Ingredients & Dayparts | June 2014 | By Lauren Caggiano

Breaking Out of the Mold

When entering a new daypart, particularly breakfast, operators should prepare for both opportunities and challenges.
Quick service restaurants add breakfast menus to draw new customers.
When expanding into the breakfast daypart, Taco Bell focused on offering convenience and a differentiated product. Taco Bell
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Restaurant brands are turning to daypart expansion as they seek new growth channels, with many operators zeroing in on breakfast, the fastest growing daypart, according to The NPD Group. But with all of the opportunities a new daypart offers, it also brings with it operational challenges like added equipment and staffing.

When Taco Bell debuted its breakfast menu on March 27, igniting a competition with McDonald’s in what has been dubbed the “breakfast wars” by mainstream media, the brand’s executives believed it was the right time for the expansion.

“Taco Bell set a bold goal to double its business in the next 10 years, and one of the ways we’ll do this is by making the brand more accessible to consumers at more times of the day,” says Chris Brandt, Taco Bell’s chief marketing officer, in an email.

Brandt says the chain’s increased accessibility is a result of “listening and testing with customers,” in which many expressed a desire for breakfast “with the twist that Taco Bell brings to its menu.”

Taco Bell follows in the footsteps of brands like McDonald’s and Jack in the Box, which both rely on breakfast traffic and have expanded into late-night hours, as well. Quick serves looking to make the same leap into a new daypart can learn from these examples, as well as from brands that have failed at daypart expansion, says Aaron Allen, founder and chief executive of global restaurant consulting firm Aaron Allen & Associates.

Allen says Starbucks is a prime example of the power of unintended consequences to daypart expansion. When the coffee concept rolled out its food program, the offerings overpowered coffee, which resulted in a decrease in drink sales, he says. “Think in terms of relevance of the daypart they’re trying to occupy,” he adds. “It’s not always the best fit.”

Create-your-own pizza chain Uncle Maddio’s is one smaller brand hopping aboard the breakfast bandwagon, testing breakfast pizza, calzones, and sandwiches in the Charlotte, North Carolina, market. The sandwiches and “break-zones” were developed to provide convenient, portable options for early-morning patrons, says Alex Cook, chef at Uncle Maddio’s. They were also developed in anticipation of entering the airport market.

Both Taco Bell and Uncle Maddio’s, like brands before them, focused on convenience and differentiation when it came to menu development for the morning meal, but there’s more to consider beyond what to serve in a new daypart. Allen says brands should ask questions like, Will it be necessary to hire more people? How can new employees feel like stakeholders in this move? Staffing is an important consideration, and it’s critical for personnel to “see it as a good thing, or else it’s doomed from the start,” Allen says.

At Uncle Maddio’s, brand leaders value employees as an investment, Cook says. “We take it upon ourselves to help them grow and mentor them,” he adds.

Brandt says Taco Bell had to invest in training to ensure the success of its breakfast launch. It was important for him to involve all teams in a large-scale training cascade to generate internal excitement for the breakfast initiative.

“Diving into a new daypart takes the dedicated effort of all teams to leverage both a powerful combination of great food and building awareness for a new experience,” he says. When Taco Bell expanded into late night, the training process and internal excitement were similar, Brandt says.

Another consideration brands should focus on is the programming and automation of various technologies, Allen says. Point-of-sale systems, menuboards, sprinkler systems, and music services all need to be adjusted to accommodate new dayparts.

Similarly, Allen says, there are many supply-chain logistics that can cripple daypart expansion when mismanaged. He says brands need to address things like supplier delivery schedules and traffic patterns that are conducive to sales to streamline the supply chain. “That’s something you have to look at for all locations,” he says. “You can never make it too easy or convenient to buy from you.”

Regardless of which daypart a brand targets for expansion, Allen says, a test run allows a quick serve to perfect offerings and operations. Taco Bell first tested breakfast in markets like Fresno, California, and Chattanooga, Tennessee. Uncle Maddio’s test in the Charlotte, North Carolina, market will allow the fast-casual brand to offer breakfast at future nontraditional sites in airports and office buildings.

While the strategic work is necessary, Cook says, operators should also remember the need for more grassroots efforts and promotions that resound with consumers of fast-casual brands like Uncle Maddio’s. He says the pizza chain’s success with daypart expansion is defined not only in dollars and cents, but in the number of units sold.

At Taco Bell, Brandt says, company executives define success by the response to their marketing campaign, which has included TV spots targeting its main competitor, McDonald’s.

“We are thrilled at the consumer response to Taco Bell breakfast, including nearly four million views of the TV spots on YouTube, nearly two billion social impressions, and more than 6.5 billion earned media impressions,” Brandt says.