2014 Burger Brackets Voting is Over

Congratulations to champion Burgatory! Thank you for casting a record 149,789 votes and thank you to A.1. Steak Sauce for making this year’s competition possible.
_________________

Add Value to Menus with Wisconsin Cheese

When you turn your cheese- burgers into Wisconsin Cheeseburgers, you’re not just adding extra flavor, you’re adding the prestige of award-winning quality. Quality your customers will pay a premium for. Click on the logo above or the burger below to visit the recipe page. Try a new Wisconsin Cheeseburger recipe today!
_________________

Subscribe to BurgerBusiness

Enter your email address and watch for an email from us asking you to confirm your subscription:

Delivered by FeedBurner

Hot, Fresh Burger News

Add Community News

You have to be logged in in order to post.

Chains Scramble to Protect Breakfast Business

[3/12 Update: McDonald's is testing fresh-baked muffins, pastries in New England. Read here.]

Ship captains who heard and followed the mythological sirens’ song met with disaster on the hidden rocks. In foodservice that enticing song is about breakfast, a daypart that sounds so appealing but that has proved a shipwreck for some operators. One that is currently hearing the song is Wendy’s, which already tried breakfast once, before foundering and ending its breakfast rollout in 2009. For the last two years, it has been confidently but cautiously trying again, testing and retesting a new breakfast program that is in a handful of markets and just may be rolled out systemwide next year. “We’re going to be aggressive, but responsible,” CEO Emil Brolick said of its deliberative pace.  And Taco Bell hears the sirens, too, having introduced breakfast last month into 800 West Coast locations.

Source: Wendy's/NPD

Breakfast is an undeniably seductive daypart with overall restaurant sales slowly recovering from the recessionary downturn. Wendy’s cites NPD Group data showing that breakfast has accounted for 92% of all quick-service traffic growth over the past five years and that breakfast represents 21% of QSR customer transactions. Conquering mornings has its own special challenges, but Wendy’s wants in.

Those already there are scurrying to protect their turf. As a result, breakfast menu R&D is beginning to rival burgers and pizzas for culinary one-upmanship.  The price of entry is a breakfast menu that’s truly new, interesting and enticing. Me-too muffin sandwiches don’t stand a chance. Brolick, one of the category’s sharpest thinkers, understands that: last November he told analysts, “We want to go out there with an offering that really is very distinctive and the consumers will sense that distinctiveness.”

McDonald's Jalapeño Salsa McMuffin in test

The need to stand out is why McDonald’s is testing a Jalapeño Salsa McMuffin (with muffin or biscuit, bacon or sausage plus an egg and white Cheddar). Jack in the Box introduced Sourdough Breakfast Melts as a morning LTO. Sonic has added a line of breakfast burritos. In New England, where Wendy’s has put its latest breakfast test market, it goes up against powerhouse Dunkin’ Donuts, which moved Angus beef from burgers to breakfast with its Angus Steak & Egg bagel sandwich.  Also in the Northeast is Tim Hortons (previously owned by Wendy’s), with its Bagel BELT (bacon, egg, lettuce and tomato) morning sandwich and more.

Fast-casual chains are developing out-of-the-ordinary, innovative morning items as well. McDonald’s, Starbucks and others added oatmeal, but Einstein Bros. Bagels has a new oatmeal bagel. Così has new Steak & Eggs (eggs, beef medallions, pesto and Provolone cheese) and Costa Mesa (eggs, pico de gallo, guacamole and Cheddar) breakfast burritos. Panera Bread’s latest breakfast sandwich is a Mediterranean Egg White on Ciabatta (with basil pesto, roasted tomatoes, spinach and Vermont white Cheddar) and Corner Bakery Cafe has added a line of Power Panini Thins on thinly sliced whole-grain toast.

Breakfast item pricing. Source: Mintel

Wendy’s thinks it has the goods to do battle with such fare. Its current morning menu is anchored by its Artisan Egg Sandwich. It combines eggs, Asiago cheese, applewood-smoked bacon or sausage and Hollandaise sauce on a honey-wheat muffin. The menu also includes sausage or chicken biscuit sandwiches, a Mornin’ Melt Panini, Bacon Fire Roasted Burrito, new Redhead Roasters coffee and more.

The menu works and the operations components work, so now Wendy’s just needs to get its franchisees to buy in, which means investing in equipment, an expanded labor force and incrementally greater marketing spending. Last month, Brolick told analysts that those franchisees “appreciate that over the past five years breakfast has been the strongest growing daypart. And that when you look out, it’s also projected to continue to be a strong growing daypart, and they understand that.”

Wendy's Artisan Egg Sandwich in test

Data prepared by Chicago-based researcher Mintel for BurgerBusiness.com show that breakfast-item pricing (this average is for menu items, not breakfast transactions) has increased slightly more at fast-casual restaurants than at QSRs. At the end of 2011, breakfast items averaged $4.21 at fast casual, $3.23 at quick-service restaurants. The gap between the two remains at about a 22% premium for fast casual.

Mintel research also finds a 19.4% rise in the number of breakfast sandwiches on QSR menus from 2009 to 2011, and a 28.1% increase on fast-casual menus. The big gainer on QSR breakfast menus have been wraps, up 187% over those three years. In fast casual, wraps show a 19% increase.

Brolick has emphasized that when Wendy’s finally gets in on breakfast, it will have to go all in. That means investing in continual ad support. “If you look at the approach that McDonald’s takes, it’s out there advertising breakfast on an ongoing basis,” Brolick said during the Q3 earnings call. “And we believe to be an important player in that marketplace that, that’s what we’re going to have to do.” It’s going to be interesting to watch.

3 comments to Chains Scramble to Protect Breakfast Business

  • Donna White

    I think we need a good breakfast sandwich. Everyone else is adding burritos to their menus, I think we need to add a sandwich.

  • BlankVerse

    What this article misses is the breakfast price war that’s started, at least here in Southern California. First it was a bunch of chains rolling out 2 for $4 muffins and biscuits. McDonald’s then had a 2 for $3.79 deal and Jack-in-the-Box followed with a 2 for $3.50 deal. Now both Subway and Carl’s Jr. have 2 for $2 deals, which is probably as low as the chains can go.

  • Donna White and BlankVerse are speaking to both ends of the spectrum for breakfast offerings. I think we’ll continue to see offerings at the high and the low end. Interesting stuff, BurgerBusiness.

Leave a Reply

  

  

  

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>