As changing consumer behavior and shifting food trends continue to reshape the away-from-home breakfast market, savvy foodservice operators are exploring ways to maximize their opportunities in the evolving morning daypart.
One of the more dramatic directional shifts impacting breakfast sales today is the trend toward snacking.
In a recently published study entitled, “The snackification of breakfast: How changing consumer habits are creating new opportunities,” author Julian Mellentin says, “Thanks to time pressure [breakfast] has become the meal occasion where people are most likely to skip a meal at home and eat on-the-go. As a result, it is at breakfast that the trend towards the 'snackification of everything' can be seen most clearly.
“It is no exaggeration to say breakfast has already been re-defined by snacking,” adds Mellentin, director of New Nutrition Business, a research and consultancy with offices in London; Lyon, France; and Detroit.
Amplifying operator interest in breakfast is that it appears to be the only daypart still promising any growth potential. According to the NPD Group, a global information company in Port Washington, N.Y., U.S. consumers reduced their restaurant visits at lunch and supper in 2013 but increased their visits at breakfast for the fourth consecutive year. More than 12.5 billion breakfast visits were made to foodservice outlets that year, reflecting a 3-percent gain over the previous year.
Indeed, more Americans are opting to eat breakfast away from home these days. According to NPD vice president Harry Balzer, the average American purchased 19 morning meals at restaurants in 1984. Today, the average has risen to 31.
NPD's “A look into the Future of Foodservice” study also projects total restaurant breakfast visits are expected to increase by 7 percent over the next nine years.
That being said, breakfast continues to remain a largely in-home meal activity. In 1984 the average American ate 289 breakfasts at home versus 280 today. “Breakfast is still an in-home activity,” Balzer says, “but there's been a move toward more breakfasts outside the home. So breakfast [at foodservice operations] has room to grow yet.”
Darren Tristano, executive vice president of Technomic Inc. says, “Over time breakfast has been deeply underpenetrated” by the restaurant industry, noting that the morning meal period today is responsible for some $50 billion in foodservice sales — 18 percent of which is generated by daypart pioneer McDonald's, which recast the away-from-home breakfast market with the Egg McMuffin in the 1970s. However, Tristano posits that while breakfast sales “had been on the uptick,” more recently growth has flattened out.
“Now operators are taking share — we see that Wendy's has gotten out of breakfast and Taco Bell is getting in.
Despite the debate surrounding the daypart's potential for growth, experts tend to agree that breakfast remains an opportunity for those operators who can accommodate changing societal trends — and that snacks can play an important role. “The opportunity in breakfast is huge and global,” Mellentin says.
According to a 2014 study conducted by Nielsen, “Breakfast: Still the most important meal of the day,” “Overall, U.S. consumers are still eating breakfast. They’re just eating differently than in the past. Ready-to-eat cereal, for example, is easily the largest breakfast category in the U.S. at $8.5 billion, but sales are slipping.”
In the year ended October 2014, the sale of breakfast cereals in the United States fell by 5 percent — worth over $300 million, Melletin says. The money did not disappear, however, he notes. Instead, it went to “one of the many other types of product jostling for a place at breakfast.”
Many of those other products can be found in the foodservice industry — offered by operators looking to woo Americans in search of a different breakfast experience. Key to attracting those customers, however, is the necessity of making breakfast “easy, affordable and portable,” Tristano says.
For example, cereal may be showing up in other iterations, as is evidenced by Taco Bell's test of Cap'n Crunch Delights — donut holes made from deep-fried Cap'n Crunch Berries, filled with milk icing and sprinkled with cereal crumbs.
“The real story,” Balzer continues, is the growth of takeout breakfast at foodservice operations. “It speaks to the amount of time we have to feed ourselves in the morning.” In 1984 the average American purchased six takeout breakfast meals at restaurants. In 2014, that number had risen to 21.
The stepped-up interest in snacking plays right into the changing trends, notably at noncommercial venues like colleges and universities. Ken Toong, executive director of Auxiliary Enterprises, which oversees 30 dining facilities at the University of Massachusetts Amherst, says the 28,000 full time students at the Amherst, Mass., campus have little time for breakfast, and want something very fast. “When it comes to residential dining, [students] take 10 minutes or less,” he says. “Snacking is a new way of eating on campus.”
The blurring of daypart lines also is impacting breakfast business — particularly among millennials. According to Datassential's Keynote Report, 56 percent of those millennials polled said they had one morning meal “any time other than breakfast” within the past day. “Millennials are likely to eat breakfast outside of morning hours,” the study says. “Craveable breakfast foods that are readily available and accessible during lunch, dinner or snack times may further drive consumption both at home and away from home.”
Many students turn to grab-and-go items offered in a number of the UMass Amherst's' dining facilities, which includes four dining commons, eight retail centers and eight cafes. Top among the grab-and-go breakfast items are bagels, hot breakfast sandwiches, yogurt/fruit plate, muffins/pastries, breakfast bars, nutritional bars and oatmeal.
In general, Toong says, “Our customers have been reacting well to fresh, hot items, especially cage-free eggs and quality breads. It ties in with what we are learning about millennial eating trends — [they like their food to be] prepared in front of you, portable, responsibly sourced and comfort based.”
At Yale University in New Haven, Conn., students in a rush to get to classes also opt for more snack-oriented alternatives like oatmeal, energy bars, breakfast sandwiches, bagels and pastry items versus sitting down to a more traditional breakfast, says Adam Millman, director of auxiliary operations.
Nevertheless, Millman says, the school is routinely looking for ways to adjust and update its offerings. For example, Yale has been testing a smoothie concept in one of its retail locations as a possible breakfast alternative. Perceived as being more nutritious, smoothies containing fresh vegetables and fruit play into today's students' concerns about health and wellness — particularly among millennials.
Yale dining facilities also are focusing on higher quality items. For instance, the croissants that previously had been offered are being replaced by better quality croissants, which sell for a higher price point. The result, Millman says, is a higher check average and increased participation. “People are willing to pay for it,” he says.
Even when it comes to snacking, students are willing to pay a little more for higher quality and more healthful items, Millman says, noting that students prefer less processed items with minimal ingredients, like granola or protein bars.
“Health and wellness, convenience and portability are important,” he says. “[Students] want something they can take with them to class. Snacking has become a meal alternative … and sitting down for breakfast as we know it has been been replaced by a quick snack.”