Bring It with Breakfast

“Foodservice is our industry’s biggest opportunity,” said NACS Research Committee member and 7-Eleven veteran Alan Beach at the NACS State of the Industry Summit in April, citing the convenience channel’s perfect fit for immediate consumption, beverage occasions and customization. Eating habits continue to change, he said, adding that people are snacking all day long instead of waiting for breakfast, lunch or dinner. “Food on the go is already 44% of total consumption—it’s growing and will continue to grow,” Beach commented.

Per NACS State of the Industry data, in-store growth for U.S. convenience stores in 2017 was powered by foodservice (22.5% of in-store sales and 33.9% of gross profit dollars), a broad category that includes prepared food—69% of total foodservice sales—as well as commissary foods and hot, cold and frozen dispensed beverages.

If there’s one thing consumers gain from the channels competing for consumer spending, it’s choice. Convenience stores have plenty of competition from quick-serve chains such as Sonic and McDonald’s and fast-casuals such as Panera and Chipotle that continue to boost sales with value menus. And increasingly, more chains are focusing on better-for-you options and clean ingredients.

So, which daypart is the convenience retail channel’s sweet spot? It depends on your market and customers, but there could be plenty of untapped potential with breakfast, including the time of day it’s served and consumed.

Breakfast Anytime

Nothing used to ruin a family road trip like walking into a McDonald’s and finding out that breakfast was no longer available. For decades, parents had to break the news to their hungry kids that the Golden Arches stopped serving pancakes at 10:30 am.

McDonald’s made a huge splash several years ago in announcing all-day breakfast, beginning with the McMuffin and McGriddles. All-day breakfast seemed to be the lift McDonald’s needed to boost same-store sales and complement its McCafé specialty coffee offer and satisfy customers who wanted breakfast fare beyond the morning daypart.

The QSR’s move to deliver breakfast all day wasn’t necessarily a food industry game-changer, in the sense that many convenience retailers already had been catering to their 24/7 customers who work unconventional work hours, such as shift workers and first responders, with around-the-clock breakfast.

Yet even with all-day breakfast menus proliferating limited-service restaurant menus, these foods are largely consumed during the traditional breakfast daypart, per Datassential. Breakfast timing remains consistent between weekdays and the weekend, with most consumption (more than 80%) happening before 10:00 am. Few consumers eat breakfast after midmorning (less than 20%), meaning that “start the day” messaging with breakfast fare continues to resonate with consumers.

A January 2018 NACS Consumer Survey found that more than half (52%) of frequent c-store customers are driving “much more” or “somewhat more” this year than in 2017. These frequent shoppers, defined as 28% of fuel purchasers who shop “daily” or “multiple times per week” at a convenience store, say they are driving an average of 75 miles per week. And one quarter of frequent shoppers (27%) say they generally make purchases at convenience stores between 6:00 am and 10:00 am—suggesting that they stop for food and fuel during their morning commute.

Morning shoppers are loyal, high-volume customers who value store selection and quality. So, for retailers looking to expand their breakfast offerings beyond the traditional “coffee and a donut” and offer fresher, hot prepared foods, the morning clientele likely will be receptive to trying out new menu items.

Mexican flavors also play well in the breakfast space, with Taco Bell taking the lead on putting breakfast-type foods in more hands of on-the-go consumers. Ingredients such as salsa verde, queso fresco, carnitas, barbacoa and chipotle are notable influences on Mexican-inspired fare, with dishes such as migas and chilaquiles showing up on menus, according to market research firm Datassential. The company also suggests that there is greater interest among consumers for breakfast versions of nonbreakfast foods such as breakfast burritos, tacos, pizza—even breakfast lasagna.

Source: CSX

Then there’s “brinner,” a meal where foods typically reserved for breakfast are served at dinnertime. A search for “best brinner” on Yelp reveals restaurants such as Whisk (four out of five stars) in Chicago that features fried chicken and waffles, steak and eggs, and a breakfast burrito on its dinner menu. Some of the burgers can be ordered “breakfast style” upon request, per the restaurant’s website.

Mexican flavors play well in the breakfast space.

For many convenience retailers, if it’s on the menu, then it’s available anytime—including breakfast.

“Our entire menu is set up perfectly for choice and variety, as well as 24-hour availability at all dayparts,” said Ryan Krebs, director of foodservice at Rutter’s. “Though not promoted as such, we offer breakfast meals, a platter that many customers choose to eat during the dinner hours.” At any time of the day, customers build their own platter with a protein (bacon, sausage, turkey bacon, pork belly, beef short ribs, etc.), a starch (biscuits and gravy or French toast sticks), eggs (regular or egg white) and a side such as hash browns or French fries. Also included are toppings: cheese, veggies, salsas and hot sauce.

Breakfast and Health

Convenience stores can capitalize on the growing trend of consumers seeking better-for-you, more convenient products, according to “Health & Wellness Trends and Strategies for the Convenience Store Sector,” a report prepared by the Hudson Institute on behalf of NACS. Specifically, “the most important meal of the day” presents the healthiest opportunity for stores to exploit, the report says.

According to the report, while taste wins across all eating occasions (breakfast, lunch and dinner), nutrition is the highest attribute consumers are looking for at breakfast time. In fact, a nutritious breakfast trumps both convenience and cost.

“Breakfast is a great entry point for convenience retailers to introduce healthier foods,” said Jeff Lenard, NACS vice president of strategic industry initiatives. “Stocking open-air coolers with high-protein foods such as hard-boiled eggs, yogurt with granola and fresh-cut fruit, or offering hot oatmeal and breakfast sandwiches can increase the better-for-you value proposition of convenience store foodservice.”