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“Today started early with a stop at Rutter’s. I went straight to the touchscreen kiosk with a mission to create the greatest breakfast bowl ever! With so many toppings to fill the bowl, my mind started to twist and turn in chaos. Wow, so many choices! There must be 100 different ways to create a breakfast bowl. I started with the basics, ya know, egg, bacon and cheese, and then it got to the hard part. Well, it was for me, especially when you’re as fickle as I am. The layering of toppings began with tomatoes, green peppers, onions, mushrooms and olives. Sounds good, but then the kiosk asked me if I would like anything else, and I answered with hash browns! With all the choices available, what could a girl do but layer it on.”
That customer comment, posted on Rutter’s Farm Stores’ blog and featured on the York, Pa.-based company’s website, shows how important breakfast — in particular, breakfast bundles — can be.
“Breakfast is an extremely important daypart for us, that is if you consider growing sales important,” said Rutter’s Jerry Weiner, vice president of foodservice. “We’ve always offered bundles as promotional items, but bundling really took off when we added touchscreens in 2006. Typically, a breakfast bundle includes coffee with a sandwich and hash browns. With our touchscreens, which are in all of our stores with on-premise fresh-to-order sandwiches, customers can build their own breakfast bundle with any of our 13 sides. If they want fried pickles with their breakfast sandwich, they can get that! That’s the important thing — they can.”
The Benefits of Bundles
Several factors are playing into the upswing in breakfast sales.
In August 2010, the "Breakfast Trends in the U.S. Foodservice Market" report from market research publisher Packaged Facts predicted that consumer spending on restaurant breakfast would rebound from an anticipated downturn in 2010. According to that report, factors driving the projected upturn were value pricing strategies that would influence future spending habits; the influence of convenience; and the “menuing” of value bundles.
Those predictions have since proven prescient, said David Morris, author of the Packaged Facts foodservice series.
“I estimate breakfast sales in 2011 grew by about 7 percent, and expect breakfast growth of about 6 percent for 2012 at limited-service and full-service restaurants, including some coffeehouses,” Morris explained. “On the c-store side, we’ve framed the numbers in terms of prepared food sales, which are estimated [to be] $17.4 billion in 2012. That is up 6 percent and outperforming any other foodservice category. I think prepared food sales are skewed toward breakfast at c-stores and comprise the bulk of growth and sales.”
Bundled breakfasts are important components of those morning sales.
“Bundling gained tremendous traction in 2008 and 2009,” Morris noted. “It was a way for restaurants and c-stores to build loyalty and revenue by pivoting off coffee — the core item that cuts across coffeehouses, restaurants and c-stores.”
Today, premium coffee’s skyrocketing popularity is fueling growth, with bundling playing a key role in restaurants, coffeehouses and c-stores.
“The breakfast daypart is a key ingredient in the success of our hot foods program. Two of our top five menu items are breakfast sandwiches,” reported Steve Wrobel, spokesperson for La Crosse, Wis.-based Kwik Trip Inc. “It continues to grow in sales volume and profit every year.” The company’s Breakfast Combo is especially popular. “For $2.99, customers can receive a 16-ounce coffee, cappuccino, milk or orange juice, along with a breakfast sandwich. Hash browns can be added for $1,” Wrobel said. “Our marketing efforts promote this special, and it has been very successful. It is a natural suggestive sell. It offers a real value to the customers, while helping to increase the ticket sale amount.”
The pairing of a breakfast sandwich and a beverage is a common combination, one that Morris of Packaged Facts thinks restaurants and c-stores should expand to entice even more breakfast customers. “Bundling is a fairly simple concept, and most places offer a sandwich plus coffee, with hash browns as a minor twist,” he said, noting that McDonald’s and Burger King offer a variety of sandwiches, as well as a breakfast burrito that customers can pair with coffee or other beverages. “I think bundling has to be looked at in terms of ‘Do we offer variety?’”
Rutter’s, for one, is heeding that call. Customers can order breakfast sandwiches made on waffles, English muffins, croissants, bagels or pretzel rolls with a choice of yellow, white American, Swiss, Provolone or pepper jack cheese, then add any side plus a medium or large fountain, frozen or coffee drink.
Morris suggests foodservice outlets go even further. “I think experimenting with sides like apples and pears is a good idea, especially in light of the health issues that are ubiquitous today,” he added.
The bottom line is that beefing up bundles can pump up profits, too. Bundling, industry estimates show, can increase check averages up to 10 percent and basket size by more than 15 percent.
“With bundling, obviously, our check averages go up and everyone’s blood pressure goes down,” Weiner concluded.