Abstract
Mintel' s report on the limited-service restaurant (LSR) breakfast market surveys the competitive landscape and recent activity of leading breakfast vendors by segment. This includes coffee specialists, fast casual operators, and burger and chicken chains, among others.
This report provides the tools necessary for considering changes in operations and marketing in order to thrive in the upcoming years. In order to facilitate this, primary research is focused on the habits and preferences of demographics by age and race/ethnicity. Topics covered include food and beverage ordering habits, with 18-34s and blacks exhibiting a sweet tooth in their choices. Other topics include interest in non-traditional breakfasts, what consumers do while eating breakfast, restaurant and dish loyalty, and the relationship between age, coffee consumption, interest in nutrition, and interest in a variety of menu options.
Breakfast is a fast-growing part of the day for restaurant sales. From 2001-06 sales at limited service restaurants, excluding work and school cafeterias, increased by 47%. Growth is largely driven by perceptions of a lack of disposable time, with the majority of meals taken to go.
Groups that drive the market include men, 18-34s, minority groups, and large households. The relationship between breakfast purchases and time constraints is apparent in these groups. One in five 18-34s state that they only have a few minutes for breakfast. The 18-44s are most likely to eat while they commute to work, and adults with multiple children are clearly strapped for time. As a further indicator of how convenience plays a role in breakfast decision-making, sales of breakfast bars increased by 69% from 2001-06. Other factors driving the industry include innovative breakfast offerings, such as new bread choices and premium breakfasts.
The playing field for LSR breakfasts is about to explode with expansion. Dunkin’ Donuts, Jack in the Box, and Starbucks are aiming for an increased presence, while Wendy’s, Taco Bell, and pizza specialists enter the breakfast arena. There is little question that sales growth will not increase in tempo with the extent of new sites offering breakfast, suggesting that increased branding and niche marketing will be necessary to keep or grow market share.
For the purposes of this report, breakfast is a subjective determination made by survey respondents. It is most commonly understood as the first meal of the day, typically eaten between 4 a.m. and noon. It is possible that some respondents to this survey may have understood breakfast to mean any meal ordered from a breakfast menu or consisting of traditional breakfast foods. In this case, breakfast may have been eaten outside of typical breakfast hours.
Limited-service restaurants are defined as any restaurant in which the patron pays before receiving food. This includes coffee specialists, quick-service restaurants and fast-casual restaurants.
Table of Contents
- Scope and Themes
- What you need to know
- Definition
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Highlights
- A growing market
- Burritos, gourmet coffee, and big sandwiches
- McDonald' s, Starbucks, BK, Dunkin' lead industry
- Operators selling humor
- Only a minority eat LSR breakfast
- Age-based trends
- Looking for something new
- Role of kids and gender
- Trends by race/ethnicity
- Promotions and discounts effective with minority of minorities
- Residential expansion and LSR breakfast expansion
- Competition to increase
- The X factor: the budding war on obesity
- Market Drivers
- Overview
- Time deprivation/convenience
- Commute times growing
- Figure 1: Commutes times in the U.S., 1990 and 2000
- Employment
- Figure 2: Size of the U.S. workforce, 2000-05
- Competition from convenience stores
- Figure 3: Number of convenience stores, 2000-05
- Single-serve cereal aims to be car-friendly
- Competition from breakfast bars--the ultimate convenience food
- Differences by race/ethnicity
- Figure 4: U.S. population, by race/ethnicity, 2001-11
- Differences by age
- Figure 5: Growth of the U.S. population, by age, 2001-11
- Market Size and Trends
- Market size
- Figure 6: Total U.S. retail sales of LSR breakfast, at current and constant prices, 2001-06
- Beyond the bun: burritos, bagels, croissants, and biscuits
- Enormous sandwiches
- Coffee, fast casual, QSR segments blurring
- Breakfast all day long
- Premium breakfast
- Market Segmentation
- Overview
- Figure 7: U.S. sales of limited-service breakfast, segmented by type, 2004 and 2006
- Standard LSRs
- Figure 8: Total U.S. retail sales of LSR breakfast, at current and constant prices, 2001-06
- Employer and school cafeterias
- Figure 9: Total U.S. sales of breakfast at employee and school cafeterias,
- Market Overview
- Figure 10: Perceived advantages and disadvantages of segment leaders serving breakfast*
- Figure 11: Selected breakfast menu additions, 2006-07
- Companies and brands
- McDonald' s
- Starbucks
- Burger King
- Dunkin' Donuts
- Quiznos
- Sonic
- Jack in the Box
- Hardee' s/Carl' s Jr./CKE Restaurants
- Panera Bread
- Del Taco
- Einstein Bros. Bagels (New World Restaurant Group)
- Chick-fil-A
- New entrants en route to market
