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The Most Important Meal All Day

The breakfast opportunity focuses on health, options and customization.

​​By Pat Pape

When McDonald’s announced that its stores would serve a selection of all-day breakfast items 24/7 starting on October 6, the story received the same amount of news coverage as a high-profile Hollywood scandal or an earthquake registering 8.5 on the Richter scale.

Most news stories failed to mention that many convenience stores, such as 7-Eleven, Rutter’s Farm Stores, Nice N Easy Grocery Shoppes and Sheetz, have long offered around-the-clock breakfast foods. “If we sell it, you can get it 24 hours a day,” said Ryan Krebs, director of foodservice for Rutter’s of York, Pennsylvania. “You can get chicken wings at 6:00 in the morning and a breakfast sandwich at 4:00 in the afternoon. People aren’t going to eat breakfast three times a day, but they are going to eat breakfast.”

Hit or Miss?
According to McDonald’s, customers requested the change to a 24-hour breakfast menu, which was served only until 10:30 am previously. But industry insiders speculate that the move was most likely targeted at improving sagging sales in McDonald’s U.S. stores. Whatever the reason, the announcement generated much speculation about the program’s possible outcome.

“I don’t think there is enough of a market for it,” said Jack Cushman, vice president of foodservice at Nice N Easy in upstate New York. “We offer breakfast all the time, but [after 11 am] it’s by request.”

“It could be that there are those who want breakfast all day, and we’ll just watch the trends and see what happens,” said Bonnie Riggs, restaurant industry analyst for NPD Group, a market research company that interviews millions of consumers annually. “My initial reaction is there will be increased awareness and people trying it. After a month or so, I think it will calm back down.”

There are also questions about potential cannibalization of higher-priced items, such as burgers and meal combos, when customers can order a less pricey breakfast item. “Breakfast sandwiches tend to have a smaller ring than other purchases,” said Jeff Lenard, vice president of strategic industry initiatives at NACS. “[Prior to Oct. 6], you could buy a McMuffin at breakfast for $3. But if you went there for lunch, you would spend $7.”

One thing is certain, McDonald’s highly publicized shift to all-day breakfast (albeit a limited menu) reinforces the concept of consumers wanting more control over the foods they purchase and the dayparts in which those foods are available. Combine this with another trend that has been increasing for some time—consumers’ desire for healthier options—and convenience retailers have a potential opportunity.

The Case for 24/7
There are many reasons that hungry consumers want the option of around-the-clock breakfast. One is the fact that business and industry operate 24/7 and many employees have unconventional work hours.

“If you’re located near a plant that operates three shifts, the third shift will want pizza at 3 am,” Cushman said. “A store has to know its customers and whether there is enough demand to sell pepperoni pizza early in the morning.”

Another reason is the reputation that breakfast has for fortifying the individual with nutrients necessary for a productive day. “Breakfast has a pretty healthy halo,” said Rob Ramsey, senior manager, Channel Marketing, at Tyson Convenience in Springdale, Arkansas. “Breakfast is quick, easy and high in protein. That’s why consumers look at it as something they can have all day. They’re getting protein and grains and stuff that they like.”

It’s said that breakfast is the most important meal of the day, and “because people assume breakfast is good for you, having it at 3 pm carries the same weight as having it early,” Lenard said. “It’s not the timing of breakfast that’s healthy, it’s the ingredients. A lot of things we already offer for breakfast can be merchandised to attract the all-day breakfast customer.”

At Rutter’s, which serves made-to-order meals, breakfast buyers can choose indulgent foods, replace them with healthier options or enjoy some of both. The stores allow customers to substitute fruit for potatoes on combo meals. “We also carry turkey sausage and turkey bacon as an alternative to pork,” Krebs said. “Customers can order an egg white patty, if they like, and substitute a 100-calorie whole grain roll for a croissant.”

Making It Happen
While eating breakfast is important to consumers, the business of breakfast is important to convenience stores. “If you have a grill program and you have the space, it could be an easy opportunity as long as you don’t complicate it,” Lenard advised. “Instead of ham on a sandwich, you could have egg on a sandwich. Or egg and ham. The challenge for anybody who wants to do multiple daypart sandwiches in the same daypart is how you execute it. How do you keep a simple menu and develop a simple process for cooking food quickly and getting people on their way?”

