Breakfast Trends in the U.S. Foodservice Market
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The recession is reshaping how consumers interact with the restaurant industry, and the breakfast daypart is no exception: value pricing remains at the forefront of menu strategies, as growing guest checks often takes a backseat to generating guest traffic. However, unlike the lunch and dinner dayparts, breakfast benefits from long-term untapped guest traffic potential, and it can generate healthy margins, factors that are drawing major new players into the market.
Packaged Facts’ Breakfast Trends in the U.S. Foodservice Market estimates that breakfast daypart restaurant sales reached $37.2 billion in 2009, and forecasts that they will reach $37.0 billion in 2010 and $37.7 billion in 2011. While these figures may appear tepid at first glance, when viewed against the backdrop of lower overall restaurant sales, the breakfast daypart has fared relatively well, taking share from lunch and dinner. In the final analysis, we believe that near-term challenges will give way to long-term opportunity.
Breakfast Trends in the U.S. Foodservice Market provides unique insights into consumers’ evolving relationship with the breakfast daypart, helping restaurant operators position their brands—and menus—for consumers today and tomorrow.
The recession is reshaping how consumers interact with the restaurant industry, and the breakfast daypart is no exception: value pricing remains at the forefront of menu strategies, as growing guest checks often takes a backseat to generating guest traffic. However, unlike the lunch and dinner dayparts, breakfast benefits from long-term untapped guest traffic potential, and it can generate healthy margins, factors that are drawing major new players into the market.
Packaged Facts’ Breakfast Trends in the U.S. Foodservice Market estimates that breakfast daypart restaurant sales reached $37.2 billion in 2009, and forecasts that they will reach $37.0 billion in 2010 and $37.7 billion in 2011. While these figures may appear tepid at first glance, when viewed against the backdrop of lower overall restaurant sales, the breakfast daypart has fared relatively well, taking share from lunch and dinner. In the final analysis, we believe that near-term challenges will give way to long-term opportunity.
Breakfast Trends in the U.S. Foodservice Market provides unique insights into consumers’ evolving relationship with the breakfast daypart, helping restaurant operators position their brands—and menus—for consumers today and tomorrow.
- CHAPTER 1: EXECUTIVE SUMMARY
- Scope and Methodology
- Scope
- Methodology
- Macroeconomic Analysis
- Fast Facts
- Restaurant Usage & Outlook Tracker
- Fast Facts
- Share of Stomach: Sales Analysis
- Fast Facts
- Breakfast Trends, Innovations & Strategies
- Fast Facts
- Breakfast Restaurant Selection Analysis
- Fast Facts
- Breakfast Menu Selection Analysis
- Frequent Coffee Drinkers: Custom Usage, Attitudes and Behavior Drilldrown
- Breakfast on the Menu: Restaurant Brand Analysis
- McDonald’s
- Breakfast strategy: sales growth = guest count growth
- Breakfast menu mix
- Other snippets
- Burger King
- Refocusing on breakfast
- Other snippets
- Wendy’s
- Wendy’s reenters breakfast wars with premium QSR differentiation
- Starbucks
- Recession strategy pays dividends
- Brand extensions: VIA and Seattle’s Best
- On the food and coffee front
- Bob Evans
- On the menu: off-premises growth, remodeling, and quickening service
- Menu trends
- Breakfast in a big way
- Cracker Barrel
- Menu item innovation
- Other snippets
- Denny’s
- Recession challenges: region, lower-middle income demographic and late-night
- 2009-2010 breakfast menu strategy
- $2 $4 $6 $8, who do we appreciate?
- Other moves
- CHAPTER 2: MACROECONOMIC ANALYSIS
- Restaurant sales show life, but we believe positive news is transitory
- Restaurant industry rebound still not in cards
- February, March and April 2010 food services & drinking places sales sequentially improve
- May advance sales point to grocery growth
- Graph 2-1: Non-Adjusted Monthly Sales, 12-Month % Change, Grocery Stores & Food Services and Drinking Places, 2009-2010
- Packaged Facts’ Consumer Restaurant Tracker: Gloomy Near-Term Outlook
- In-home breakfast and dinner trend remains significant
- Graph 2-2: Consumer Restaurant Tracker: Current Behavior: A Top Line View
- Looking ahead: Saving & grocery spending trumps limited service and full-service restaurant spend
- Graph 2-3: Consumer Restaurant Tracker: Next 3 Months: A Top Line View
- National Restaurant Association index contracts after transitory spike
- Graph 2-4: Restaurant Performance Index, 2006-2010
- Macroeconomic factors affecting restaurant sales
- Consumer confidence still in a trough
- Present Situation Index decreases as perceptions of business conditions, job prospects darken
- Expectations Index dips as job prospect optimism dims
- Unemployment picture stabilizes
- Some perspective
- Graph 2-5: Unemployment Rate and Consumer Confidence: 2007-2010
- Unemployment rate not one-size-fits-all
- Disparity in unemployment rates by education level
- Young adults, minorities and men also find harder going
- Graph 2-6: Unemployment Rate, Selected Demographics, 2007-2010
- Graph 2-7: Unemployment Rate, by Race/Ethnicity, 2007-2010
- How can increasing personal savings and reducing the debt burden be bad?
