Just four decades after introduction of the Egg McMuffin, McDonald’s serves 22% of the restaurant breakfasts in the U.S.
The importance of eggs for breakfast at restaurants in the U.S. is increasing, both in the total number of eggs served and the percentage of meals that include eggs, according to Warren Solochek with NPD Group Inc., a marketing research firm. In 2006, 44% of breakfasts served had an egg dish or 5.1 billion servings worth, and by 2011 this had increased to 47% or 5.6 billion servings.
The U.S. foodservice industry is dominated by quick service restaurants or fast food outlets. Solochek presented Consumer Reports on Eating Share Trends data, which tracks foodservice purchases by conducting daily interviews of consumers, at the International Egg Commission Conference in Washington, D.C. He said that growth in restaurant visits in the U.S. is all in the QSR segment, with 86% of U.S. foodservice visits being made to QSRs. Major chains are vital to the QSR segment with 72% of restaurant visits in this segment to major chains, and their share is growing. Solochek said that one must play with the big QSRs in order to have an impact.
Breakfast at the Golden Arches
McDonald’s started serving breakfast when it introduced the Egg McMuffin four decades ago. “The Egg McMuffin is the perfect intersection of quality, convenience, portability and nutrition,” said Darci Forest, senior director of marketing on the McDonald’s menu innovation team. Five million people eat breakfast at McDonald’s restaurants in the U.S. every day, and two-thirds of them have eggs as part of their breakfast. The company buys 3 billion eggs globally and 2 billion in the U.S. McDonald’s egg sales account for roughly a half-dozen eggs per capita in the U.S., and this doesn’t include the eggs that are used as ingredients in baked goods.
Three-quarters of U.S. breakfasts are eaten at home and this percentage hasn’t changed, but fewer people are skipping breakfast and this has created an opportunity for the food service industry. Competition for foodservice dollars in the U.S. is fierce as the industry has been slowed by the weak economy. Solochek reported that, per capita, annual restaurant visits in the U.S. have dropped from over 200 prior to 2008 to 196 now. Growth of breakfast at foodservice outlets has been at the expense of dinner, and this trend is expected to continue.
Breakfast market leader
McDonald’s has the largest share of restaurant visits for breakfast in the U.S. “Sales of take out breakfasts from restaurants have tripled in the last 25 years,” Forest said. “Drive-thru business is bigger than in-restaurant business for breakfast at McDonald’s and it has been for years.” Convenience and portability have been important aspects of the growth of breakfast for QSRs.
Forest said, “McDonald’s brand promises simple, easy enjoyment.” When describing new products for McDonald’s, she said, “It has to be affordable, portable and broadly appealing as well as food and beverages that our customers feel good about eating. For some it might be getting a hearty meal, for others it might be about restricting calories or fat. It is really important to connect with our customers with both their hearts and minds as well as filling their bellies.”
Looking for innovative products
Warren Solochek, NPD Group Inc., said, “Innovators will succeed; there is no room for more restaurants.”
McDonald’s is looking for foods and beverages that people feel good about, according to Forest, and this means different things for different people, hence variety is needed in the menu. She cited McDonald’s Fruit & Maple Oatmeal as an example of the type of menu innovation that needs to continue, because it has brought in new customers to their restaurants. Forest said that Fruit & Maple Oatmeal has also become part of the Wholesome Breakfast Choices for breakfast promotion along with other 300-calories-or-less menu options, such as the Egg McMuffin, Fruit ’N Yogurt Parfait, and Fruit and Walnut Salad.
Any discussion of breakfast out has to include coffee, and McDonald’s made a big leap into the world of gourmet coffee when it launched McCafe a few years ago. “McCafe allowed McDonald’s to democratize really fancy coffee,” Forest said. Coffee is projected to continue its rapid growth in importance for all restaurants, according to Forest. From 2009 to 2019, the top growth item is projected to be cold specialty coffees with 23% growth and hot specialty coffee is projected to grow by 15%. Breakfast sandwiches are projected to be the category that grows at the sixth fastest rate, 14%.
Solochek said that today’s strongest food service egg consumers go through the drive-thru at a QSR for their morning meal on their way to work, and buy as part of a combo meal or off a value menu. Eggs have a bright future for breakfast, based on food trends reported by Forest. She said that the three big morning food trends are in eggs and egg white products, breakfast sandwiches (with or without eggs), and in products with fruits, grains and dairy (including items like McDonald’s oatmeal and yogurt products).
“Those restaurants offering balanced healthy choices without compromising taste or value are going to be the winners,” Forest said. “We estimate a 0.2% increase in restaurant traffic in 2011 and 1.2% in 2012. To increase business, you really have to steal market share from competitors and to do this you need to innovate. Innovators will succeed; there is no room for more restaurants.”
Growth opportunity for eggs
Foodservice operators and their suppliers have a great opportunity to capitalize on consumers’ increased interest in eating breakfast, according to Solochek. In the next 10 years, NPD expects total restaurant visits to grow at 0.8% per year, but breakfast visits will grow at 1% and sales of breakfast sandwiches will grow at 1.4%.
“Those who stimulate interest with both innovative products and services while addressing the consumers need to feel that they are carefully managing their spending and receiving value will lead others through the recovery period,” he said.
Forest asked for help from egg producers to take advantage of the growth in breakfast away from home.
“We need more egg innovation,” she said. “What are different forms? What are new and different flavors? How do we work with our suppliers to bring new egg products on the scale that we need effectively and efficiently?”
For more information about the consumption of eggs, read “For poultry and egg producers, the customer must be king.”
Senate Majority Leader Harry Reid says Senate won’t pass farm bill extension because it is unnecessary
Variety of speakers to address issues related to increased egg production
Doug Niemeyer has been appointed to new leadership post
Darci Forest, senior director of marketing of the McDonald’s menu innovation team, said, “Those restaurants offering balanced healthy choices without compromising taste or value are going to be the winners.”
--- Thank you for your patience ----
If you have any issues logging in or any other need feel free to contact us.