrooms and extra cheese are added at only $1.75 each, there’s a $10.25 pizza going out the door. In the same way, a build-it-yourself omelet can be offered for only $4 (deal!) with only 95¢ for each extra. With feta, onion, tomatoes, peppers and sour cream, this is now an $8.75 omelet, being eaten by someone who is happy because she got exactly what she wanted.

Breakfast sandwiches handed through a drive-thru window are already customized. If guests can order an egg/cheese/sausage biscuit or an egg/cheese/bacon biscuit, why can’t they have an egg/cheese/sausage and bacon biscuit for an extra charge? Or why not add pickles or a squirt of Sriracha? Maybe a vegetarian would like a double egg and cheese?

The power of customization has worked well for Subway over the years and is one of the keys to Chipotle’s popularity. Go ahead ‒ everybody needs a power breakfast from time to time.


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