Hailed as the most important meal of the day, eating habits surrounding the morning meal are changing, average spend is up from £7.31 in 2015 to £10.09 in 2016 and busy lifestyles are continuing to drive growth in this lucrative market.
However, despite the increase in average spend the frequency in which people are choosing to eat their breakfast out of home (OOH) is falling, leading to a significant drop in estimated spend from £76 million in 2015 to just £20 million in 2016, a loss of £56 million.
According to data collected by purchasing company Beacon, just 4% of people are choosing to eat breakfast OOH on a daily basis, compared to 11% in 2015. Therefore QSRs need to reconsider their breakfast options and encourage customers to eat out at this potentially profitable time of day.
Paul Connelly, Beacons Managing Director, said “These new figures show a behaviour change at breakfast, where consumers are spending more, but eating out less. This highlights the potential impact that inflationary pressures in the foodservice market are having on the hospitality industry.”
In fact, according to research from global information company The NPD Group, consumers have started to drop more expensive dinner occasions such as lunch, which is down nearly 3% in visit terms. However breakfast appears to be taking up the slack with faster growth since the referendum than before.
NPD UK director of foodservice, Cyril Lavenant, said he expected breakfast to continue to grow faster than lunch, but not to the same extent. He explained “I think breakfast will still outpace lunch because it is cheaper.”
“Consumers are likely to cut back on their lunch spend given the current economic uncertainty, whereas breakfast is still affordable. The channel that is seeing the benefit of this trend is bakery because these outlets concentrate on these two dayparts.”
So how can this shortfall be rectified?
Busy lifestyles continue to drive breakfast out of home according to Phillipa Norton, OOH Marketing Manager, New York Bakery Company. She adds “However customers wishing to treat themselves is still the primary reason for OOH breakfast visits, in the first quarter of 2017.”
“The next most common reason was its role as part of a regular routine or on a work based journey. This demonstrates how important it is that operators include affordable breakfast favourites as well as more indulgent breakfasts.”
Offering breakfast to go seems the most viable option for outlets; rejuvenating menus to cater for the time poor is becoming an industry standard.
QSRs and food-to-go outlets are upping the focus on breakfast. For example food-to-go bakery specialist Greggs, has seen an increase in profits of 7%, in part due to their breakfast offering. Costa (who have recently announced YoY profits of 8.7%) have also appreciated the significance of breakfasts ‘add on spend’, by offering a hot breakfast item for an additional £1. Additionally, global coffee chain Starbucks also upped their game, offering a greater selection of breakfast items to their already plentiful range. Salmon bagels and spinach and scrambled egg boxes offer luxurious ingredients to the consumer on the go.
Focusing on luxurious menu items is one way to encourage footfall in the morning. Tom Noonan, Senior Brand Manager for DaVinci Gourmet, explains “Consumers are becoming increasingly discerning in their purchases so capitalising on the desire to try new flavours is important. Consumers consistently report that they want to indulge, especially when OOH.”
“Kantar research has shown that 60% of consumers want to try new drinks every 60 days, so operators should look to create a constantly changing menu to take advantage of this demand.”
Global fast food front-runner McDonalds has firmly established itself as a leader in quick, on-the-go breakfasts. The creation of their ‘all day breakfast’ in the USA saw the fast food giant’s revenue and profits boosted during this year’s first quarter. Amid increasing competition from rivals and lowering grocery costs, the chain out-performed expectation and saw sales increase by 1.7% as they attempted to bolster economic concerns.
With the popularity of brunch occasions flourishing, the opportunities that lie in the extension of the breakfast period are huge. Operators that lengthen service times and adjust menu choices accordingly at this time of day could also see sales rise.
Healthy and ‘Free-From’ options
Secondly, healthier choices and an increase in foodies have meant that breakfast also needs to adapt to changing diets and health concerns. An increasing number of outlets are incorporating a healthy option or free-from menu into their offerings and this seems to be going down well with consumers.
Tom Mercer of MOMA foods explains “There has been a backlash against faddy diets more recently which used to encourage skipping breakfast as a ‘health benefit’. However, more nutritionists and public figures are speaking out about the benefits of eating breakfast.”
“We are also seeing more variety of healthier and more balanced breakfast options that fit into our evermore hectic lifestyles.”
Kara Foodservice stress the growing need for vendors to offer a gluten free breakfast option on their menu, especially with the emergence of millennials as an influential demographic in this market. They state that millennials are a key customer at breakfast and with 40% of millennials now avoiding gluten as a lifestyle choice, not just a medical one, it is important for vendors to recognise the growing need to offer gluten-free options.
