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Retailers

Industry Waking Up to the Untapped Profitability of Breakfast

Prepared morning foods are overlooked as a profit center and a potential market share gainer
Image: Shutterstock

It has long been known as the most important meal of the day, but breakfast’s potential as a profit generator for supermarket prepared food and deli departments is often overlooked, especially now as consumers increasingly seek morning sustenance away from home.

According to Chicago-based Datassential, lunch makes up the lion’s share (35%) of supermarket prepared food sales, based on the department’s total business sales conducted during that daypart. Dinner is next with 24% of sales, followed by breakfast at just 9%. Snacks purchased throughout the entire day represent a total of 32% of supermarket prepared foods.

However, Datassential also finds that breakfast foodservice drives nearly three times more revenue for on-site operators than restaurants. Grocers who build breakfast programs that deliver on top trends and tastes, including healthy and traditional fare, unique and ethnic offerings, and convenience and portability stand to make major gains in the market share for morning meals.

“A successful retail breakfast program is about meeting the customer where they are and being responsive to the way they live,” says Travis Dryden, senior marketing manager for Simplot, Boise, Idaho. “Consumers will turn to a grocer for prepared foods if it’s as easy as fast food.” They’ll also spend more in the store while there, he adds.

Simplot Shakshuka Sonoran Potato

Simplot’s foodservice-friendly breakfast recipes include African-inspired Shakshuka (left) and Sonoran Potato and Sausage Hash (right).

Photographs courtesy of Simplot

Convenience and portability are essential as consumers increasingly purchase and consume breakfast on the go, but a varied, value-conscious, on-trend menu is equally important.

“More people than ever are interested in eating breakfast out. But most breakfast menus haven’t caught up with today’s trends and flavors. This is a great opening for any operator who wants to stand out and make more money,” says Dianna Fricke, Simplot’s director of culinary and corporate executive chef.

Simplot offers scores of foodservice-friendly breakfast recipes using its potato, avocado, fruit, vegetable and grain products, from Vegan Benedict and Mexican-inspired Sonoran Potato and Sausage Hash to Breakfast Pizza and Middle Eastern/North African-inspired Shakshuka.

“As more grocers are finding a way to use the breakfast occasion to build traffic in the morning, breakfast sales continue to increase just like snacking,” says Dryden.

Offering more healthful options such as egg whites, plant-based proteins, sweet potatoes and vegetarian menu items can also help drive sales, he says. “There’s a perception that the neighborhood grocer is a good place to find a better-for-you breakfast. Offering extended hours on breakfast foods also increases sales,” Dryden adds.

Rise and Shine 

With the slight uptick in consumers skipping breakfast, frequently in favor of a beverage or snack, the breakfast landscape is changing, according to Chicago-based Technomic, WGB’s sister market research firm. “Meeting consumers’ varying and shifting needs for the morning daypart will be crucial to continuing breakfast sales growth,” finds the Technomic Breakfast Consumer Trend Report.

What foodservice breakfast items are resonating most with today’s consumers? Portable ones. Offering quick, portable breakfast options throughout the morning (and for extended hours beyond the traditional breakfast time frame) will help grow breakfast sales, says Technomic. It finds that 33% of consumers agree it’s important for foodservice to offer portable packaging for breakfast items. Think breakfast bowls, burritos, sandwiches and wraps.

nestle professional

Photograph courtesy of Nestle Professional

With this in mind, Solon, Ohio-based Nestle Professional recently introduced Hot Pockets Breakfast Scramble Stix for foodservice operations. This quick, portable snack is filled with scrambled eggs, potatoes, bell peppers and cheese stuffed into a crispy crust.

Unique Meets Traditional 

Not everyone wants to eat the same thing for breakfast. Technomic finds that younger consumers want more unique and ethnic options, while older consumers crave traditional morning fare.

About a quarter (26%) of consumers say they enjoy eating foods that are associated with lunch or dinner for breakfast, according to Technomic, which sees breakfast burgers made with classic ingredients and topped with a fried egg taking off. Breakfast ramen, flatbreads and pizza are also fair game. What’s more, 36% of consumers say it’s important that foodservice locations offer unique and/or ethnic breakfast items.

The Deli Express brand of E.A. Sween Co., Eden Prairie, Minn., offers a range of classic and trendworthy breakfast sandwiches, including a chorizo sausage, jalapeno egg, cheese and jalapeno cheddar biscuit; sausage, egg and cheese between two pancakes; a sausage, egg and cheese biscuit; and a chicken biscuit.

A Healthy Helping 

While demand for healthier breakfast items—including egg whites, chicken, turkey, plant-based proteins, fruit, yogurt and grains such as overnight oats—is on the rise, Technomic says that offerings also need to be filling and perceived as a good value.

According to Technomic, 42% of millennials would like more foodservice operations to offer chicken for breakfast, and 39% say the same for turkey. And while many consumers perceive chicken, turkey and plant-based proteins as healthier alternatives to pork and beef, the research company reports that older consumers prefer traditional items, so it’s critical to build a breakfast menu with plenty of variety.

Grocers Doing Breakfast Right 

Mariano’s Meal Deal. The Kroger Co.’s Chicago-based Mariano’s banner offers an unbeatable breakfast deal in its in-store Vero Coffee & Gelato shops. A breakfast sandwich and a 16-ounce Vero coffee can be bought for $4 all day, while an oatmeal and coffee is equally affordable at $3.

Hot Stuff at Whole Foods. Austin, Texas-based Whole Foods Market knows its way around a hot breakfast bar. Biscuits and gravy, oatmeal, grits, bacon, sausage, potatoes, eggs and more are ready for the taking from the grocer’s prepared foods area each morning. The bar also affords shoppers the opportunity to customize or personalize their breakfast experience—another top trend.

All Departments on Deck at DLM. Not only does Dorothy Lane Market of Dayton, Ohio, do a bang-up job of promoting its housemade breakfast fare, but it also expertly cross-merchandises ingredients from various departments to underscore the vibe of homemade freshness. “Made fresh in our kitchens and cooked to order at the DLM Coffee Bar, our line of breakfast sandwiches help fuel your day,” reads the Dorothy Lane website. “Our breakfast quesadillas and croissants are filled with fluffy scrambled eggs, rich cheddar cheese and an assortment of breakfast meats, including DLM Uncured Bacon, ham and chorizo.”

Dorothy Lane’s bagel are made in its Bakehouse and smeared with flavored cream cheese from the DLM Cheese Shop. The newest addition to the grocer’s breakfast lineup is DLM Overnight Oats, which are made with Greek yogurt and served in grab-and-go parfait cups with stickers that read, “Made Right Here.”

Wegmans’ Winning Sammie. If the online reviews are any indication, Rochester, N.Y.-based Wegmans’ Breakfast Sandwich (available in its in-store coffee bars) is a five-star sensation that is giving area fast-food joints, c-stores and more a run for the morning protein rush. “Generous portion of fresh eggs, cheese and meat of your choice,” reads one of a number of stellar reviews on the Wegmans website.

Lucky’s In Love With Breakfast. Started by two chefs, Niwot, Colo.-based Lucky’s Market serves up a full breakfast at its Lucky’s Cafe, adjacent to its store location in Boulder, Colo. The cafe’s menu, which includes chicken fried steak with cage-free egg; breakfast burritos; biscuits and gravy; huevos rancheros; and Tofu Flannel Hash, also strategically promotes fresh fare from its grocery store. “All our organic, local and humanely raised ingredients are available next door at Lucky’s Market,” reads the menu.

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