Early Decisions
All of foodservice seems to have its eyes on building breakfast business. Kristina Buchthal
By Kristina Buchthal, Senior Editor -- Restaurants & Institutions, 6/15/2006
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As per-store sales improvement moves ahead of new-unit growth as the preferred strategy for many foodservice operators, identifying untapped markets becomes increasingly important. That hunt for growth leads many operators to the same daypart: breakfast.
Mornings generate 19% of restaurant traffic, versus 34% at lunch and 32% at dinner, with evening snacks accounting for the remainder, according to data from Port Washington, N.Y.-based NPD Group. Quick-service restaurants have led the charge to broader and higher-quality morning menus. The Washington, D.C.-based National Restaurant Association says 56% of QSRs serve breakfast and about half expect the daypart to account for a larger percentage of per-store sales this year than in 2005. Expectations are lower for growth of lunch and dinner sales.
McDonald’s, which already has a strong morning daypart (as much as 25% of sales according to estimates), has added foods such as McGriddles and upgraded coffee. Burger King, Carl’s Jr., Del Taco and others also have switched to bolder brews. Pizza power Papa John’s is testing omelet breakfast pizzas and coffee king Starbucks is trying a variety of upscale breakfast sandwiches in a few markets (see “Brewing Breakfast,” p. 40). No longer wanting to be left out, Wendy’s International has announced plans to add a systemwide breakfast program next year.
But the daypart can be tricky. Creating distinctive breakfast foods that commuters can grab and gobble in the car isn’t easy. Staffing and training for time-critical breakfast service is another challenge.
However, the rewards of making morning business work can be powerful. At Purdue University in West Lafayette, Ind., Memorial Union Dining Services increased sales by more than $300,000 over 12 months by adding a unit of Seattle-based Starbucks to its offerings.
“We were already brewing their coffee” in other areas of the food court, says Gary Goldberg, director of dining services at Memorial Union. “It’s been unbelievable. We’ve joked that we should open another one down the hallway. Breakfast is still our most untapped time of day.”
The same is true for many operators, who find that with fixed rent and other expenses, it is more cost-effective to generate breakfast business than remain closed all morning.
Pizza for Breakfast
Happy Joe’s Pizza & Ice Cream has found that it can increase sales by making its signature food into a breakfast item. The Bettendorf, Iowa-based chain has introduced breakfast service at six of 65 locations. As the company continues its planned expansion, every restaurant with in-store seating will feature the breakfast menu, says Kristel Whitty-Ersan, marketing director and daughter of founder Joe Whitty.
Happy Joe’s serves a limited breakfast menu that includes cinnamon rolls, caramel pecan rolls, potato-and-egg skillets and omelet pizzas, which are pizza crusts brushed with butter and topped with meats and vegetables, scrambled eggs and cheese.
Whitty-Ersan says that breakfast currently accounts for just 5% of sales at its flagship store in Bettendorf. But the additional sales already are a boon, because they don’t require employees to arrive much earlier than they would to prepare for lunch service.
“So far, we can go with the same ingredients,” Whitty-Ersan says. “We prepare breadsticks, cheese sticks and cinnamon sticks with the same core base of products. Breakfast is risky, but you have to venture out to improve business.”
By selling breakfast pizza, Happy Joe’s also has found a new delivery market, local businesses that want to provide breakfast for large groups for morning meetings.
“They can call in with a credit card and we deliver breakfast to their meeting or their open house,” Whitty-Ersan says. “They don’t have to schlep all this food around.”
As the chain’s breakfast offerings become more well known, some Happy Joe’s locations are adding a Sunday brunch buffet with an expanded menu, which is popular among families because of the casual pizza-parlor environment and $7-per-person price point, Whitty-Ersan says.
Healthy Business
Simply revamping a breakfast product line can generate buzz and attract repeat customers. At Concord Hospital in Concord, N.H., the foodservice department reinvigorated retail breakfast operations by replacing such standards as deep-fried hash browns and pork sausage. The hospital began serving turkey sausage, oven-baked potatoes, low-fat cheese, trans fat-free buttery spread and fat-free coffee creamer.
The hospital also filled its salad bar—which hadn’t been utilized for breakfast—with low-fat yogurt, fresh fruit, granola and vegetables for a design-your- own omelet station. Customers select any combination of 15 different fresh ingredients. The omelet is cooked to order with choice of eggs or egg substitute and low-fat cheese.
The switch was intended for nutrition purposes, but it has increased breakfast sales by 15%, even though prices—and portions—have been reduced, says Tom Serafin, director of food services.
Prepared to have some retail customers balk at the new health-focused menu, the hospital promoted its new offerings with three days of free tastings when the items were introduced.
“The first three days were an exciting, dynamic time,” Serafin says. “I got a lot of feedback from people who said, ‘I can eat in the cafeteria now because what you’re offering is more consistent with my lifestyle.’”