Kara Marketing Manager, Jane Deegan explains “Research has shown that the catering industry is missing out on an estimated 100 million a year by not catering for people with coeliac disease; demand is high as it now affects 1 in 100 people in the UK.”
“There is a great opportunity for OOH vendors to capitalise on this growing market and expand their breakfast offerings; 74% of people stated that they would eat out every two weeks if more gluten-free options were available.”
Also hitting the headlines are healthier alternatives such as avocado toast and ‘cloud’ bread. However temperamental their popularity may be, these unusual choices show that consumers increasingly reach for trends to lead their choices, particularly if these choices are healthy ones. Outlets need to remain aware of these faddy foods and be prepared to offer them, then subsequently drop them, when interest falls.
However, traditional healthy options are still thriving. According to research by Mintel (2017) ‘plant-power’ is flourishing and vegetables are still seen as the ultimate health food. Mintel say this is predominantly because consumers are still finding it difficult to reach their recommended daily fruit and veg intake. Offering juices and smoothies is an easy way to provide nutrient dense breakfast options.
With consumers flocking to try vegetable based ‘detox’ juices and coconut water, there is evidence however that some fruit juices are losing their appeal. In part, this could be due to reports claiming some juices contain more sugar than fizzy drinks. In fact, according to the Brazilian Association of Citrus Exporters (CitrusBR) from 2012 to 2015 orange juice consumption did fall by 100 million litres while coconut water rose by 80 million.
Of course, the new sugar Tax unveiled earlier this year has meant that sugar content is now under the spotlight more than ever. Remaining at the top of health related news agendas, consumers are now educated in this field and reduced sugar options are now a staple for outlets wishing to appeal to those seeking healthy choices and critically, families with young children.
Beverages driving sales
Not only are cold drinks pushing sales, hot beverages continue to be the driving force of this day part. Without a doubt hot beverage consumption, tea especially, is at its most frequent at breakfast. According to research by Tetley, this category contributed a huge 3.4 billion in OOH sales during 2016 with 42% of people choosing it as their favourite hot drink.
Tetley also found that 18% of all breakfast occasions involve tea, while its rival coffee has seen a 4% decline in consumption during this day part. Tea is a key source of revenue for operators and any breakfast or brunch menu would be incomplete without the correct range of teas on offer.
Senior Brand Manager for Tetley, Marshall Kingston commented “Insight shows that consumers are more likely to drink tea with breakfast than any other hot beverage. Catering to consumers’ needs in the morning period is essential to operators looking to capitalise on the growing breakfast market.”
“With 53% of consumers indicating they would spend more on a premium tea, operators should enhance their customer’s morning experience by offering a range of tea blends that stand apart from those they enjoy at home with exciting flavours and food pairings on the menu.”
With innovation in this category growing, hot and cold breakfast beverages are the perfect on-the-go breakfast item, great for encouraging increased spend at this day-part.
According to Tim Noonan of DaVinci Gourmet, teas biggest rival, coffee, is one of the biggest drink categories OOH and is driven mainly by consumers’ increasingly explorative tastes. He explains “Across the UK, many consumers want to enjoy coffee without its natural bitterness, especially younger people and as a result look for a sweeter taste.”
“Introducing the option of flavour combinations to a speciality beverage offer is essential for those operators looking to keep up with the trends.”
Research by Beacon indicated that 25% of people say speciality coffees were their favourite, and 15% said instant coffee topped their list. However with coffee prices seeing increases of up to 4.9% this year due to market instability, opportunities to innovate in the tea market are stronger than ever.
Paul Hodgson of Ringtons Beverages anticipates that the growth of tea and coffee will fuel the food to go sector. He elaborates; “As we continue to pack more and more into the day, our busy lifestyles mean we are increasingly looking for convenient and time-saving ways to optimise our day. Food and drink on-the-go is one trend we as a tea and coffee out-of-home supplier are continuing to grow.”
“No breakfast is complete without a proper tea or coffee and we are seeing more and more clients offering take-away drinks in the morning which are sold by the cup or as part of a ‘meal deal’ i.e. as a food item such as a bacon roll and hot drink for a set price point.”
What is driving the growth in breakfast out-of-home?
“Both health and convenience play a big part in this, with ‘breakfast time’ being regularly cited as the busiest time of the day, especially for families with young children.” Explains Tom Mercer, founder of MOMA foods.
