Foodservice Breakfast Trends in the U.S.

Aug 1, 2010
150 Pages - Pub ID: LA2718792
Abstract Table of Contents Search Inside Report Related Reports
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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.

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


Additional Information

Market Insights: A Selection From The Report


Share of Stomach: Sales Analysis

Packaged Facts 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 the lunch and (especially) dinner dayparts.
Growth in the breakfast daypart faces near-term challenges:

  1. higher unemployment means fewer people hooked into restaurant breakfast via work-driven routine, as well as reduced paychecks to support a desire to have breakfast outside of the home;

  2. a more cost-conscious consumer who may more practically weigh the cost of an inexpensive breakfast at home against the lifestyle benefits of eating it outside the home (convenience, menu item interest, and indulgence to name a few); and

  3. an industry environment in which players are chasing foot traffic at the expense of guest check. But with only 34% of restaurant goers eating restaurant breakfast in the past month (according to our proprietary survey) and an even smaller percentage of the general population, the industry can woo the more than 150 million adult consumers who do not use restaurant breakfast.

U.S. Bureau of Labor Statistics Consumer Expenditures Survey data suggests that the bulk of food expenditure spending growth during 2005-08 has come from spending on food at home, with food-away-from home expenditures as a percentage of food expenditures actually dropping 2.5 share points.

However, share of breakfast and brunch expenditures rose from 9.5% of restaurant-related expenditures per “consumer unit” in 2005 to 10.2% in 2008, with dollars spent on breakfast and brunch per “consumer unit” up 11.2% during the three-year period.

Frequent Coffee Drinkers: Custom Usage, Attitudes and Behavior Drilldrown

  • Frequent coffee uptake is closely associated with age, as it often becomes a “rite of passage,” used by many adults as they wind through their careers to stay on task. Usage often becomes habitual, and, as people age, it continues to be used while other (less healthy or more calorie-laden) beverages go by the wayside.

  • Coffee and breakfast go together—at least from the perspective of frequent coffee drinkers. Whereas 49% of adult respondents to Packaged Facts’ June 2010 proprietary survey agree with the statement “breakfast is the most important meal of the day,” 55% of frequent coffee drinkers think so.

  • This supports current restaurant operator strategies to enhance their coffee platforms and leverage coffee/food bundles. Coffee drinkers, fixated to varying degrees on getting their coffee to start the day, can be led into the restaurant, where they can then be sold an entrée, breakfast sandwich or side to go with it.

  • Some 65% of respondents who have gotten breakfast from a restaurant in the past month have gotten it from a fast food restaurant, but among those who are frequent coffee drinkers, usage stays about the same.

  • Drinking a lot of coffee also correlates with higher average breakfast meal spend: $6.87 versus $6.51, or 5.6% higher.

 

In The News


Value Pricing Breakfast Menus Helps Steady Daytime Restaurant Spending, Bodes Well for Future Growth

New York, August 3, 2010The most important meal of the day continues to face short-term challenges related to the recession, but market research publisher Packaged Facts’ Breakfast Trends in the U.S. Foodservice Market predicts consumer spending on breakfast at restaurants will rebound from an anticipated downturn in 2010 to approach $38 billion in 2011, as current value menu pricing strategies influence future spending habits.

“Fast food and QSR (quick-service restaurant) operators are playing the ‘price equals value’ card for everything it’s worth. By pushing the envelope with $1 deals, they risk enabling a pool of ‘extreme affordability’ customers. But the upshot for breakfast is that it remains a relatively untapped daypart, so that traffic gained today may translate into additional revenue tomorrow,” says Don Montuori, publisher of Packaged Facts. “We believe that decisions by the likes of Denny’s and Bob Evans to place everyday value for quality food at the forefront of their branding initiatives make a great deal of sense. Value pricing meets the reality of today’s and tomorrow’s lower-to-middle and middle-income consumers who frequent family restaurants. For breakfast, they are spinning full-service value menus and value in portion size.”

Packaged Facts expects McDonald’s foray into $1 breakfast menus to create pressure among other fast food/QSR players to match its lead—an industry-wide trend previously glimpsed with the proliferation of non-breakfast $1 value menus. Burger King, Wendy’s and Subway have already made major breakfast moves.  The bottom line is that low cost resonates with restaurant breakfast users, with 31% of respondents to Packaged Facts’ proprietary survey claiming they have been influenced by a maximum $3 price when selecting a restaurant for breakfast, versus 16% who placed a limit at $10.

Convenience influences consumer breakfast decisions, with convenience to work or errands, routine, and the need to get somewhere else quickly factoring in. Also relevant are breakfast menu features, such as getting a favorite menu item, wide variety, and healthy menu items.  And, because more than half of U.S. adults drink coffee, restaurants have created value bundles that offer coffee with breakfast food to increase foot traffic.

Even though restaurant sales fell during the recession and initial recovery, breakfast has fared relatively well and has taken market share away from both the lunch and dinner dayparts.  Packaged Facts found that only 34% of restaurant goers had eaten breakfast at a restaurant in the past month and an even smaller percentage of the general population said the same, which means the industry has an opportunity to woo the more than 150 million adult consumers who do not use restaurant breakfast. 

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 in 2010 and beyond. Highlights of the study include directional consumer behavioral and attitude analysis via Packaged Facts’ proprietary Consumer Restaurant Outlook Tracker; 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; restaurant and menu selection analysis, driven by Packaged Facts’ proprietary consumer survey results; and much more.

About Packaged Facts - Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer goods and retailing, foods and beverages, demographics, pet products and services, and financial products.  Packaged Facts also offers a full range of custom research services.

 

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