This report explores the growing full-service restaurant breakfast market, in terms of market sales, major chains, and new items, as well as factors that will drive change in the market in upcoming years. As a result of the focus on full-service breakfast chains, the heart of the report is an exploration of family/midscale offerings. Attitudes toward brunch are likewise covered in Mintel’s proprietary consumer research.

This examination brings up an interesting conundrum—breakfast sales are rising rapidly, yet family/midscale chains show the slowest growth of any restaurant sector. This finding suggests that brand repositioning may be necessary for family/midscale operations to better capitalize on general growth in breakfast sales.

Working with the hypothesis that family/midscale marketing needs to shift from product-specific promotions to experience-based campaigns, Mintel uses party composition data from the Simmons NCS survey results. Mintel has also commissioned an exhaustive proprietary survey on breakfast attitudes. To provide potential for rethinking strategies in operations and marketing, this report explores the breakfast food and dining preferences of 1,100+ respondents who have dined out for breakfast in the last month at a full-service restaurant, and who average more than 3.5 full-service breakfasts and brunches out per month.

Demographic differences in attitudes are explored on the basis of age, gender, and race/ethnicity. Significantly, these three factors collide to make young minority males perhaps the most desirable single group for full-service breakfast. Based on the negative correlation between frequency of dining out for full-service breakfast and interest in nutrition, trends toward healthier eating and potential responses are explored in depth.

In addition, Mintel draws industry analysis from its own Menu Insights database, and sales data for the combined independent and chain markets from the Consumer Expenditure Survey. The Market Drivers section points to demographic shifts that are occurring in the U.S., allowing Mintel’s clients to maximize marketing efforts and appeal to growing consumer bases such as minorities and over-55s. The report also offers a lesson on what the full-service breakfast market can learn from the successful limited-service breakfast market, and finally addresses future trends that will affect sales in the next five years.

This is the first time that Mintel has analyzed the full-service breakfast market. Full-service restaurants are defined as any restaurant in which the patron pays after a meal, and orders and receives food while seated from a waiter or waitress. The report focuses on chain restaurants, rather than independents, though the research acquired applies to both sectors.

Scope and Themes

What you need to know

Definition

Data collection

Abbreviations and terms

Abbreviations

Terms

Executive Summary

Highlights

Health trends and the rise of ethnic foods

Family/midscale chains specialize in FSR breakfasts

Who’s eating FSR breakfast away from home

Breakfast behavior and preferences

Black and Hispanic diners

Long-term difficulties on the horizon

Silver linings on future clouds

Market Drivers

Disposable income

Figure 1: Consumer expenditure on total food and food away from home as percentage of disposable income, 1985-2004

Figure 2: What one change would increase the number of times you eat at restaurants, 2005

Figure 3: Opinions toward budgeting for breakfast, by age, November 2006

Figure 4: Distribution of households, by income, 1999 and 2005

Figure 5: Change in number of households per income bracket, 1999-2005

Factors decreasing personal income

Dining out is a treat

Figure 6: Reasons for dining out, November 2005

Celebrations

Figure 7: Opinions toward breakfast and brunch, by race, November 2006

It’s a family affair

Figure 8: Family dining for breakfast, by age, November 2006

Novel and ethnic offerings

Figure 9: Incidence of enjoying foreign foods, 2001 vs. 2006

Figure 10: Attitudes to eating new food at breakfast, November 2006

Medical research encourages eating a healthy breakfast

Demographic change

Figure 11: Population by age, 2002-12

Figure 12: Chart: Population by age groups, 2002-12

Figure 13: Households with children under age 18, 2000-05

Figure 14: Population by race and Hispanic origin, 2002-12

Market Size and Trends

Market size

Figure 15: Total U.S. retail sales of FSR breakfast, at current and constant prices, 2001-06

Market trends

Mexican cuisine on breakfast menus

Brew with flavor

Healthy offerings

Fresh from the bakery

Competition from Other Restaurant Segments

Introduction

Repositioning the value offering of family/midscale restaurants

Market Overview

New product offerings

Figure 16: Selected breakfast menu additions, by named restaurant chain, 2006-07

Advertising spend

Figure 17: Restaurant ad spending in the U.S., 2005

Leading brands

Denny’s

Advertising and promotions

Figure 18: Denny’s advertisement (Restaurant Chain)

Waffle House

IHOP

Bob Evans and Mimi’s Café

Alternative marketing techniques

Buffet Holdings (HomeTown Buffet, Old Country Buffet)

Old Country Buffet advertising

Figure 19: Old Country Buffet advertising (Buffet Restaurant)

