More than a year ago, McDonald’s Restaurants introduced all-day breakfasts in the United States. Now, McDonald’s Canada is slowly rolling out the all-day breakfast, testing it at several locations across the country. A&W Food Services of Canada will follow suit shortly.
The blurring of time divisions between meals is becoming more obvious as millennials start to gain a hold in the marketplace.
The tactic was predictable. Over the last 10 years, institutions like universities and colleges have moved away from setting specific hours for meals, to accommodate schedules and fast-paced lifestyles.
While baby boomers want to indulge, millennials want choice. Most boomers still prefer to eat breakfast at home. Millennials, on the other hand, eat on the go. According to new research from Mintel, 65 per cent of boomers eat breakfast at home most days, while 60 per cent of millennials eat breakfast somewhere else. And if millennials prepare breakfast at home, more than 80 per cent of the meals will take less than five minutes of preparation. Most of it is ready-to-eat bars or juices.
The ever-complicated morning rush is disrupting market rules and forcing the food industry to revise its approach to serving breakfast.
McDonald’s is just trying to capitalize on this monumental demographic shift.
When McDonald’s committed to the all-day breakfast strategy in the U.S. in September 2015, the price of the company’s shares was $96. Now share prices are up by almost 25 per cent and same-store sales are up six per cent from last year. So it was a highly successful strategy.
At the same time, the company added menu items with healthier ingredients like the ‘super food’ kale to appeal to millennials.
In Canada, McDonald’s is also aggressively catering to millennials. It plans to offer only hormone-free chicken in a few years and cage-free eggs by 2025. The company’s procurement process is being completely transformed.
As a breakfast space, McDonald’s Canada has made inroads. With offers of free coffee and its McCafe approach, it’s giving Starbucks, Tim Hortons and other coffee shops a run for their money. Any Canadian business that generates a significant amount of its revenue between 6 and 9 a.m. is getting anxious.
Offering free coffee helped McDonald’s establish itself as a breakfast contender. Since 60 per cent of all breakfasts eaten outside the home include a coffee, McDonald’s Canada knew the free coffee offer was the hook it needed to move the profitable McMuffin. It also likely knew that all the top breakfast restaurant chains in Canada have achieved higher sales when their coffee gained market currency. With tea and now cold brew, things are going to get interesting again.
And all-day breakfasts will continue to change habits.
However, given global demographic trends, the company may actually be late to the table. All-day breakfasts are already well established and successful in the casual, full-service and brunch domains like Cora’s, Eggsmart, Ben & Florentine and Tutti Frutti.
But you need time to eat a meal at one of these establishments. A weekend brunch with friends is enjoyable but its impossible to manage through the week, with daily commutes and other obligations. In fact, we’ve seen some consolidation in this sector of late, which may indicate that growing this business faces headwinds.
Many food service companies have seen the divide between breakfast, lunch and dinner erode in the last year. The pursuit of convenience seems to be trumping the traditional view of how individuals pace themselves through an average day.
We eat when it fits our schedule – and it rarely does. Eating at the desk or even eating while walking is becoming a new normal. More than 60 per cent of those people surveyed in the Mintel study who work full-time claimed they seek portable food solutions almost daily.
There are even suggestions that the three-course meal is slowly disappearing, replaced by one complete course that includes all the proteins and fibres one needs.
Time itself is perhaps food’s most powerful foe.
As consumers, we aren’t willing to invest time in our breakfast, so the food service industry is investing in our breakfast for us.
Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.