- Transitory Spring 2010 restaurant benefit driven by reduced savings
- Chipping away at the debt burden
- Graph 2-8: Consumer Debt Burden, 2000-2010
- Graph 2-9: Savings Rate & Debt Service Ratio & Financial Obligations Ratio, 2007-2010
- Unemployment and GPD forecast
- Slow employment rebound to coincide with slow rebound in consumer spending
- Graph 2-10: Unemployment and GDP Forecast, 2010-2012
- Stock & housing declines deflate household wealth; rebound to record 2006 levels a long way off
- Q1 2009 to Q1 2010 sees uptick in household wealth, but still $10 trillion off 2006 high
- Graph 2-11: Household Net Worth, 2005-2010
- Case-Shiller and FOMC housing pessimism
- Q2 2010 summary equities analysis
- Graph 2-12: Wealth Effect: Wilshire 5000 and Case-Shiller Index: 2007-2010
- Food at home maintains pricing edge
- Graph 2-13: CPI: Food at Home vs. Food Away from Home, 2005-2010
- Farm value comes back down to earth
- Graph 2-14: Market Basket of Farm Foods, Annual % Change, 2006-2010
- Food inflation forecast revised downward
- Food CPI returns to positive annual growth rate
- Proteins on the upswing
- Dairy prices normalize
- Fruits and vegetables
- Other
- CHAPTER 3: RESTAURANT USAGE & OUTLOOK TRACKER
- Note on reading charts
- Packaged Facts’ Consumer Restaurant Tracker: at-home food spend trumps out-of-home spend
- February 2010 trend continues in June 2010
- Graph 3-1: Consumer Restaurant Tracker: Current Behavior: A Top Line View
- Looking ahead: Consumers more likely to save & spend on groceries than spend at restaurants
- Graph 3-2: Consumer Restaurant Tracker: Next 3 Months: A Top Line View
- Eating breakfast at home had significant traction
- Students, 18-24s and parents more likely to eat breakfast at home
- Graph 3-3: Consumer Restaurant Tracker: Present Behavior: Eating Breakfast at Home
- Restaurant breakfast users as likely as restaurant goers in general to eat breakfast at home
- Graph 3-4: Consumer Restaurant Tracker: Present Behavior: Eating Breakfast at Home, Restaurant Breakfast Users
- Higher-income versus lower-income fast food, family restaurant and coffeehouse breakfast users
- Graph 3-5: Consumer Restaurant Tracker: Present Behavior: Eating Breakfast at Home, Restaurant Breakfast Users, HH Income Splits
- Planned spending on fast food appears grim
- Graph 3-6: Consumer Restaurant Tracker: Future Behavior: Fast Food Restaurant Spending
- Intended full-service spend lacks promise
- Graph 3-7: Consumer Restaurant Tracker: Future Behavior: Full-Service Restaurant Spending
- Intention to save money remains high
- Graph 3-8: Consumer Restaurant Tracker: Future Behavior: Saving Money
- Restaurant breakfast users more likely to plan higher fast food and full-service spending
- Graph 3-9: Consumer Restaurant Tracker: Future Behavior: Restaurant Spending, by Restaurant Breakfast Type
- Restaurant usage and usage frequency
- Overview
- Graph 3-10: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010
- Graph 3-11: Restaurant Usage in Last Month, by Restaurant Type, 2010
- 18-34s drive guest counts
- Graph 3-12: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010, by Age
- And exhibit higher usage
- Graph 3-13: Restaurant Usage in Last Month, by Restaurant Type, 2010, by Age
- HH income
- Graph 3-14: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010, by HH Income
- Graph 3-15: Restaurant Usage in Last Month, by Restaurant Type, 2010, by HH Income
- Employment status
- Graph 3-16: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010, by Employment Status
- Graph 3-17: Restaurant Usage in Last Month, by Restaurant Type, 2010, by Employment Status
- Restaurant breakfast use
- Breakfast day part accounts for less than 10% of all usage
- Graph 3-19: Day Part Usage on Last Visit, 2010
- Restaurant breakfast use in past month
- Graph 3-20: Restaurant Breakfast Usage in Last Month, Type of Restaurant, 2010
- Gender bias?
