by Pat Pape
They are hassled and hurried, time-challenged and over-scheduled. They have people to see, things to do and miles to go before they sleep. They are stressed, under duress and probably hungry. They are the millions of morning commuters on their way to work or school, seeking a sip of caffeine, a bite of breakfast and extremely fast service.
According to a national study recently released by the Traffic Institute of Texas A&M University, 12 percent of commuters in the largest metropolitan areas travel more than 60 minutes one way to their jobs every day. A 2006 survey indicates that the average work week for Americans is 54 hours, with only 14 percent of Americans working 40 hours a week or less. What that means is less time for meal preparation and leisurely dining, especially during the morning rush hour.
“Because of the increasing price of real estate, more people are living farther away from the city center,” said David Bishop of Willard Bishop, a Chicago-based convenience retailing consultant. “They are leaving home earlier [in the morning], and that has driven breakfast from being a meal eaten primarily at home to a meal eaten in the car.”
As a result, when adults do take the time to eat breakfast, they are most likely to choose something easy and quick. According to The NPD Group, consumers describe only 38 percent of their breakfast meals as a “full or complete meal,” 45 percent of the time it is a “small or mini-meal,” 5 percent of the time it is more of a “snack,” and 11 percent of the time it is a beverage-only experience. More than half of all breakfast meals are devoured in 10 minutes or less, said NPD, with the majority of breakfast consumers dining alone.
“The driving force in our eating habits has always been convenience,” said Harry Balzer, vice president of The NPD Group. “The only surprise is how that will manifest in our behavior.”
The breakfast-on-the-run lifestyle has created a lucrative market for portable food that can be eaten with one hand while keeping the other on the steering wheel, computer keyboard or telephone receiver. Although the morning commuter may prefer a healthy, wholesome breakfast, the major consideration continues to be speed of service.
“Individuals are still looking for things they can grab and go,” said Joseph Trover, CEO of Landshire Sandwiches, a Belleville, Illinois-based company that produces a variety of breakfast items, plus muffins and other breakfast breads, for the convenience store industry.
“Fast and portable are still the number one requirements [for breakfast],” agreed Steve Keane, sales and merchandising director for the 850 7-Eleven stores in Texas, Colorado, Utah, Arizona and Southern Nevada.
At 7-Eleven, more than 30 percent of the chain’s customers shop between the hours of 5:00 and 10:00 a.m., and many of them are looking for a quick, ready-to-go breakfast. “Customers are more demanding and savvy, and they have many choices. Maybe because of the rising costs of things like gas and cigarettes, we are seeing concerns about value and quality. They also are concerned about whether it’s good for them,” Keene said, adding that while 7-Eleven serves held-hot breakfast sandwiches and a.m. grill products, customers can also choose from yogurt, packaged fruits and fresh bananas.
Landshire’s Trover agreed that not all the to-go breakfast products on the market today are particularly healthy, “but eating breakfast is healthier than not eating breakfast,” he said. “And there is still large growth potential when it comes to getting Americans to eat breakfast. We must make it available to more people.”
A good coffee program is just the thing to bring in that breakfast crowd. The NPD Group reports that servings of coffee at commercial foodservice outlets (of all forms and types) have increased by 12 percent since 2001.
“Coffee and your hot-dispensed beverage program anchor your breakfast foodservice program,” said Bishop. “Coffee is your keystone. It is a very effective way to draw people into your store, and if you have a great program, over time, you’ll develop a following. The hot-dispensed beverage consumer will visit your store frequently — almost every day, in fact.”
Well aware of the importance of coffee, 7-Eleven stores in the south central part of the United States recently introduced “Exclusive Bold” coffee. With a heavy, “coffee house” taste, it is the strongest coffee ever sold by the chain. According to Donald Driver, 7-Eleven category manager for hot beverages, “Sales of the darker varieties have doubled at 7-Eleven stores. Flavored coffees are also very popular and vary by region.”
More than 70 percent of all a.m. Quick Chek shoppers leave the New Jersey stores with a cup of coffee in hand. “Coffee is our number one driver. We have great loyalty with our coffee,” said John Schaninger, vice president of sales and merchandising for Quick Chek. “Of course, customers want something delicious to go with it.”
Bishop agrees and suggests that store operators merchandise morning food items across from the coffee bar. “If a customer comes in for coffee, the average visit is about two minutes,” he said. “Locating food products across from your coffee is a good investment.”
While coffee may be the primary breakfast beverage, it’s not the only one. The NPD Group notes that consumers eating breakfast outside the home order soft drinks with 15.1 percent of their breakfasts, a figure that’s up from 7.9 percent in 1990.
Probably the biggest boost to the portable breakfast business came in 1973 when McDonald’s introduced the Egg McMuffin. Since then, demand for that style of easy-to-eat breakfast sandwich has grown, accounting for 32 percent of all portable breakfast items in 2004.
Today, many convenience retailers sell breakfast sandwiches. To build on the success of that program, manufacturers are working to develop new breakfast selections or take a unique twist on traditional items to entice morning commuters.
Recently, Sara Lee Foodservice introduced three distinctive breakfast items, according to Dawn Molski, senior customer marketing manager for the company. “For each category, we tend to do separate research, both consumer and operator,” she said. “Customers are already going to convenience stores for coffee, and we wanted to leverage that with something unique and portable.”
“The Big Jimmy” is Sara Lee Foodservice’s bigger, bolder hot breakfast sandwich and “Stuffins” are warmed golden pancakes available in three savory and three sweet varieties.
For something a little more unusual, Sara Lee Foodservice’s new “Hot Breakfast Smoothie” comes in two flavors: brown sugar and mixed berry. More than just another portable drink, it contains folic acid, iron and 12 other vitamins and minerals, the same amount of calcium as a serving of yogurt and the same protein as one egg. “Women in particular gravitate toward this item,” Molski said. “They see it as a meal replacement.”