He continues “With Brits now spending longer on their commute, out of home options are in high demand. Convenience is therefore key and reducing both the time needed for preparation and consumption are important consumer benefits.”
“Consumers’ healthy intentions are strongest at the start of the day, so health trends are particularly salient for the on the go breakfast market. The trend of reducing sugar consumption continues too, as well as an increasing focus on gut health which is making high fibre products like oat based breakfasts, key for future growth.”
Tetley Brand Manager, Marshall Kingston adds “It is no secret that out of home breakfast and brunch sales are booming.”
He continues “The number of breakfast occasions have increased by 8.4% to 1.14 billion year-on-year, according to NPD Crest research growth shows no sign of decline with a rise of 31% in spend at breakfast OOH making the total value of the breakfast time occasion out of home £20.2bn.”
How can businesses tap into the breakfast market and add value to their offering?
Becci Eplett, UK Marketing Manager, Huhtamaki UK, explains “Breakfast has long been considered to be the most important meal of the day, and thanks to the ever increasing variety of food choices which are now available to suit this particular mealtime, it is certainly becoming more modern and appealing.”
“According to our commissioned independent consumer research into food to go consumption within the UK, almost three quarters of consumers (73%) buy food to go at least once a week and breakfast is one of the top meal occasions with nearly half of consumers (43%) opting to eat breakfast on the go.”
She concludes “Bakery items are still one of the most popular food choices with the consumers who stated that they buy breakfast ‘to go’ in the Huhtamaki research. In fact morning cakes and bakery items were the third most popular food type bought.”
Paul Hodgson of Ringtons Beverages believes the lucrative coffee market is booming “The coffee market has been growing steadily for the last few years. As well as more people buying coffee for the cupboards at home, there has been a significant shift in the number of people enjoying coffee OOH. In turn, consumer tastes are also becoming more discerning which means food service providers have to be at the top of their game.”
Quality coffee is also a must have, he continues; “In terms of the breakfast hot drinks market, the best method to grow sales is to ensure you have a quality product on offer. After all, customers will vote with their feet and won’t return to a venue which serves a poor tea or coffee. To ensure great tea or coffee is on offer, the most important factor is freshness. Making sure you’re buying a fresh, well grown, prepared and packaged product will ensure quality and in turn keep customers loyal, so research into the best supplier with a proven track service record and quality products is essential.”
“Quick, easy to eat formats that are both healthy and filling are the best way to tap into the market.” Adds Tom. “People want a convenient option that will be nourishing, and leave them feeling satisfied for longer.”
“Also, providing options for different dietary requirement is key. Gluten free and plant based dairy alternative will help maximise incremental sales at breakfast time.”
“Good taste, value and fast service remain the most important factors for breakfast out of home year after year.” Explains Philippa Norton, OOH Marketing Manager at the New York Bakery Company.
“Once these needs are met, it is important to keep customers interested with monthly seasonal specials like new sandwich fillings and new carriers, such as the new Croll , a hybrid product from the New York bakery Co that’s a light pastry, like a croissant, presented in the convenient form of a roll. Croll is perfect for operators wanting to offer consumers something different for breakfast the go.”
With tea remaining a constant in breakfast beverage choice Marshall believes operators should enhance their customers’ breakfast experience to encourage sales, by offering a range of tea blends that stand apart from those they enjoy at home.
He elaborates “Tetley’s envelope range includes blends bursting with natural and intense fruity flavours such as Tetley Green Tea with Mango, which provides a tropical taste explosion to awaken the senses.”
“With berry and lemon flavours being the most popular fruit varieties, the envelope range features a deeply fruity Raspberry and Pomegranate and a zesty Lemon and Ginger.”
Offers are also a great way to add value, as Paul explains; “Items which complement or complete a morning meal are always well received by consumers, so special offers which incorporate a food items such as a bacon roll and a hot drink for a set price tend to be a hit.”
“Offering value for money and a simple ‘pick and mix’ option of food and drink will keep customer numbers up, make service quick for an operator and offer a good return.”
What are the latest breakfast food trends?
As discussed, beverages continue to drive sales when it comes to breakfast, as Paul elaborates “When it comes to hot drinks, tradition still rules at breakfast time, and at Ringtons, we find a classic English Breakfast tea, and a quality cappuccino or latte are the most requested drinks first thing in the morning.”
“We have also found that coupling a hot beverage with a food item is incredibly popular, a breakfast roll or croissant with a hot drink for a fixed price is always well-received and offers customers great value for money, as well as flexibility and convenience. In addition, operators achieve a great return on investment with take away coffee costing as little as 22p per cup.”