Perkins Restaurant and Bakery

Cracker Barrel Old Country Store

Steak n Shake

Golden Corral

Big Boy

Village Inn/Bakers Square

Huddle House

Shoney’s

Country Kitchen

Weekend brunch

The Cheesecake Factory

Chevy’s Fresh Mex

O’Charley’s

Copeland’s from New Orleans

Marie Callender’s

The Consumer: Frequency of Patronage

Key Points

Weekday breakfast restaurant patronage

Figure 20: Weekday breakfast dining out in the past month, frequency by location, by age, November 2006

Weekday breakfasts: 18-34s examined by race/ethnicity and gender

Figure 21: Weekday breakfast dining out in the past month, frequency by location, by age, gender, and race/ethnicity, November 2006

Weekend breakfast restaurant patronage

Figure 22: Weekend breakfast dining out in the past month, frequency by location, by age, November 2006

Frequency of eating brunch

Figure 23: Frequency of eating brunch out in the past month, by age and household income, November 2006

Figure 24: Frequency of eating breakfast out in the past month, by household size and employment, November 2006

The frequent user

Per capita average monthly use of breakfast and brunch

Figure 25: Frequency of FSR breakfast dining, and proportion of visits to chains vs. independents, by five demographic groupings, November 2006

A Case for Healthier Menus

Health appeal drives sales for competing fast casual sector

Figure 26: Attitudes towards restaurants, by gender, June 2006

Figure 27: Prevalence of overweight and obesity among U.S. adults, 1976-2002

The difference between consumer claims and behavior

Figure 28: Opinions toward breakfast and brunch, by age, November 2006

A consensus on what defines healthy food

Moving beyond healthy to ethical dining

Trended data supports increasing interest in healthy offerings

Figure 29: Consumer attitudes/opinions on breakfast foods, by year, March 2007

Figure 30: Opinions regarding food and dieting, by age, January-October 2006

Gender

Figure 31: Opinions regarding food and dieting, by gender, January-October 2006

Race

Figure 32: Opinions regarding food and dieting, by race, January-October 2006

Income

Figure 33: Opinions regarding food and dieting, by income, January-October 2006

Education

Figure 34: Opinions regarding food and dieting, by education, January-October 2006

Presence of children

Nutritional concerns

Figure 35: Breakfast and brunch nutrition, by age, November 2006

Breakfast Preferences

Key points

Party composition

Figure 36: Party composition, by age, May 2005-June 2006

Figure 37: Party composition, by gender, May 2005-June 2006

Figure 38: Party composition, by marital status, May 2005-June 2006

Menu choices

Figure 39: Breakfast and brunch food preferences, by age, November 2006

Figure 40: Breakfast and brunch food preferences, by income, November 2006

Breakfast beverage choices

Figure 41: Breakfast beverage preferences, by age, November 2006

How breakfast time is spent

Figure 42: Time spent eating breakfast and brunch, by age, November 2006

Attitudes towards brunch

Figure 43: Opinions towards brunch, by age, November 2006

New concepts in FSR breakfast

Figure 44: Special breakfast and brunch, by age, November 2006

Restaurant loyalty

Figure 45: Breakfast restaurant loyalty, by age, November 2006

Restaurant selection criteria

Figure 46: Important criteria for selecting where to have breakfast and brunch, by age, November 2006

Racial and Ethnic Groups

Introduction

With whom breakfast is eaten, by race

Figure 47: Whom adults go to fast food/drive-in restaurants for breakfast with, by race, May 2005-June 2006

Breakfast beverage choices, by race

Figure 48: Breakfast and brunch food preferences, by race, November 2006

Breakfast food choices, by race

Figure 49: Breakfast and brunch food preferences, by race, November 2006

Attitudes toward health and family when eating breakfast out, by race

Figure 50: Opinions toward breakfast and brunch, by race/ethnicity, November 2006

Budgeting and eating breakfast out

Figure 51: Opinions toward budgeting for breakfast, by race, November 2006

Attitudes towards brunch

Figure 52: Opinions towards brunch, by race/ethnicity, November 2006

New concepts in FSR breakfast

Figure 53: Special breakfast and brunch, by age, November 2006

Nutritional concerns

Figure 54: Breakfast and brunch nutrition, by race, November 2006

Restaurant selection criteria

Figure 55: Important criteria for selecting where to have breakfast and brunch, by race, November 2006

Teen breakfast out, by race/ethnicity

Figure 56: Teens (12-17) who go to FSRs for breakfast, by race/ethnicity, May 2005-June 2006

Future and Forecast

Future trends

Boomers may favor casual chain brunches over midscale breakfasts

Eliminating trans fats, and the search for healthier breakfast choices

Internet access

Pizza’s potential in the breakfast arena

Boomers to popularize flexible work schedules

Local control for chain restaurants

Potential growth for brunch

Market forecast

Full-service restaurant breakfast

Figure 57: Forecast of U.S. sales of full-service restaurant breakfast, at current and constant prices, 2006-11

Forecast factors

Appendix: Trade Associations