Breakfast demand bolsters foodservice sector

by Bryan Salvage
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CHICAGO ─ Breakfast accounted for nearly 60% of the restaurant industry’s traffic growth over the past five years, according to The NPD Group, a market research company. If not for the breakfast daypart faring better than other dayparts, traffic declines at foodservice outlets over the last two years would have been worse.

For the year ending March 2010, there were more than 12 billion morning meals served at U.S. restaurants, NPD’s foodservice market research shows, and 80% of restaurant morning meals were purchased from quick-service restaurants. During the past five years, morning meal traffic increased an average of 2% per year, comparatively, while lunch visits were flat, and supper traffic declined by 2% per year on average.

“Breakfast has been and is projected to continue to be a bright spot for the restaurant industry,” said Bonnie Riggs, NPD restaurant industry analyst. “A restaurant morning meal serves a variety of needs. In addition to helping us jump start our day, it satisfies the need for convenience, is less costly than other restaurant meals, and is readily available to us.”

Major chains have recently announced expansion into the breakfast daypart after recognizing the importance of the morning meal as an opportunity to capture share as well as build consumer loyalty. One reason for this expansion is that consumers who visit a chain for more than one daypart, tend to be more loyal, more likely to recommend the chain, more frequent visitors, and contribute more volume, according to NPD's QSR Market Monitor, which monitors local market activity for quick-service restaurant chains.

Two of the fastest-growing menu items these restaurant visitors order are breakfast sandwiches and specialty coffee. Both categories contributed to the breakfast daypart growth. Servings of breakfast sandwiches and specialty coffee grew twice as fast as the industry from February 2005 through February 2010.

Servings of breakfast sandwiches are projected to outpace the industry’s growth forecast, according to a soon-to-be-released report by NPD entitled The Future of Foodservice, which provides a 10-year forecast of foodservice trends based on aging, population growth and trend momentum. Annual servings per capita of breakfast sandwiches at foodservice are forecasted to increase to 14 in 2019 from 11 in 2004.

“There is a lot of activity around the breakfast daypart right now, with chains expanding into the daypart, and the addition of breakfast menu items, promotions and deals,” Riggs said. “Currently only one out of 10 breakfast opportunities is satisfied by foodservice, and there are more breakfasts skipped than served in restaurants, all of which means that breakfast is a significant growth opportunity for the foodservice industry.”
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