People are very driven by the taste and quality of their tea according to Adele Ward, Brand Controller for Clipper tea. She continues; “Traceability is a big priority for consumers, with many favouring ethical brands that are transparent with how and where their products are made.”
“As a company with a long history of ethical tea sourcing and fair trading, Clipper Teas can help venues meet this demand.”
She continues; “The trend for healthier lifestyles is certainly affecting the tea market, which is reflected in the teas being drunk at breakfast time. Consumers are becoming increasingly aware of how specialised teas can have a big health benefit.”
“Green teas for example, give us a good dose of antioxidants and can have a positive impact on our metabolism, blood pressure and cholesterol levels, among other great benefits to our overall wellbeing.”
Luxurious menu items also continue to appeal to consumers, as Phillipa explains, “On the go breakfast formats continue to grow, with Subway and Starbucks both launching breakfasts featuring poached eggs to go earlier this year.”
“Offering breakfasts that work on the go and perform well if being delivered, will shape future development. Products that arrive in first class condition through third party delivery services are increasingly sought after. Bagels are well suited to this because their texture holds well even when holding sauces and salad ingredients.”
MOMA have identified key breakfast trends that continue to push this market forward. Their research has found that convenient ‘on-the-go’ formats continue to drive sales, as does offering ‘Free-From’ menu items. Tom explains “This is turning from a trend to mainstream with 54% of the population buying a free from product in the last year (Kantar).”
“Gluten free has become a mainstream trend with dairy free gaining traction too, particularly with younger consumers, as well as a focus on gut health and core nutritional benefits, for example eating more fibre.”
MOMA also have noticed an interest in protein, which they identify as “growing in traction, but still relatively niche.” Consumers are interested in learning about the benefits of eating enough protein.
Companies such as The Italian Beverage Company have also noted this trend, and offer an alternative to more traditional options. Ricky Flax, General Manager of the Italian Beverage Company explains; “Operators who can offer a healthy alternative to the traditional fry-up are well placed to maximise the breakfast opportunity.”
“Health conscious consumers in a morning rush often want something to enjoy on the run and opt for fruit based grab and go beverages. Our new ‘Add a scoop’ nutritional supplements inject a healthy boost to these breakfast time smoothies, shakes, lattes and yoghurts.”
“This feeds the clean eating trend and allows operators to cater for the growing number of consumers who routinely opt for nutrient packed food options as part of their daily diet.”
“Increasingly customers are looking for healthy and simple food options to go alongside a morning beverage,” agrees Paul. “Diversifying food menus to include porridge, breakfast biscuits and fruit with a drink will increase versatility and meet market demand with minimal risk to an operator.”
He adds; “Similarly, more health-conscious meal-deals are very popular and such food can be coupled with decaf tea or coffee, or even fruit and herbal infusions such as camomile or peppermint which are popular due to being caffeine free and having associated health benefits.”
In terms of equipment what does a QSR/Food to go business need to have to ensure they can offer a breakfast menu?
Tom believes that even the most basic of outlets can offer a full and varied breakfast menu, that will cater to the OOH market. He explains “With lots of products being hand held and ready to eat (e.g. breakfast drinks and bars), even retail units with no food prep equipment can offer a limited range of breakfast products.”
“If hot water is available this opens up to more hot serve options like MOMA instant porridge products.”
“We are seeing a growing number of clients within the food services industry who are focusing on take away options,” begins Paul. “They are also installing self-service bean-to-cup coffee machines which allow the customer to make premium quality and made-to-order coffees including cappuccinos and lattes at the touch of a button.”
“Investment in high quality bean-to-cup machines can be high and maintenance costs need to be taken into account but convenience, optimising resource and long-term benefit often outweigh initial output.”
“Such facilities work particularly well at busy breakfast and lunch times and makes it easier for customers to ‘grab and go’, as they can be positioned virtually anywhere. Staff time is optimised as producing drinks requires minimum staff involvement.”
What packaging solutions are available to allow operators to cater for the demand for breakfast on-the-go?
Huhtamaki, global specialists in packaging for food and drink, establish that the primary objectives of all food packaging are to preserve and maintain the quality, taste and condition of the contents in a food-safe manner.
For over the counter service in bakeries, serving food in an open tray is convenient for customers buying ready-to-eat options that they can enjoy ‘on the go’. Huhtamaki offer ‘Taste’ trays which are suitable for hot and cold foods and have been developed very much with over the counter service in mind.