Traveling around the country visiting with retailers for the NACS Ideas 2 Go program, Lenard has noticed concern that adding a new menu offering will result in trashing unsold merchandise. “You have to plan to fail for a period of time until customers know you have what they want,” he said. “You must expect higher shrink than you’d normally be comfortable with.”

Ensuring that pre-made, grab-and-go items are available full time is a bigger challenge, said Dana Evaro, vice president of marketing for Landmark Products, an Iowa-based food production company. “They are a little harder to manage because you have to determine if the demand is there,” he said. “For the premade category, operators are more reluctant to extend breakfast into the mid-morning/lunch daypart. But the beauty of the convenience store is the cooler. Premade [breakfast] sandwiches can be thawed and in the cooler awaiting the microwave.”

Lenard agrees. “The fresh food case at the open- air cooler is the biggest game changer in offering more healthy foods,” he said. “Breakfast items fit there very well. Stores can also use the open-air cooler to advertise breakfast items, such as boiled eggs, smoothies and breakfast parfaits that can be marketed throughout the day. A little bit of merchandising will bring them to the forefront.”

Another way to enrich an existing breakfast program without adding extra items is to provide customers with a well-stocked condiment bar featuring spicy, savory and sweet toppings. “I think it started with the roller grill and is expanding,” Ramsey said. “It’s an easy way to let customers customize [their foods] while having a stable selection of products behind it.”

“People will eat pizzas at all times and all day,” said Evaro, whose company sells a wide variety of pizza and calzones. “And we’re seeing a growing demand for breakfast pizza all day. It’s more of a convergence of dayparts; they’re becoming more ambiguous.”

Even if a retailer offers breakfast 24/7, two things must remain unchanged: convenience and consistent quality. Consumers know breakfast and will expect a high-quality product no matter the time of day.

“You can offer it all day,” Ramsey said. “But it’s got to be just as good at different times of the day as it is in the morning.”

Pat Pape spent 20 years in convenience retailing before becoming a writer and communications consultant. Her writing portfolio is online at www.patpape.wordpress.com.



Sitting on the Fence

Health & Wellness Trends and Strategies for the Convenience Store Sector,” a recent report prepared by the Hudson Institute on behalf of NACS, shows convenience stores how to capitalize on the growing trend of consumers seeking better-for-you, more convenient products. More specifically, “the most important meal of the day” presents the healthiest opportunity for stores to exploit.

According to the research, while taste wins across all eating occasions (breakfast, lunch and dinner), nutrition is the highest attribute consumers are looking for at breakfast time. In fact, a nutritious breakfast trumps both convenience and cost.

“Breakfast is a great entry point for convenience retailers to introduce healthier foods,” said Jeff Lenard, NACS vice president of strategic industry initiatives. “Stocking open-air coolers with high-protein foods such as hard-boiled eggs, Greek yogurt with granola and fresh-cut fruit, or offering hot oatmeal and breakfast sandwiches with egg whites, turkey sausage and whole grains can increase the better-for-you value proposition of convenience store foodservice.”

The report also identified five distinct consumer groups, with two most important to convenience store success: the Core Customer, a heavy user of indulgent products and a frequent c-store shopper; and the Fence Sitter, a time-crunched member of the better-for-you consumer group who needs easy access to foodservice.

Breakfast is also the meal occasion where convenience stores can attract Fence Sitters with healthier options.

The NACS-Hudson Institute research showed that 57% of this segment indicates they are eating healthier at breakfast compared to lunch (40%), dinner (50%) and snacking (37%).

“C-stores must understand that solely catering to their declining core audience is not a growth strategy,” the report noted. “Augmenting availability of better-for-you options for Fence Sitters will enable operators to capitalize on robust growth rates in important categories, such as packaged beverages and alternate snacks.”

Foodservice makes up 19% of convenience store sales and 33% of gross margins. Delivering healthier options to the flourishing Fence Sitters group opens up a world of new opportunities, of which breakfast has the greatest potential.