Ingredients & Dayparts | April 2016 | By Daniel P. Smith

The Daypart Dance

In a battle for market share, many quick serves are looking to deepen inroads into the traditional dayparts with a host of strategic efforts.
Houston fast casual restaurant Dish Society offers table service at night.
Aaron Lyons founded Dish Society in 2014 as a fast-casual destination by day and full-service option by night. In this way, he says, Dish Society maximizes its potential. Dish Society

Aaron Lyons bucked conventional wisdom.

Whereas many upstart fast-casual players target customers within one or two core dayparts, Lyons launched Houston-based Dish Society in January 2014 with a determined quest to capture diners during breakfast, lunch, and dinner.

“When you’re paying rent and have all of these costs, you better maximize your performance,” Lyons says.

That sentiment continues gaining traction across the quick-service landscape, with established players and upstart brands alike seeking deeper inroads across all three traditional dayparts.

“With the industry flat, it’s a battle for market share, and restaurants are pulling out all the stops to drive performance,” says Bonnie Riggs, restaurant industry analyst at The NPD Group.

Take Modern Market, the 17-unit, Colorado-based chain formerly known as Modmarket.

When Anthony Pigliacampo led the fast casual’s debut in 2009, breakfast wasn’t on the menu. That changed in 2011, however, when the company opened its third store and tested made-to-order breakfast.

With minimal labor deployment, Modern Market captured positive results, and Pigliacampo revised Modern Market’s business plan to include breakfast. Today, the morning daypart accounts for 20 percent of sales at some Modern Market locations and about 50 percent of revenue at the company’s two units inside Denver International Airport.

“We always approached our business from the standpoint of finding revenue levers, and the more levers we can pull, the better,” Pigliacampo says.

It’s a search many limited-service players continue to endure, actively looking for ways to extend business into a different daypart or advance performance in an existing one to propel results.

Breakfast: Where the action is

According to NPD Group data, quick-service traffic for morning meals jumped 5 percent in 2015, and breakfast now accounts for 24 percent of all quick-service visits.

“Even before the recession, breakfast was growing year after year, and it’s a trend that’s held up, which explains why operators are so eager to capitalize,” Riggs says.

Aggressive marketing efforts from the likes of McDonald’s and Taco Bell illuminated breakfast and ignited awareness about eating breakfast outside the home, urging consumers to swap the protein bar or cereal for gourmet coffee, breakfast sandwiches, home fries, and other delights.

Though breakfast brings its share of operational challenges and traditionally lower check averages, as well as mounting competition from convenience stores—many of which have doubled down on morning customers with improved food and drink options—the quick-service field is loaded with breakfast action.

Fast Casual 2.0 concepts have worked to fill the gap between the quick-service drive thru and the full-service diner. Dish Society’s counter-service breakfast, for instance, features farm-to-table ingredients, cage-free eggs, and locally roasted fair-trade coffee, while Modern Market dishes up scratch-made plates like whole-grain waffles and a Southwest Tofu Scramble. Each fast casual has found a niche with healthier, higher-quality breakfast fare rich in vegetables and grains.

Last November, California-based Vitality Bowls, the 25-unit superfood café best known for its signature açaí bowls, installed coffee bars into all of its stores. The bars feature espresso and superfood drinks packed with antioxidant-rich açaí, pitaya, and kombucha.

“We’re not going to compete with Starbucks, but we know coffee is at the core of any sound breakfast program,” Vitality Bowls cofounder Tara Gilad says. “We just had to make it something really different and exciting.”

Simultaneously, many established quick-service concepts have pushed creative twists on traditional favorites, such as Taco Bell’s A.M. Crunchwraps and Waffle Tacos, as well as White Castle’s Belgian Waffle Breakfast Sliders.

The menu momentum continues to accelerate. Earlier this year, Pret a Manger debuted vegan Pret Pots systemwide, a selection of 100 percent gluten and dairy-free breakfast small pots with nutrient-dense recipes, while La Madeleine Country French Café introduced customized open-faced crepes and omelets.

And next year, Tropical Smoothie Café plans to implement its Breakfast All-Day menu systemwide. When the Atlanta-based brand promoted its breakfast offerings during a nine-week run last fall, it scored positive comp sales each week, including eight weeks with double-digit gains. Moving beyond smoothies, Tropical Smoothie will feature items such as the Fresca Verde Omelet Wrap and Peanut Butter Banana Crunch Flatbread.

While menu innovation is expected to persist, especially given the enticing white space many operators see in the morning daypart, convenience-driven service models to address customers’ hurried lives aren’t far behind.

Last September, Starbucks deployed its Mobile Order & Pay option across the country. Customers can order and pay directly from the Starbucks app, picking up their beverage in the store without waiting. And last October, the Seattle-based coffee giant began testing its Green Apron Delivery Service in New York’s Empire State Building, which, as the name suggests, features Starbucks baristas delivering items directly to office desks.

But Starbucks isn’t alone in the morning delivery game. Dunkin’ Donuts and others continue to look to leverage their own team members or on-demand delivery startups like Postmates or DoorDash to secure sales and, ultimately, market share.

“Particularly with breakfast, it takes a while to get into people’s routines, but if you can break in, they’re very loyal,” Modern Market’s Pigliacampo says. “That’s why breakfast is so intriguing from the business perspective.”

Lunch: The need for speed

Lunch has been the longtime linchpin of many quick-service enterprises, especially so at fast-casual eateries, where NPD reports lunch traffic jumped 11 percent last year.

Rejecting complacency, many limited-service concepts have pushed for increased throughput and enhanced menus.

Take the litany of fast-casual pizza players that have turned pizza, once a lunch afterthought populated by buffets and by-the-slice concepts, into an increasingly robust lunchtime category. Make-your-own pie concepts like Pie Five, Blaze Pizza, and Uncle Maddio’s have leveraged technological advancements in the kitchen to churn out custom-made pizzas in minutes. At the Uncle Maddio’s restaurant in downtown Charlotte, North Carolina, for example, staff members serve up to 200 pies each hour during the lunch rush, utilizing high-tech ovens to cook pizzas in six minutes.

With customer acceptance for fast-casual pizza growing, Uncle Maddio’s COO Scott Goodrich says, his team is now laser-focused on speed of service to accommodate on-the-clock lunch diners. The 44-unit chain preaches its 30-second rule to team members—greet a customer and toss his pie in the oven within a half-minute—and has also created two pizza-making lines in its stores: one for in-store customers and a second to satisfy phone and online orders.“At lunch, people need speed, and we’ve got to deliver it,” Goodrich says.

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