Outside Insights | April 2014 | By Guest Author

What’s Fueling the ‘Breakfast Wars’

The morning daypart is heating up, and Taco Bell is in good position to appeal to Mexican cuisine “super fans.”

Quick service breakfast competition competes for restaurant super fans.
Taco Bell's A.M. Crunchwrap is part of the brand's new breakfast menu. Taco Bell
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Competition in the quick-service industry is heating up after Taco Bell rolled out hard-hitting advertising for its new breakfast menu with jabs at McDonald’s that suggest the quick-service leader is not keeping up with the times. McDonald’s, meanwhile, is grappling with recent quarterly results that saw sales at established U.S. restaurants fall at a larger-than-expected 1.7 percent, for which it largely blames the extreme winter weather. Though early data suggest Taco Bell’s breakfast campaign has created some good buzz and awareness, it’s too soon to tell how successful the Waffle Taco and its friends will be and what kind of impact the breakfast menu will have on McDonald’s.

At CivicScience, we wanted to take a look at the fast-food breakfast opportunity overall and see what the data mined from our consumer respondent database told us.

First, we did a quick look at how people responded when asked about breakfast at McDonald’s and at Taco Bell. Not surprisingly, a majority of people (73 percent) have eaten at McDonald’s for breakfast at some point or another, and most (58 percent) said they would go back. Taco Bell, being the brand-new entrant starting in late March, still has a ways to go: Only 4 percent have tried its breakfast based on our data through April 21, 2014, and of those, 3 percent said they would go back. Encouraging is that 24 percent said they haven’t yet tried Taco Bell’s breakfast but want to try it.

Mexican super fans index the highest for fast-food consumption, while Italian food fans index the highest for going out for breakfast

But that’s just some straight polling results. We decided to go even deeper and look at other active questions across our syndicated polling network, and cross-tabulate U.S. respondent populations to see what popped. Is Taco Bell on the right track? Who are the best segments within the breakfast consumer? Are there other opportunities to consider?

Let’s start with the theme of Mexican-inspired breakfast food. Just how popular is Mexican cuisine in the U.S.? We looked for cuisine “super fans,” people who selected Mexican over Italian, Japanese, Thai, Indian, and Chinese when asked, “Which type of food is your favorite?” Mexican ranked second (at 25 percent) to Italian (42 percent). More 35–44-year-olds answered Mexican, and geographically, those living in the Western U.S. were three times more likely to say Mexican compared with those in the Northeastern U.S (probably not a big surprise there).

Then we looked at how those super fans answered other related questions. When asked how often they eat at quick-service restaurants in general, Mexican cuisine super fans are much more likely than other cuisine fans to say one time per week or more. Italian food super fans, meanwhile, go out for breakfast or brunch the most often, with 40 percent saying they go more than once a month. Mexican cuisine super fans come in second, with 36 percent saying they go out more than once a month for breakfast or brunch. But this can include any type of breakfast location, such as diners, finer dining, buffets, coffee shops, etc. So, in general, Mexican super fans index the highest for fast-food consumption, while Italian food fans index the highest for going out for breakfast.

Next we dug into a specific question on how often respondents eat fast-food breakfast on a monthly basis, and found some interesting insights:

  • Most respondents (57 percent) say zero times. As we’ll see later, 61 percent of the population eats breakfast at home anyway.

  • Those ages 25–34 are more likely to say “6+ times” per month.

  • Those living in the Southern U.S. are nearly two times more likely to say “6+ times” per month than those in the Northeastern U.S.

  • People earning $25,000–$49,000 per year answered “4–6 times” more than those earning under $25,000.

  • Among people earning $100,000–$150,000 per year, men answered “4–6 times” three times more often than women.

  • Those ages 65 and over are less likely to eat fast-food breakfast on a monthly basis.

  • Those making $150,000 or more per year are less likely to eat fast-food breakfast on a monthly basis.

And what about the Mexican cuisine super fans? Thirty-eight percent say they eat a fast-food breakfast “4–6 times” per month, which aligns very closely to the earlier statistic about breaking dining frequency. Yet they still rank second to Italian cuisine super fans in eating fast-food breakfast “4–6 times” per month (44 percent). This data suggest that the Italian and Mexican cuisine fans favor fast-food breakfasts when dining out.

We were curious about people’s breakfast eating habits in general. Men seem to be a larger market opportunity for breakfast sales, and the under-25 age group is the least attractive:

  • 19 percent of people eat breakfast away from home.

  • 18–24-year-olds were more likely to say they don’t eat breakfast (yet from the data, you see as they move into the next age group of 25–34-year-olds, fast-food breakfasts seem to become much more routine).

  • Men said they eat breakfast at a restaurant two times more than women.

  • Looking at the responses to this question over a two-year period, there was no discernable trend change, suggesting that aggregate breakfast eating habits do not change over time.

So what can we draw from this data? Breakfast is going to be a competitive market, since data suggest that the number of active breakfast consumers has not been growing. Taco Bell’s Mexican-inspired breakfast menu seems to have very strong potential, given its fans’ affinity for fast-food dining in general, favoring fast food for breakfast, and the overall popularity of the cuisine. Males, Southerners, and Westerners, those earning between $25,000–$150,000 per year, and those ages 25–44 seem to be the hot demo groups for breakfast and/or Mexican cuisine diners, most of whom seem to align well with Taco Bell.

However, the data from the CivicScience InsightStore also seem to show a clear opportunity for Italian-inspired breakfast, or even regular menu offerings, within the quick-service and fast-casual industries. In the meantime, CivicScience will be keeping an eye on how the Taco Bell breakfast questions progress over time in our system, and see if their clever and entertaining Ronald McDonald ad campaigns are paying off.

Jennifer Sikora is vice president of marketing for CivicScience, Inc.