- Advertising and Promotion
- Introduction
- Figure 12: Restaurant ad spending in the U.S., 2004 and 2005
- McDonald' s
- Figure 13: Advertisement: McDonald' s #1
- Figure 14: Advertisement: McDonald' s #2
- Burger King
- Chick-fil-A
- Figure 15: Advertisement: Chick-fil-A
- Dunkin' Donuts
- Figure 16: Advertisement: Dunkin' Donuts
- Panera Bread
- Einstein Bros. Bagels
- Sonic
- Figure 17: Advertisement: Sonic
- The Consumer
- Introduction
- Summary
- The frequent user
- Eating breakfast out
- Figure 18: Use of restaurants for breakfast, by gender, age and household income, May 2005-June 2006
- Party composition
- Figure 19: Party composition, by age, May 2005-June 2006
- Figure 20: Party composition, by gender, May 2005-June 2006
- Figure 21: Party composition, by household income, May 2005-June 2006
- Figure 22: Party composition, by marital status, May 2005-June 2006
- Figure 23: Party composition, by parental status, May 2005-June 2006
- Frequency of eating breakfast out
- Figure 24: Frequency of eating breakfast out, by gender, age, and household income, November 2006
- Figure 25: Frequency of eating breakfast out, by household size and employment, November 2006
- Weekday breakfast restaurant patronage
- Figure 26: Weekday breakfast dining out, frequency by location, by age, November 2006
- Figure 27: Chart: Weekday breakfast dining out, frequency by location, by age, November 2006
- Weekday breakfasts: other demographics
- Weekday breakfasts: 18-34s examined by race/ethnicity and gender
- Figure 28: Weekday breakfast dining out, frequency by location, by age, gender, and race/ethnicity, November 2006
- Weekend breakfast restaurant patronage
- Figure 29: Weekend breakfast dining out, frequency by location, by age, November 2006
- Weekend breakfasts: other demographics
- Menu choices
- Figure 30: Breakfast food preferences, by age, November 2006
- Figure 31: Chart: Breakfast food preferences, by age, November 2006
- Figure 32: Breakfast food preferences, by household income, November 2006
- Beverages frequently or always ordered
- Figure 33: Breakfast beverage preferences, by age, November 2006
- Figure 34: Chart: Breakfast beverage preferences, by age, November 2006
- Figure 35: Breakfast beverage preferences, by household income, November 2006
- Restaurant loyalty
- Figure 36: Breakfast restaurant loyalty, by age, November 2006
- Figure 37: Breakfast restaurant loyalty, by household income, November 2006
- Breakfast time management
- Figure 38: Breakfast time management, by age, November 2006
- Figure 39: Breakfast time management, by age, November 2006
- Attitudes towards health and family and eating breakfast out
- Figure 40: Opinions toward breakfast and health or family, by age, November 2006
- Attitudes towards eating breakfast out
- Figure 41: General attitudes toward breakfast, by age, November 2006
- Exotic breakfast choices
- Figure 42: Breakfast food choices, by age, November 2006
- Figure 43: Breakfast food choices, by age, November 2006
- Nutritional concerns
- Figure 44: Breakfast nutritional concerns, by age, November 2006
- Figure 45: Graph: Breakfast nutritional concerns, by age, November 2006
- Breakfast restaurant selection criteria
- Figure 46: Breakfast restaurant selection criteria, by age, November 2006
- Figure 47: Breakfast restaurant selection criteria, by age, November 2006
- Minority racial and ethnic groups
- Penetration and frequency for eating breakfast out
- Figure 48: Use of restaurants for breakfast, by race/ethnicity, May 2005-June 2006
- Figure 49: Frequency of eating breakfast out, by race/ethnicity, November 2006
- Party composition
- Figure 50: Party composition, by race/ethnicity, May 2005-June 2006
- Menu and restaurant selection
- Figure 51: Menu selection, by race/ethnicity, November 2006
- Figure 52: Beverage selection, by race/ethnicity, November 2006
- Figure 53: Restaurant loyalty, by race/ethnicity, November 2006
- Figure 54: Breakfast time management and activities, by race/ethnicity, November 2006
- Figure 55: Opinions about healthy breakfasts and family outings, by race/ethnicity, November 2006
- Figure 56: General attitudes toward breakfast, by race/ethnicity, November 2006
- Figure 57: Exotic breakfast choices, by race/ethnicity, November 2006
- Figure 58: Breakfast nutrition concerns, by race/ethnicity, November 2006
- Figure 59: Breakfast restaurant selection criteria, by race/ethnicity, November 2006
- Future and Forecast
- Future trends
- The war on obesity
- Overview
- Figure 60: Prevalence of overweight and obesity among U.S. adults, 1976-2002
- Litigation raises public awareness
- What consumers say they want...
- ...may not be what they will eat...
- ...and could result in reduced sales
- More fruit
- Incremental movement toward healthier offerings
- Continued expansion of Hispanic-flavored breakfasts
- Order ahead for fast casual
- A crowded marketplace
- Standing out in a crowd
- Breakfast deliveries to home and work
- Tea: the next coffee?
- Market forecast
- Limited-service breakfast
- Figure 61: Forecast of total U.S. sales of limited-service breakfast, at current and constant prices, 2006-11
- Forecast factors
- Appendix: Trade Associations