Moving beyond the warming oven, some convenience retailers have invested in facilities that allow customers to order breakfast sandwiches made to their own specifications and even provide them with a comfortable place to sit and enjoy their meal.
“Our breakfast program offers fresh, made-to-order items — not something sitting on a steam table,” said Keith Boston, director of culinary development for Pennsylvania-based Sheetz stores. Sheetz shoppers can have cooked-to-order eggs, along with sausage or bacon, placed on an assortment of breads.
“Customers can order a biscuit one day and a croissant the next,” Boston said. They also create their own toppings from five cheeses, mayonnaise, mustard, tomatoes, peppers and “whatever else they want.”
Quick Chek stores also offer made-to-order breakfasts at the stores’ sandwich counters. Customers can choose from the most popular breads in the region, including Kaiser or Portuguese rolls, for carrying their eggs and breakfast meats. But if they don’t have time to wait, customers can select something from the warmer and be on their way. “I think people are going to save time where they can, and that’s our strength,” said Schaninger. “We need to be in the path of busy people.”
Breakfast is McDonald’s best-performing daypart, and company officials have hinted that the QSR may start offering breakfast selections around the clock, although some industry experts aren’t convinced that this idea is feasible.
Even if McDonald’s should launch breakfast 24 hours a day, some convenience operators have beat them to the punch. Both Sheetz and Quick Chek offer their made-to-order breakfast menu all day, along with the traditional selection of subs, hot dogs, hamburgers and chicken sandwiches. Other chains have “heat-and-eat” breakfast sandwiches available for the customer who wants sausage and eggs at 6:00 p.m.
Since breakfast food is often comfort food, the concept of all-day breakfast is a practical idea. According to The NPD Group, servings of breakfast foods were up 64 percent in 2006 over the previous five years, and 44 percent of breakfast food servings at major family-style chains were eaten at dayparts other than the morning. During 2006, however, only 7 percent of breakfast servings at QSRs were consumed during non-morning meal times, probably due to the fact that few quick-service chains rarely serve breakfast past 11:00 a.m.
Overall, breakfast away from home is a huge business. According to Packaged Facts, a division of Market Research Group, the $65 billion breakfast industry, including traditional, sit-down dining establishments, will grow to $83 billion by 2015. Obviously, opportunities in the breakfast arena still exist, especially for convenience retailers, but competition from a diverse group of competitors is increasing.
Jack Cushman, executive vice president of food services for Nice N Easy Grocery Shoppes headquartered in Canastota, New York, describes today’s morning-rush retail situation as “the breakfast wars.”
“Something happened 15 years ago — Starbucks,” he said, and “now they’re rolling out breakfast sandwiches.” Currently, the available-all-day menu includes egg-based sandwiches on English muffins, which are brought into Starbucks ready to be warmed in the store oven.
The king of coffee shops is not the only retailer making a grab for the breakfast business. Subway first tested breakfast in 2005, and now many of the stores offer sandwiches made of some combination of cheese, eggs, bacon, ham and steak to customers before 11:00 a.m. Several locations have an “Expanded Breakfast Program” that also features French toast and omelets.
Wendy’s, which traditionally has not turned on the lights before lunchtime, recently tested breakfast selections. Company officials liked the results and announced that a new morning menu could boost annual-per-store sales by an average of $160,000 within three years of the launch, a figure some skeptical franchisees have publicly questioned.
Jack in the Box continues to enhance its long-lived breakfast menu with frequent new additions, such as butter biscuit sandwiches, and Taco Bell has tested early morning offerings, like the “Country Breakfast Burrito.”
Dunkin’ Donuts has seen double-digit growth in breakfast sales, according to company officials, with breakfast sandwiches up 10 percent in 2006. But to remain competitive, the stores have been forced to pep up their menus, with unique items like the “Maple Cheddar Sandwich.” Even nontraditional retailers are jumping into the fray. California Pizza Kitchen now offers breakfast pizzas, paninis and omelets at its fast-casual chain, California Pizza Kitchen ASAP, in select markets.
Obviously, the breakfast competitors are tough, and they are out to educate the consumer about their breakfast programs, Cushman said. And on top of that, they are increasing their store count. Recently, Cushman returned from a meeting with Nice N Easy store managers and franchisees where he advised them to “be on your game. When [the competitors] grab market share, make sure it’s not ours.”
Today’s customers are educated and have expectations, Cushman said. “If your store has a weak cup of coffee, they’re going down the street.”
Menu fatigue is another way to send shoppers over to the other side. Nice N Easy offers a basic breakfast menu, but it changes every 60 days. During the cold days of January and December, Nice N Easy will offer “an over-portioned product,” Cushman said, with extra slices of bacon. In the post-holiday months of January and February, the focus will be on lighter fare. “I’m always fishing for new ideas and work with brokers to come up with new products,” he said, pointing to the stores’ popular breakfast pizza topped with egg, cheese, ham, sausage and held hot in a pizza warmer for busy morning customers.
“That’s the exciting thing [about the business],” said Bishop. “Suppliers continue to offer new products and innovations.”
“We need to constantly be aware of what the competitor is doing and reassess what we’re doing. We must reinvest and re-evaluate,” Bishop said. “We have to be committed to building the business by investing in the necessary resources — time, money and labor. We have to advertise, promote and drive trial with in-store sampling and coupons. After all, the convenience store is a logical destination for a lot of things. If we can draw them into the store in the morning, we can sell them other things.
Pat Pape has worked in convenience retailing for 20 years. She currently writes for a variety of magazines from her home in Texas.