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The Food Institute Blog

All-Day Breakfast: A Sales Dream or Supply Nightmare?
Posted on September 03, 2015 by Jennette Zitelli

Breakfast is shifting from being the most important meal of the day to the most popular. Breakfast foods are increasingly being eaten more than just in the morning hours, and restaurants and analysts have begun to take notice.

Breakfast grew at the fastest pace among all meals in the year ending May 2015, with a 4% jump at all foodservice outlets, according to The NPD Group. Quick service restaurants were responsible for most of the visit gains at breakfast, and although overall visits declined at midscale/family dining restaurants, breakfast traffic for the segment held steady. Breakfast sandwiches, in particular, can now be found on 61% of all restaurant menus, up 5% from 2010, according to MarketResearch.com. Restaurants are also experimenting with different breakfast sandwich ingredients, highlighting ethnic flavors to draw in foodies and loyal customers.

Back in April, I noted that breakfast holds a lot of potential for restaurant chains, and companies like McDonald's, Taco Bell, and Bob Evans are all shifting their focus to the meal. At that time, McDonald's was still working on rolling out its all-day breakfast concept to all locations, aiming to appease the many fans who requested the change. Now, the chain is finally responding to its "number one request" and offering breakfast foods past 10:30 a.m. It will offer only a limited breakfast menu, including some of its more popular items like McMuffin Sandwiches, Hotcakes, and Sausage Burritos.

This may be great news for Egg McMuffin fans, but it could have some not so positive repercussions across the food industry. Analysts are worried that the menu change will exacerbate the existing egg supply issues in the U.S. and may raise prices for consumers. Food companies are already struggling to source eggs after the huge avian flu outbreak earlier this year depleted flocks, and Technomic's Darren Tristano says prices are set to rise even more as consumers stock up for the holidays. This means with McDonald's expansion of its breakfast offerings, the strain on the egg supply will be even more noticeable. It may seem hasty to assume one menu change at McDonald's will make such waves in the whole industry, but this is not the first time such a thing has happened. When the chain decided to bring back its chicken tenders earlier this year, it helped the poultry industry avoid a product surplus. Also, when it started offering apples with its kid's meals in 2000, it became the country's largest buyer and seller of the fruit.

Although the menu expansion is expected to increase McDonald's sales by as much as 2.5% a year, it still remains to be seen whether it can dig the company out of its slump.

Posted in McDonalds   Retail   Eggs   Foodservice   Breakfast  

 

About the Author

Jennette Rowan
Product Manager
The Food Institute

Jennette writes and edits the Food Institute’s annual publications, such as Food Business Mergers & Acquisitions, The Food Industry Review and The Almanac of the Canning, Freezing, Preserving Industries.  She also handles marketing and promotions for books, seminars and the monthly webinar series. Additionally, she writes for the daily news update, Today in Food, and periodically contributes to the weekly Food Institute Report. She has a background in non-profit and environmental marketing, programming and writing, and joined the Food Institute in 2013 with a degree in Communication Studies from Rowan University.

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