The Future Growth Opportunity of Breakfast Out of Home, through to 2030

If we think back to 2010, breakfast was growing into a key day-part in the UK foodservice market, albeit predominately monopolised by Hotels and Coffee Shops; on average, the UK adult consumer ate breakfast out of home on average, 1.9 times per month.

McDonald’s was expanding its breakfast offer, and introducing their bean to cup coffee offer, Wetherspoons had introduced their 99p Lavazza coffee offer with free refills, and people were realising that you could actually be seen coming out from a ‘spoons’ site at 11am , without worrying about your reputation; Loungers was expanding out of their south west base, but were still a fledgling all-day concept.

Subsequently, as operators have looked to sweat their assets harder, more of them have looked at the breakfast day-part and recognised that there is a potential untapped revenue source, and as the old Coca-Cola maxim says – ‘if you put products within arms’ reach of desire, consumers will buy them’.

Last year, breakfast became a meal that was eaten as frequently out of home as dinner, reaching an average of 2.5 occasions per month, showing that when consumers have the opportunity, they are making the most of it.

The level of spend at breakfast has also breached the ￡5.00 level, something that shows a growing acceptance of spending on what is supposedly, ‘the most important meal of the day’.

It is now easier and more convenient to purchase breakfast out of home, with a bowl of porridge, an egg pot, or a marmite croissant, and when operators such as Gregg’s set up a ￡2 meal deal for a bacon roll and coffee, it’s too good to ignore, and persuades consumers that they could make a habit of eating breakfast out of home.

Healthy, Asian-focused, London chain Abokado recently announced that 30% of their total visits were now made a breakfast time, although the amount of total revenue would be a lower percentage, that is still a significant driver of revenue through only a couple of hours of trading.

Mcdonald’s are currently trialling extending their breakfast opening hours, from 10.30 to 11am, as they realise that there is a growing demand for breakfast items, and the value that they deliver, more so than the early lunchtime demand for burgers; I can see that this trial will be extended to all UK McDonald’s stores within the next year or two, and could indeed be expanded to 11.30am.

Consumers are recognising that you can get a great meal at a lower average cost than at lunch or dinner; a recent experience at a Drake & Morgan site at Heathrow highlighted how this was the case, with a dish of buttermilk-fried chicken on waffles with avocado and poached egg selling for ￡8.95, whilst a similarly-sized dish at lunch or dinner would cost between ￡10 and ￡15.

So what about the Future? What growth will there be for Breakfast by 2030?

With a current estimate that the breakfast day-part is worth c.￡7bn, I am forecasting that it will be worth over ￡12bn by 2030.

I believe that there will be more breakfast offers for consumers, as operators realise that this is an opportunity not to be missed, and as a result, consumers will increase their frequency as they try to fit more into busier lives, and as it becomes easier for them; this frequency only needs to increase from 2.5 occasions per month to 2.7 occasions, but that makes a significant difference.

Spend levels will easily increase to an average ￡6.00 over the 10 year period, and when combined with an increase in total population to c.70m by 2030, it is easy to see how the calculations add up.

Now ￡12bn is still the smallest part of the total out of home spend, however a ￡5bn increase is a huge opportunity for operators and suppliers to take advantage of.

Who will be best placed to make the most of this opportunity?

·      All-day bar operators such as Wetherspoons and Loungers, or in city centres, concepts such as Albion & East’s Serata Hall

·      Farm Shops & Deli’s, providing rural and suburban communities with great, locally-sourced breakfast offers, and these also appeal to the growing leisure market, especially given the increase in the older population.

·      Cafes which can offer a full-blown food menu, with requisite kitchen and service facilities, rather than more-simplistic coffee shops.

·      The New Fast Food operators, as long as their basic concept isn’t alien to eat at breakfast, ie chicken!

·      Contract Caterers, who have always recognised the breakfast opportunity, but need to up their game to provide more options at greater value

Who might struggle?

·      Casual Dining chains have already proved that doing breakfast stretches their capabilities and their credibility with consumers, and this wont change.

·      Wet-led bars/pubs, as the style, décor and ambience that makes a wet-led bar work so well, don’t play well at breakfast

·      Hotels, if they continue to charge over ￡15 for a breakfast which can be purchased in a competitor location for around ￡5

Ultimately, with c￡5bn growth to come from this day-part, Breakfast should be a winner for all, and consumers will continue to increase eating it out of home if the offer is right.

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