Becci explains “Our small, rectangular size is grease-proof lined, which makes it suitable for bakery items such as freshly baked croissants and other morning pastries. All sizes feature a scalloped design on one side and an easy grip base to help make eating on-the-go even more convenient.”
“Operators within the fast food and QSR sector are constantly seeking innovation in packaging design with the objectives of improving functionality for an on-the-go society. There has been growing demand to innovate by ensuring all the materials are responsibly sourced and by looking to facilitate responsible disposal without compromising food safety.”
Demand from cafes, restaurants and caterers to find new and interesting ways to communicate with their customers has led to a high proportion of packaging being custom printed. Becci elaborates, “This enables brand logos or promotional messages to be prominently displayed on the packaging. According to research from Huhtamaki; up to 75% of consumers currently buy food-to-go in branded packaging.”
“Packaging which is manufactured responsibly, that is innovative and functionally efficient and that can be disposed of with minimal environmental impact has a very bright future.”
Considering consumers’ busy lifestyle is important when choosing packaging, as Marshall explains; “Catering to these purchase opportunities is essential for operators looking to capitalise on the growing on the go market.”
“The Tetley on the go range has been specially developed for time-pressured and on the move customers, offering a complete solution for efficient takeaway tea service. On the Go cups reduce fuss, spillages and mess; some of the most common tea to go complaints.”
He concludes “The range prevents this as it includes branded cups with double walls for better insulation, sip-lids and drip-free drawstring tea bags – a complete solution for breakfast tea service.
Of course, with consumers now also looking for new ways to be environmentally responsible, offering product with a minimal environmental footprint is a great way to improve your food-to-go offerings. Becci explains “All Huhtamaki paper (hot, cold and vending) cups can be recycled (where appropriate facilities exist). Huhtamaki are a founding member of the Paper Cup Recovery and Recycling Group and are proud to be a member of the Simply Cups recycling scheme.”
“The Simply Cups scheme provides a collection and postal recycling service to aid Foodservice operators within the supply chain to support coffee cup recycling policies and improve environmental credentials.”
“The fibres from our paper cups are extracted and converted into high quality pulp suitable for a variety of uses from luxury papers right through to robust packaging materials.”
What does the future hold for the breakfast sector?
In terms of beverage consumption consumers are becoming savvier and more knowledgeable about how roast, origin, and growing conditions affects the end taste of a coffee. Ringtons expect this to result in an increase demand for more variety of coffee tastes. Paul explains “In a similar way to how people now know a lot more about wine, consumers are becoming coffee connoisseurs and the market needs to be prepared for this. At Ringtons we roast and pack all of our coffee in our own UK factory which allows us to control the full production and deliver fresh coffee to customers within weeks of it being roasted, which also offers greater flexibility to suit our audiences.”
“As a tea and coffee provider, breakfast-time hot drinks have always been a prominent part of our own sales and we have certainly seen an increase in clients within the quick service restaurant market offering a wider range of breakfast options, a trend we think will only grow in prominence as the food service market diversifies as a whole.”
The breakfast occasion has now extended into brunch and this is an important market for operators to cater for, as Phillipa explains, “Whilst media messaging around the importance of breakfast and fuelling your body for the day ahead have played a part, more choice coupled with new and creative menu ideas are encouraging consumers to eat breakfast or brunch out. Brunch itself has become a social occasion and this too is driving growth.”
“Offering customers more choice and the ability to customise their breakfast is the key to success. If you look at cities like New York they’re not just offering one bagel with one or two fillings or toppings, customers can choose from numerous bagels and toppings including a variety of flavoured cream cheese and vegan cheese toppings.”
She continues “Indian, South East Asian, Lebanese and American takes on breakfast are becoming more common. It’s also made breakfast more of a treat and an event helping to drive innovation on brunch menus and attract more customers to the breakfast occasion.”
“Operators need to experiment with new textures and flavours. For example our new Cheese bagels could help to inspire new ideas for breakfast menus - try pairing toasted cheese bagels with Harissa ketchup, bacon and scrambled eggs for a different option that consumers will love.”
Tom can see healthy offerings continuing to open up new opportunities for operators, paving the way for change. “We have seen a resurgence of old favourites being used in innovative ways like nut butters being added to porridge, and yoghurt and oats being used to make overnight oats/Bircher muesli.”
He concludes; “We expect the use of trending health ingredients to continue, with the likes of superfood powders, healthy chocolate spread alternatives, plant-based proteins and charcoal being ones to watch out for.”Tuesday, 1st August, 2017