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As the only daypart with marked growth in the limited-service industry, the breakfast business is hot. It seems that every week brings more news of morning daypart expansion from this or that brand.
Faced with this increased competition, those brands already built around coffee, bagels, doughnuts, and other breakfast goods have had to diversify their menus to get a larger share out of lunch. And industry experts believe that, even among breakfast-focused brands, the future of quick service rests in a successful balance of all-day dining options.
Long known for its doughnuts and line of breakfast sandwiches, Dunkin’ Donuts recently amped up its menu to drive more lunch opportunities. Bakery sandwiches, introduced in January 2012, were the brand’s first attempts at blurring the lines between breakfast and lunch.
“While breakfast remains our core focus, today people are seeking all-day dining options, so we are committed to menu innovation, giving our guests even more choices,” says Jeff Miller, Dunkin’ Donuts executive chef and vice president of product innovation.
Last year, the chain introduced two new lightly breaded chicken sandwiches, Barbecue Chicken and Bacon Ranch, and followed them up with the Grilled Chicken Flatbread Sandwich. These new menu items could also give the brand more staying power as it expands its footprint to the west.
“We know that our guests don’t always have time to sit down and enjoy a complete meal, and that they may be eating at unconventional hours in a clock-less day,” Miller says. “Because of this, we have continued to create menu choices that are delicious and available anytime.”
Burlington, Vermont–based Bruegger’s Bagels is another breakfast brand with more lunchtime menu items in the works. In fact, it just developed a new lunch menu that will launch for a test later this year and will roll out system-wide in 2015, says Judy Kadylak, vice president of marketing. The new lineup includes a possible first for breakfast brands: the Bagel Burger.
“Our bagels make the perfect bun for America’s favorite sandwich, and our burgers showcase both our bagels, which guests can choose from any bagel on our menu, and the burger itself,” Kadylak says.
The Bagel Burger was first introduced in Boston, then Minneapolis. The rollout is now continuing to corporate-owned bakeries, and executives expect to complete the menu expansion at franchised units by early next year. “The response to our burgers has been extremely favorable,” Kadylak says. “Once guests try them, they really like them.”
Bruegger’s has already found success with its core lunch menu, which features salads, soups, and sandwiches—some on bagels and some on other types of bread.
“Offering lunch was a natural progression for us. We have a popular product, a bagel, which has multiple uses, so it is important for us to maximize the opportunity to highlight our main product by showing its diversity,” Kadylak says.
In today’s industry landscape, many quick-serve restaurants have felt the pressure to raise menu prices because of greater pressure at the corporate level to increase revenue, says Brandon O’Dell, president of O’Dell Restaurant Consulting, based in Kansas City, Missouri. However, adding or enhancing a new daypart makes more sense in the long term, he says, especially for morning-centric chains.
Expansion into later dayparts is easier than expansion into the morning daypart because the labor and operating hours are already there, he adds.
“By the time lunch rolls around, all that’s required is assembling dishes and getting them out fast. Bringing in orders and prepping the foods are done early in the morning so the breakfast restaurants are ahead of the game, covering a lot of the overhead necessary to offer lunch,” O’Dell says. “It’s about expanding the menu, spending some money on marketing, and executing.”
It may sound simple enough, and when done right, this daypart diversification could be the life raft to keep breakfast brands afloat in an increasingly crowded pool of competitors.
“Consumers are increasingly demanding,” says Heather Corker, vice president of consumer trends, North America, for Future Foundation, a global consumer trends agency. “The brand that can provide more options to their consumer will likely get that same consumer to return more often, because they know that they can reliably get not only breakfast, but a good, savory lunch as well.”
This past summer, Manhattan Bagel, which is part of the Einstein Noah Restaurant Group, began offering two grilled lunch sandwiches, the Manhattan Cheesesteak and Chelsea Grilled Chicken Sandwich. Sister concept Einstein Bros. Bagels also has a robust lunch menu for a bagel concept, with gourmet sandwiches, panini sandwiches, and bagel dogs available. The Einstein brand is one that’s been ahead of the curve, with a thriving lunchtime business over the last decade, says Clyde Gilfillan, senior operations associate for Synergy Restaurant Consultants.
“Because of the association that bagels have with breakfast, people pigeonhole those concepts into being just for breakfast, so what these companies have done is looked at their core business of bagels and breakfast, and not only expanded their breakfast offerings, but also moved into lunch,” Gilfillan says. “I think it’s a logical transition for them to take a bagel and move that in a sandwich model because it does well.”
O’Dell adds that bagel concepts have been successful because they have the advantage of the existing customer base, rather than having to chase new customers.
“It’s just a natural progression,” he says. “People are already there in the morning and you can just remind them to come back for lunch. It’s easier than trying to remind people there for lunch one day to come back for breakfast the next day.”
Even though companies like Taco Bell, Subway, and even some pizza operators have been clamoring for shares in the breakfast space lately, the lunch daypart is really what has been struggling, and that’s why it’s important to cement a presence now, says Maeve Webster, a senior director at Datassential, a Chicago-based food industry research firm. The downturn in lunchtime traffic has continued for several years now, and that’s hurting quick-service restaurants.
“The focus on innovation at lunch continues to be sandwiches, as well as street food,” she says. “With regard to flavors and ingredients, there’s no real distinction between those growing at lunch and at dinner. At both lunch and dinner, operators are focusing on incorporating more produce into their menus to increase interest, drive higher price points, and create healthier or perceived healthier options.”
O’Dell says the most important part of being successful is being true to the brand, and he cautions companies to steer away from what he calls “menu creep,” which is when an operators continues to add more items until the menu gets too big, unfocused, and unmanageable.
“The danger is that you’re going to put things on the menu that don’t reinforce your existing brand and what people like about you, which can dilute what people feel about you and you could be worse off for it,” he says. “I’ve seen many be unsuccessful because of this.”
That’s something that Bruegger’s takes seriously as it expands into lunch. The Bagel Burger was the brand’s answer to lunch and also an innovative way to approach its core product.
“At the core of our business is the bagel, which is traditionally a breakfast item,” Kadylak says. “It’s what we’re known for, but in order to continue to engage and attract guests, we have to have delicious, high-quality menu offerings that keep guests coming back at every daypart.”