Questions:
1, what is going on here, is this trend innovative and why, and why are the companies doing it?
2, do you think this new trend is good for you and I / the public as a whole? does it make the world a better place?
3, what was the impetus for them to change their models? what are the influences involved?
4, should we invest in these companies? what is the competition and why are these guys different?
5, who is the target market, where are they on the innovation curve and how would you research that market to validate the concept?
Fast and Furious: Americans at Breakfast
As Lifestyles Change, There’s Less Time and More Competition for the Morning Meal
By JULIE JARGON and ANNIE GASPARRO
Breakfast has become the final frontier in the struggle over health, convenience and profit in the U.S. diet.
Starved for growth at other mealtimes, companies like Yum Brands Inc., Burger King Worldwide Inc. and Kellogg Co. are battling to change how Americans start their day. But even as consumers
back away from cereal to experiment with more protein-rich foods, their habits remain otherwise entrenched: most Americans still eat breakfast at home and follow morning routines more rigid
than during the rest of the day.
“People are time-pressed in the morning and know exactly where they’re going, and that doesn’t vary much,” said Alex Macedo, Burger King’s North American president, in a recent interview. That
chain claims 2.8% of the $47 billion spent each year on fast-food breakfasts in the U.S., according to brokerage firm Sanford C. Bernstein & Co. This year it started offering its value-menu items at
breakfast and added burgers to the morning menu in an effort to boost sales.
Many fast food and fast casual restaurant chains smell opportunity around breakfast. Of consumers who eat out at least twice a week, 30% say they do so for breakfast, compared with 40% for
lunch and 50% for dinner, according to Bernstein.
What’s more, breakfast is generally more profitable, restaurant companies say, because the ingredients are less expensive. Bernstein estimates that breakfast accounted for about 25% of
McDonaldCorp.’s revenue last year and 40% of its pretax profit.
Yet the standard American morning leaves little room for branching out. The leisurely scene of decades past—sipping a glass of orange juice, scanning the newspaper—has given way to an
average of just 12 minutes a day for consuming breakfast, said Harry Balzer, chief food industry analyst for research firm NPD Group Inc. That is about half the time they spend on lunch (28
minutes) or dinner (24 minutes).
Societal shifts have driven the time-starved nature of the morning meal. More mothers of young children are in the workforce, putting additional pressure on families to prepare breakfast, drop
off the children at day care or school and get to work. Last year, 57.3% of mothers with children under the age of one were in the workforce, up from 53.7% in 2003 and the highest level in almost
16 years, according to the Bureau of Labor Statistics.
In addition, baby boomers are continuing to work, placing constraints on the morning routines of America’s most populous age group. Nearly half of working baby boomers say they don’t
expect to retire until they are 66 or older, including one in 10 who predict they will never retire, according to a recent Gallup poll.
Taco Bell, a unit of Yum Brands, is trying to entice consumers to create new habits with menu items that are convenient but—in keeping with its brand identity—defy the trend toward healthier
eating. The chain bet big in March on a new waffle taco to kick off its first national breakfast menu, which also includes Cinnabon sweet rolls and the 710-calorie A.M. Crunchwrap with sausage.
When Yum reported earnings last week, CEO David Novak said breakfast is already profitable and that he expects the breakfast business to add from $70,000 to $120,000 in annual sales per
restaurant.
Others have reported mixed results. Subway, the sandwich chain owned by Doctor’s Associates Inc., launched a national breakfast menu in 2010, but it accounted for just 6% of revenue last year,
according to Bernstein. Wendy’s Co. last year pulled the plug on plans for a national rollout of its latest attempt at breakfast, saying it wasn’t profitable enough.
McDonald’s was the forerunner of fast-food breakfast with the creation of its Egg McMuffin in 1971 and still dominates the category. It had $8.96 billion in breakfast sales last year or more than
19% of the U.S. market, according to Bernstein. Because McDonald’s launched breakfast so long ago, the chain has been able to integrate itself into Americans’ morning routines better than some
of the newer entrants.
But some consumers still have a hard time with the idea of a fast-food breakfast. “I’m a creature of habit and I eat pretty healthy and I like to control that,” said Kim Sullivan, an Orange County,
Calif., resident who heads marketing for an event planning trade group. “Plus, I’m on a big time crunch in the morning and none of those places are on my route.”
Dunkin’ Brands Group Inc., which gets nearly 80% of its sales from breakfast, is retooling its approach to emphasize healthier fare. The chain is focusing more on breakfast sandwiches, which are
selling better than doughnuts, said Dunkin CEO Nigel Travis. “Our highest margin item is beverages, but breakfast sandwiches aren’t far behind.”,” he said in a recent interview.
Dunkin also is redesigning prep stations to be faster to meet busy morning schedules. Shaving a few seconds per order can push more people through the drive-thru, Mr. Travis said. “People don’t
want to sit in the drive-thru lane and wait for their breakfast.”
In grocery stores, what sells well are foods that are fast to prepare, highly portable and high in protein. Sales of frozen hand-held breakfast items such as Jimmy Dean biscuit sandwiches and
ham-egg-and-cheese Hot Pockets in the U.S. surged 29% in the last two years to nearly $1 billion in 2013, according to market research firm IRI. Similarly, Mondelez International Inc. has found
success with its Belvita breakfast biscuits. And the hunger for protein has driven booming sales of Greek yogurt for Chobani Inc. and others.
The big loser in all this is cereal, long one of America’s most popular breakfast foods. Not only does it struggle to compete on convenience, but a low-carb, high-protein shift among consumers is
making cereal consumption soggy.
Cereal is still about a $10-billion a year industry, but consumption has been declining. “The breakfast occasion has become crowded,” Kellogg’s Chief Executive John Bryant said in a recent
interview. “We are competing with quick-serve restaurants more, but the bigger driver is that people want more protein.” Kellogg and other big cereal makers like General Mills Inc. say they need
to do a better job “reminding consumers” that with milk, cereal too can be a high-protein breakfast.
How consumer perceptions
and corporate strategies shape the U.S. diet.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET AN AMAZING DISCOUNT 🙂