- Graph 3-21: Restaurant Usage in Last Month for Breakfast, 2010, by Gender
- Food retail may be siphoning sales from younger restaurant goers
- Graph 3-22: Restaurant Usage in Last Month for Breakfast, 2010, by Age
- HH income: Fast food as the great equalizer
- “Great coffee”: aspiration or reality?
- Graph 3-23: Restaurant Usage in Last Month for Breakfast, 2010, by HH Income
- Employment status: sense of routine and daily obligation
- Graph 3-24: Restaurant Usage in Last Month for Breakfast, 2010, by Employment Status
- Appendix: Consumer Survey
- CHAPTER 4: SHARE OF STOMACH: SALES ANALYSIS
- Market size and overview
- Flat sales—but read between the lines
- Near-term challenges
- Long-term outlook
- Growth factors
- Full-service caveat
- Graph 4-1: Limited-service and full-service breakfast sales, 2005-2011
- Breakfast daypart traffic growth outpaces industry
- Fast food/QSR segment accounts for 80% of breakfast daypart purchases
- Restaurants sales trends by daypart
- Consumer food expenditure trends suggest migration to food at home spend
- Graph 4-2: Consumer Food Expenditures, 2005-2008
- Breakfast share of spend increases by 11% during 2005-2008
- Graph 4-3: Meals Away From Home Expenditures, by Daypart, 2005-2008
- Spending on breakfast away from home, by region
- Graph 4-4: Breakfast Away From Home Expenditures, by Region, 2008
- Spending on breakfast away from home, by age
- Graph 4-5: Breakfast Away From Home Expenditures, by Age, 2008
- Spending on breakfast away from home, by income
- Graph 4-6: Breakfast Away From Home Expenditures, by Income, 2008
- Spending on breakfast away from home, by race/ethnicity
- Graph 4-7: Breakfast Away From Home Expenditures, by Race/Ethnicity, 2008
- Daypart meal spend analysis
- Breakfast meal spend approaches that for lunch at fast food & family restaurants
- Graph 4-8: Consumer Restaurant Meal Spend, by Daypart and Restaurant Type, 2010
- Breakfast meal spend, fast food versus family restaurants
- Graph 4-9: Breakfast Meal Spend, Fast Food Versus Family Restaurants, Selected Demographics
- Meal spend by daypart, fast food restaurants
- Graph 4-10: Meal Spend by Daypart, Fast Food Restaurants, Selected Demographics
- CHAPTER 5: BREAKFAST TRENDS, INNOVATIONS & STRATEGIES
- Fast food/QSR pushes breakfast value envelope
- Extreme affordability strategy extends to breakfast
- McDonald’s $1 value menu to pressure competition
- Burger King addresses breakfast challenges
- A subversive BK Breakfast Muffin
- BK Breakfast Bowl for under $3
- Seattle's Best-branded coffee program
- Wendy’s to reenter breakfast wars
- Subway rolls out nationwide breakfast program
- Fast casual breakfast players results a mixed bag
- Au Bon Pain grows breakfast year-over-year
- Einstein Noah and Panera Bread tread water
- Atlanta Bread does breakfast to the tune of 20% of sales
- Other fast casual breakfast moves
- Family restaurants push everyday value
- Full-service value menus
- Value in portion size
- Convenience trends
- All-day breakfast
- Breakfast catering
- Customization
- I said, “Coffee!”
- Coffeehouses embrace value bundling
- And Starbucks cashes in on mid-tier Seattle’s Best
- Sandwiches rule the breakfast menu
- Health on menu
- Dunkin’ Donuts sprinkles health onto the menu
- Chick-fil-A adds yogurt parfait
- A comforting healthful breakfast
- Fruits and smoothies
- CHAPTER 6: BREAKFAST RESTAURANT SELECTION ANALYSIS
- Note on reading charts
- Breakfast restaurant selection influencers
- Overview: coffee, routine and low price significantly shape restaurant breakfast decision
- Graph 6-1: Breakfast Restaurant Selection Influencers, 2010
- Restaurant selection: convenience influencers
- Gender: men = linear routine; women = task balancing routine?
