Foodservice Breakfast Trends in the U.S.

  • Go Back
  • Text Size:
  • Foodservice Breakfast Trends in the U.S.

    Packaged Facts
    8/1/2010
    150 Pages

    Abstract:
    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.

    Highlights of the study include:

    • Directional consumer behavioral and attitude analysis via Packaged Facts' proprietary Consumer Restaurant Outlook Tracker, which assesses restaurant breakfast users current and planned restaurant-related behavior;
    • Proprietary analysis of average meal spend by restaurant type and by daypart, with a focus on the breakfast daypart, to help target consumers who can bring in higher guest check averages;
    • "Share of Stomach" sales analysis that trends limited-service and full-service sales by daypart, and provides in-depth spending patterns for the breakfast daypart by region, income, and race/ethnicity (analysis includes comparisons to food-at-home spending);
    • Meal "pricing threshold" analysis: $3, $5, and $10 consumer-imposed breakfast spend limits;
    • Restaurant and menu selection analysis, driven by our proprietary consumer survey results;
    • A custom "demographic drilldown" on frequent coffee drinkers;
    • Industry-leading restaurant brand analyses of top restaurant breakfast players, including 2010-2011 breakfast strategy and demographic analysis according to "core customers," low- and high-frequency guest traffic, and "food lifestyle" segmentation;
    • Thorough, investment-grade macroeconomic analysis that helps industry participants understand current consumer restaurant spending behavior.
    Themes and topics covered in the report also include:

    • Breakfast daypart market size and forecast, including limited-service and full-service restaurant segments;
    • Value, convenience, menu item, and health innovations, strategies and trends
    • Restaurant usage by daypart, according to restaurant segment (coffeehouse, fast food restaurant, smoothie shop, family restaurant, casual restaurant, fine dining, convenience store, and grocery store)
    • Breakfast value menus and meal bundles
    • The importance of who accompanies the breakfast restaurant user to dine in and pick up a meal
    • Importance of health-related factors to the purchase decision, including food advertised as all-natural and healthy and calorie/nutrition information.
    Data Methodology

    Our methodology rests on a balance of data-centric expertise and holistic understanding, maximizing accuracy and depth of analysis. Report data is derived from thorough analysis of a host of sources, including the following:

    • Proprietary company interviews
    • Proprietary consumer surveys
    • The Experian Simmons National Consumer Study
    • The U.S. Census Bureau
    • The Bureau of Labor Statistics Consumer Expenditure Survey
    • The U.S. Department of Agriculture
    • The U.S. Securities and Exchange Commission
    • The Bureau of Labor Statistics Retail Trade Survey
    • Company presentations
    • Trade associations and trade magazines
    • Academic journals
    • Industry conferences
    • Restaurant menus

    Table of Contents:

    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

  • Go Back
  • Text Size:
  • Report information is provided by MarketResearch.com
    Ads by Nevistas

    Newsletters
    Hospitality
    Trends
     
    Hospitality
    Newsletter
     
    Hospitality
    Technology
     
    Your Email Address
     
    Advertise Here