Battle for Breakfast Heats Up

sandwichThe competition for the $46.5 billion breakfast business is at a fever pitch with retail giants from McDonald’s and Taco Bell to Starbucks and Dunkin’ Donuts rolling out sandwich interpretations to steal new morning business.

By Marilyn Odesser-Torpey, Associate Editor

Quick-service restaurants are hitting all of today’s consumers’ hot buttons with their latest breakfast offerings.

And it’s only heating up.

With an increasing number of consumers seeking healthier breakfast options, the National Restaurant Association (NRA) named egg whites, omelettes and sandwiches as a growing preference among consumers this year. Both quick-service and c-store menus are loading up their morning menus with lighter fare.

Last year, McDonald’s debuted an Egg White Breakfast Sandwich with Canadian bacon and cheddar cheese on a whole wheat English muffin. Now the fast food giant allows customers to swap whole eggs with just whites in any breakfast sandwich.

In January of this year, Dunkin’ Donuts came out with a sliced turkey breakfast sandwich on multigrain flat bread. Starbucks has since added four breakfast sandwiches including a “new and improved” reduced fat turkey bacon with egg whites and reduced-fat cheddar on an organic wheat English muffin.

Not to be outdone by the fast-food giants, Baltimore-based Royal Farms c-stores this year added to its menu an egg white and turkey sausage on an English muffin with pepper jack cheese, according to Donna Hood Crecca, senior director at Technomic, a market research firm.

And Whitehouse Station, N.J.-based QuickChek brought onboard the Protein Power Breakfast Sandwich featuring egg whites, spinach, bacon and cheese on multigrain flatbread.
Though Royal Farms and QuickChek are serving customer needs, demand for more breakfast service at c-stores also exists.

Crecca said, in general, coffee is still a strong morning sales generator for convenience stores and that many have well-established programs with loyal fans.

Technomic research shows that while over half of consumers report visiting convenience stores to purchase coffee once a week or more often, only 37% say the same for breakfast items. In fact, two of every five breakfast daypart foodservice purchases are beverage-only occasions.

She also noted that half (52%) of consumers say that higher quality breakfast items would entice them to purchase breakfast at convenience stores more often, and 41% want items that are fresher. In addition, Crecca noted, 33% of consumers would like to see healthier breakfast items.

Satisfying Needs
But healthy is not a hot button for every consumer. Quick-service restaurants and c-stores are still offering up indulgent offerings designed to create cravings.
In February, for example, QuickChek aimed for the morning meal sweet spot with its new Cinnabreakfast Supreme Sandwich, an egg-bacon-and-cheese creation on a cinnamon bun, Hood said.

In March, Dunkin’ Donuts introduced a portable Eggs Benedict Breakfast Sandwich with creamy Hollandaise Spread. It has yet to generate the publicity garnered by last year’s debut of the Glazed Donut Breakfast Sandwich with pepper fried egg and bacon—an item that remains on the menu.

March 2014 marked the breakfast breakthrough at Taco Bell. The chain rolled out a Waffle Taco collection of sandwiches featuring eggs, cheese and either sausage or bacon wrapped in a warm waffle and three varieties of A.M. Crunchwraps in which breakfast fixings are wrapped in a tortilla.

Made-to-order all day is one of the keys to the success of the breakfast business at Giant Eagle’s GetGo, which has more than 50 kitchen store locations that offer a menu, within its c-store fleet across western Pennsylvania, Ohio, Maryland and West Virginia, said company spokesperson Daniel Donovan.

To give customers the option of being as health conscious or indulgent as they please, GetGo’s breakfast menu offers made-to-order breakfast sandwiches or burritos with a choice of fresh vegetables and meats, including egg whites, turkey sausage and Canadian bacon.

“With the growing breakfast trend, our made-fresh-to-order breakfast sandwiches are becoming increasingly more popular with customers,” Donovan said.
Quick-service restaurants have always been major breakfast competition for Reid Petroleum’s Crosby Food Stores in western New York and northwestern Pennsylvania, so it’s nothing new for the company to focus on strengthening its morning positioning. Instead of playing catch-up, though, Crosby “has been reinventing our breakfast program to be ahead of the curve,” said Doug Galli, company vice president and general manager.

Since last September, Crosby has been testing elements of a new breakfast program, including using a convection oven that can cook a made-to-order sandwich in 45 seconds. Traditionally, sandwiches have been assembled and baked in the stores and held in warmers on the counter.

The company is also considering a non-patty egg and is planning SKU rationalization of the breakfast menu to gauge variety and customer interest.

“We offer four kinds of breads and a wide variety of fillings that could conceivably make for 25-30 different kinds of breakfast sandwiches,” Galli said. “We will probably scale down the number of SKUs to make the program easier to manage and to promote.”

Galli noted that the new program, expected to roll out in late summer or early fall, will probably feature breakfast all day. Unique items can go a long way to driving morning business. Take the case of kolache sales at CST Brands’ Corner Store c-stores.

A traditional Czech baked sandwich that wraps fillings, such as sausage or ham and cheese in a fluffy dough, kolaches are a favorite all-day food in central and south Texas.
CST Brands is based in San Antonio and has 600 stores in the Lone Star State as well as over 1,000 more across the Southwest.

“Since we introduced them more than four years ago, we have had a lot of success with our kolaches in Texas, as well as in our other markets,” said Richard Poye, the company’s director of fresh foods. “Even if they have never seen them before, people really like the portability of them.”

Poye explained the strong sales of kolaches, even in the area of the country where they are ubiquitous, is because they’re baked fresh onsite.

“A lot of places bring them in frozen and then they reheat them in the oven, but we bake them fresh right in front of our customers,” Poye said. “Some customers line up at 5:45 a.m. to get the first ones fresh from the oven.”

To keep the menu fun and interesting, Corner Store also does limited-time-only (LTO) kolaches. One very popular LTO was the jalapeño sausage cooked in a cornbread batter.
“We sold them much quicker than we had projected,” he said. “Customers still ask for it.”

Breakfast is Booming

While U.S. consumers cut back on their restaurant visits at lunch and dinner in 2013, they increased their visits at breakfast for the fourth consecutive year, according to NPD Group.

Quick-service, which accounts for about 80% of total restaurant morning meals, showed the greatest growth of all restaurant segments, with a 4% increase in breakfast visits over the previous year.

NPD also forecasted a sunny future for quick-service restaurant breakfast sales. They are expected to rise by 9% over the next nine years.

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