- Graph 6-2: Restaurant Selection: Breakfast Convenience Influencers, by Gender, 2010
- Age: work life holds the key
- Graph 6-3: Restaurant Selection: Breakfast Convenience Influencers, by Age, 2010
- HH income breeds breakfast routine
- Graph 6-4: Restaurant Selection: Breakfast Convenience Influencers, by HH Income, 2010
- Employment status
- Graph 6-5: Restaurant Selection: Breakfast Convenience Influencers, by Employment Status, 2010
- Urban, Suburban, or Rural location
- Graph 6-6: Restaurant Selection: Breakfast Convenience Influencers, Urban, Suburban, Rural, 2010
- Restaurant selection: breakfast menu item influencers
- Gender: women more likely to have value orientation; men as inclined to want healthful offerings
- Graph 6-7: Restaurant Selection: Breakfast Menu Influencers, by Gender, 2010
- Age: younger patrons seek a difficult balancing act
- Graph 6-8: Restaurant Selection: Breakfast Menu Influencers, by Age, 2010
- HH income: healthy options and small portions
- Graph 6-9: Restaurant Selection: Breakfast Menu Influencers, by HH Income, 2010
- Employment status
- Graph 6-10: Restaurant Selection: Breakfast Menu Influencers, by Employment Status, 2010
- Restaurant selection: breakfast cost threshold influencers
- Gender: women more likely to gravitate to lower price points
- Graph 6-11: Restaurant Selection: Breakfast Cost Threshold Influencers, by Gender, 2010
- Age: $3 is a hit across the board
- Graph 6-12: Restaurant Selection: Breakfast Cost Threshold Influencers, by Age, 2010
- HH income
- Graph 6-13: Restaurant Selection: Breakfast Cost Threshold Influencers, by HH Income, 2010
- Employment status
- Graph 6-14: Restaurant Selection: Breakfast Cost Threshold Influencers, by Employment Status, 2010
- Restaurant selection: breakfast dinein partner influencers
- Gender: it’s a work thing
- Graph 6-15: Restaurant Selection: Breakfast Dine-in Partner Influencers, by Gender, 2010
- Age: 65+ not interested in eating alone
- Graph 6-16: Restaurant Selection: Breakfast Dine-in Partner Influencers, by Age, 2010
- Restaurant selection: breakfast takeout partner influencers
- Gender
- Graph 6-17: Restaurant Selection: Breakfast Takeout Partner Influencers, by Gender, 2010
- Age
- Graph 6-18: Restaurant Selection: Breakfast Takeout Partner Influencers, by Age, 2010
- Employment status
- Graph 6-19: Restaurant Selection: Breakfast Cost Threshold Influencers, by Employment Status, 2010
- CHAPTER 7: BREAKFAST MENU SELECTION ANALYSIS
- Note on reading charts
- Menu selection influencers, by daypart
- Graph 7-1: Menu Selection Influencers, by Daypart, 2010
- Breakfast restaurant menu selection influencers, by demographic
- Gender
- Graph 7-2: Breakfast Menu Selection Influencers, by Gender, 2010
- Age
- Graph 7-3: Breakfast Menu Selection Influencers, by Age, 2010
- HH income
- Graph 7-4: Breakfast Menu Selection Influencers, by HH Income, 2010
- Employment status
- Graph 7-5: Breakfast Menu Selection Influencers, by Employment Status, 2010
- Urban, suburban, or rural location
- Graph 7-6: Breakfast Menu Selection Influencers, by Rural/Urban/Suburban, 2010
- CHAPTER 8: FREQUENT COFFEE DRINKERS: CUSTOM USAGE, ATTITUDES AND BEHAVIOR DRILLDROWN
- Frequent coffee drinkers
- Graph 8-1: Frequent Coffee Drinkers: Selected Demographics
- Importance of breakfast to frequent coffee drinkers
- Bring on better coffee
- Graph 8-2: Importance of Breakfast, Frequent Coffee Drinkers, Selected Demographics
- Restaurant types visited by frequent coffee drinkers
- Coffeehouses maintain an edge on fast food
- Graph 8-3: Restaurant Types Visited for Breakfast, Frequent Coffee Drinkers, Selected Demographics
- Restaurant selection factors, mean restaurant use and average spend
- It’s all about the coffee
- More coffee means more coffeehouse visits—but not fast food visits
- Coffee drinkers help enrich coffers
- Graph 8-4: Restaurant Breakfast Selection Factors, Mean Restaurant Use, and Average Spend, Frequent Coffee Drinkers