Time and Place
The adage “location, location” also rings true for breakfast service.
Bojangles’ Famous Chicken ‘n Biscuits, a Charlotte, N.C.-based chain of fried-chicken restaurants, has sold breakfast sandwiches, such as the Southern Filet Chicken and Biscuit, since it opened more than 30 years ago. The sandwiches, sold all day, represent 38% of Bojangles’ systemwide sales—the chain’s largest daypart. The company attributes its success to its unique products, but also to its strategy for its drive-thru locations.
Most of Bojangles’ breakfast sandwiches sell between 7 a.m. and 10 a.m. So the company tries to locate units on the side of the street that gets the most inbound commuter traffic. Its theory is that because most commuters are in such a rush to get to work, they won’t cross lanes of traffic to get to a restaurant drive-thru to buy breakfast, says Tom Lewison, president and chief operating officer of Bojangles’.
“If we are on the going-to-work side of the street, we’ll have strong breakfast sales. If we’re on the going-home side, our breakfast will still be good, but we’ll have a strong dinner daypart,” Lewison says. “But if we are on the inbound side, people who are on the way home will take time to make that turn to pick up chicken for dinner.”
Once Bojangles’ has a customer in its drive-thru, it tries to be as efficient as possible—especially at breakfast. Where the chain aims to get each lunch or dinner customer through the drive-thru within two minutes from the time an order is placed, it tries to get each breakfast customer through the drive-thru in less than 90 seconds.
“In the morning, people are on their way from one place to the next and they don’t want to wait before they get back into traffic,” Lewison says.
Upscale Eggs
Independent restaurants, too, have found that by offering products otherwise unavailable in a market, they can develop loyal clientele.
Café Patachou in Indianapolis opened its first location 17 years ago, serving omelets made with unique ingredients—such as crab and avocado, locally made cheeses, and eggs delivered daily from nearby farms. Patachou also makes its own granola daily using a recipe that includes hearty oats, dried cherries, dried bananas, currants, maple syrup and brown sugar.
“I opened this restaurant because I couldn’t find one like it. I was looking for the longest time for something that served healthy food with good ingredients—food that was actually like homemade,” owner Martha Hoover explains.
Hoover says that she’s been wary of expanding too quickly, but her three restaurants have become so popular with breakfast diners that she plans to open fourth and fifth locations in Indianapolis.
As business has grown, her philosophy on increasing breakfast business has been the same: Don’t change a good thing.
“I modify the menu every six weeks, and no matter what I add or take off, I never play with the omelets,” Hoover says. “People love the omelets. We have to have them.”
Let Them Eat Croissants
While Bojangles’, Happy Joe’s and other chains are trying to differentiate their breakfast offerings from the coffee, bagels, muffins and egg sandwiches already crowding the market, some non-commercial foodservice operators find that their best bet to build breakfast business is to jump into the competitive fray.
Later this year, Purdue will add five new dining concepts in Memorial Union. With the Starbucks location thriving, the remodel will focus around growing breakfast sales as a way to increase revenue.
Three of the five new locations will feature breakfast, Goldberg says. The locations will be fast-casual in style and feature in-store seating, replacing the student union’s previous food-court-style common seating.
“We’re struggling to figure out which ones should not serve breakfast,” Goldberg says. “The Mexican concept could do very well with a Mexican-style breakfast.”
Another new concept—Flat Breads—is modeled after Panera Bread restaurants and will offer a premium coffee, pastries and freshly baked bread items and breakfast sandwiches.
“I see everyone walking around here, coming in with Einstein’s bags and Panera cups,” Goldberg says. “If you don’t respond to that, people will go somewhere else.
“I’m selfish. I want them to buy breakfast here.”
Brewing Breakfast
A cup of Starbucks is a morning routine for many consumers but the chain has only recently gotten serious about trying to feed them hot meals. Last month, Chicago became the fifth city to offer a line of hot sandwiches, a move that likely will prompt strong defensive moves by McDonald’s, the original breakfast champion.
Seattle, Portland, Ore., San Francisco and Washington, D.C., already have the five sandwich varieties in the test; sausage, egg and Cheddar on English muffin is the most similar to the Egg McMuffin. Starbucks also menus a turkey-bacon sandwich with cholesterol-free eggs and reduced-fat cheese, and an egg sandwich with baby spinach and Havarti cheese. Priced at $2.95, all are heated in countertop ovens. Unlike most QSR breakfasts, Starbucks sandwiches will be available all day.
Company spokesman Alan Hilowitz says a timetable for launching breakfast sandwiches in all stores hasn’t been set.
“We’re looking at each market individually,” Hilowitz says. “When we do introduce a new menu item, or anything new, it is to enhance our core. Our core is coffee and new food has to complement it in some way.”
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