- CHAPTER 9: BREAKFAST ON THE MENU: RESTAURANT BRAND ANALYSIS
- Note on food lifestyle segmentation charts
- McDonald’s
- A $7.5 billion breakfast behemoth rolls dice on high-volume, low-ticket breakfast
- Breakfast strategy: sales growth = guest count growth
- Breakfast menu mix
- Core customers: Convenience and Ease and Weekend Cooks
- Graph 9-1: McDonald’s Usage Frequency Analysis, Food Lifestyle Segmentation
- McDonald’s core low- and high-frequency users
- Graph 9-2: McDonald’s Core Demographics: Low- and High-Frequency Users
- McDonald’s by the numbers
- Graph 9-3: McDonald’s by the Numbers
- Burger King
- Barbell strategy
- Reinvigorating breakfast
- Brunch in testing stage
- Longer breakfast hours
- Convenience and Variety on a Budget
- Graph 9-4: Burger King Usage Frequency Analysis, Food Lifestyle Segmentation
- Burger King core low- and high-frequency users
- Graph 9-5: Burger King Core Demographics: Low- and High-Frequency Users
- Burger King by the numbers
- Same-store sales dip during nine months ending March 2010
- Graph 9-6: Burger King by the Numbers
- Wendy’s
- 2009-2010 strategy: “Real” food at a real value
- Coming up in 2010 and 2011
- Wendy’s reenters breakfast wars with premium QSR differentiation
- Local pricing
- Acquire or be acquired?
- “Food Lifestyle” segmentation groups a blend of McDonald’s and Burger King
- Graph 9-7: Wendy’s Usage Frequency Analysis, Food Lifestyle Segmentation
- Wendy’s core low- and high-frequency users
- Graph 9-8: Wendy’s Core Demographics: Low- and High-Frequency Users
- Wendy’s by the numbers
- Graph 9-9: Wendy’s by the Numbers
- Starbucks
- Recession strategy pays dividends
- Menu pricing strategies and customer incentives
- Pricing and bundling
- Brand extensions: VIA and Seattle’s Best
- Rewards, technology and new retail formats
- On the food and coffee front
- Core Starbucks users a relatively healthful bunch
- Graph 9-10: Starbucks Usage Frequency Analysis, Health Attitudes
- Graph 9-11: Starbucks Usage Frequency Analysis, Food Lifestyle Segmentation
- Starbucks core low- and high-frequency users
- Graph 9-12: Starbucks Core Demographics: Low- and High-Frequency Users
- Starbucks by the numbers
- Graph 9-13: Starbucks by the Numbers
- Bob Evans
- On the menu: off-premises growth, remodeling, and quickening service
- Menu trends
- New on the menu
- Breakfast in a big way
- Emphasizing value for money
- Bob Evans by the numbers
- Graph 9-14: Bob Evans by the Numbers
- Cracker Barrel Old Country Store, Inc.
- Restaurant operations
- Retail operations
- 2009-2010 strategy: couponing, promotions & Seat to Eat
- Menu item innovation
- Guest count demographics
- Reformed Traditional users may look to Cracker Barrel to meet them halfway on health
- Graph 9-15: Cracker Barrel Usage Frequency Analysis, Food Lifestyle Segmentation
- Cracker Barrel core low- and high-frequency users
- Graph 9-16: Cracker Barrel Core Demographics: Low- and High-Frequency Users
- Cracker Barrel by the numbers
- Graph 9-17: Cracker Barrel by the Numbers
- Denny’s
- Recession challenges: region, lower-middle income demographic and late-night
- 2009-2010 breakfast menu strategy
- Build Your Own Grand Slam continues to deliver
- But other rollouts round out the menu
- 2010 shift to everyday value supported with LTO entrees
- $2 $4 $6 $8, who do we appreciate?
- Post-Super Bowl free Grand Slam promotions continue
- Convenience moves
- Courting older consumers and students
- Weekend Cooks help drive sales
- Graph 9-18: Denny’s Usage Frequency Analysis, Food Lifestyle Segmentation
- Store-made, per-cooked meal cross-tie?
- Graph 9-19: Denny’s Usage Frequency Analysis, Food Competition
- Denny’s core low- and high-frequency users
- Graph 9-20: Denny’s Core Demographics: Low- and High-Frequency Users
- Denny’s by the numbers
- Graph 9-21: Denny’s by the Numbers
- Appendix on food lifestyle segmentation charts
