Breakfast Insights of Campions 05052014

Home , American cuisine, Latin American cuisine

Breakfast Insights of Champions Menu Trends and Insights, 2014

01 Genius Summary

Our analysis of the current landscape of breakfast menus has yielded the following key insights: • Fruits & Vegetables - Even though both are mentioned on over three-quarters of menus, the number of individual items that mention produce is relatively low.

• Latin Flavors- Latin American cuisine is the most prevalent of cuisines found within the breakfast segment outside of American cuisine. Latin dishes are also trending on American cuisine menus as well.

• Healthy Options - Despite the buzz around items like Greek yogurt & oatmeal, healthier options are still fairly limited in breakfast compared to the rest of the menu.

02 Breakfast Overview • Breakfast is available at 49% of restaurant locations nationwide (all breakfast in- cludes brunch).

• Availability of breakfast has been steadily increasing over the past year with a 5 percentage point increase in the number of locations o ering breakfast. This is 13% relative growth in just 9 months.

• Approximately 1 in 3 chains o er breakfast, while only 1 in 5 independents o er breakfast.

• The QSR segment is the most over-represented market in breakfast, while casual dining and upscale segments are signiﬁcantly under-represented.

SEGMENT TYPICAL DISTRIBUTION BREAKFAST DISTRIBUTION INDEX Fast Casual / Family ($$) 46% 43% 93 Casual ($$$) 26% 16% 62 QSR ($) 20% 35% 175 Upscale ($$$$) 3% 2% 67

OVERVIEW OF ALL BREAKFAST MENUS 03 Latin American Influence % of Total Locations of Concept • Restaurants identified as Latin American represent the 3rd largest CUISINES % segment of locations o ering American 70% breakfast. Other 19% Mexican 8% • Consumers are more likely to be 1% exposed to breakfast at non-cuisine Italian specific eateries like cafes or bakeries. Southern Food 1%

• However, when looking speciﬁcally at unique menus, there are a greater number of Mexican menus o ering % of Total Menus of Concept breakfast over the “other” category. CUISINES % American 56% • This creates more inﬂuence in cross Mexican 12% operator growth vs. market availability of various breakfast items. Other 8% Italian 6% French 2%

DISTRIBUTION OF TOTAL MENUS ACROSS CUISINES THAT OFFER BREAKFAST 04 Top Dishes by Restaurant Type

Top Dishes Menued at Chains Top Dishes Menued at Independents

0% 20% 40% 60% 0% 20% 40% 60% 80%

SCAMBLED EGG 50% OMELETTE 62% OMELETTE 48% PANCAKE 49% SANDWICH 47% FRENCH TOAST 47% FRENCH TOAST 38% TOAST 44% PANCAKE 37% SANDWICH 42% TOAST 35% SCAMBLED EGG 37% BAGEL 27% BAGEL 34% WAFFLE 25% HOME FRIES 28% ENGLISH MUFFIN 24% ENGLISH MUFFIN 24% HASH BROWNS 24% WAFFLE 22% BISCUIT 23% EGGS BENEDICT 21% MUFFIN 22% OATMEAL 20% • UNIQUE TO INDEPENDENTS: Chain restaurants are the most under menued to their independent counterparts in dishes like gyros, home fries and cereal.

• UNIQUE TO CHAINS: Independents can take inspiration from their chain counterparts by o ering ethnic ﬂavors for breakfast and portable options like dips, ﬂatbreads, pizzas and tacos.

% OF MENUS THAT MENTION DISH TERM WITH BREAKFAST IN RESPECTIVE SEGMENT 05 Top Breakfast Proteins • Eggs are always the most common Top Proteins Mentioned in Breakfast Segment source of protein mentioned on 0% 50% 100% 150% breakfast menus. EGGS 87% 96%

• Breakfast items with scrambled eggs BACON 72% are 6x and 23x more likely to be 93% SAUSAGE 71% featured on menus versus fried and 76% HAM 67% poached, respectively. 69%

STEAK 33% • Egg whites are only found on about 55% SALMON 26% 15% of menus. Those menus represent 4%

½ of the locations in the country. With CHICKEN 25% 30% high consumer exposure, this is an TURKEY 22% actionable option for independent 41% BEANS 20% operators. 13%

CHORIZO 17% • Salmon, crab and shrimp are 6% EGG WHITE 15% signiﬁcantly under penetrated at chain 49% operators. Menu Penetration Location Availability

% OF MENUS & LOCATIONS THAT MENTION SPECIFIC PROTEIN IN BREAKFAST 06 Top Breakfast Fruits • Only 15% of breakfast items typically Top Fruits Menued with Breakfast Menus mention any type of fruit. 0% 10% 20% 30% 40% • Bananas, avocados and citrus have BERRY 38% low availability but significant menu BANANA 24% penetration. These fruits could be a AVOCADO 17% good fit for large-location chains. APPLE 17% RAISIN 14% • Many tropical fruits, such as CITRUS 13% pineapple or mango, have not found PINEAPPLE 4% their way onto a lot of breakfast MELON 4% menus. CHERRY 3% PEACH 3% • Tropical flavors represent an COCONUT 3% opportunity to act as a flavor bridge for MANGO 3% Latin American influenced items. PLANTAIN 2% PEAR 2%

APRICOT 1%

% OF MENUS THAT MENTION SPECIFIC FRUIT TERM IN BREAKFAST 07 Top Breakfast Vegetables • Only 22% of breakfast items typically Top Vegetables Menued with Breakfast Items mention any type of vegetable. 0% 20% 40% 60% 80% • The prevalence of brunch items ONION 62% propel non-traditional vegetables TOMATO 59% mentions in breakfast items. PEPPER 56% MUSHROOM 45% • Vegetables most commonly ﬁnd their SPINACH 38% way into omelets, sandwiches and POTATO 33% burritos. BROCCOLI 14% LETTUCE 13%

OLIVE 10%

CORN 10%

PICKLE 9%

GARLIC 8%

ASPARAGUS 6%

SQUASH 5%

SALAD GREEN 5%

% OF MENUS THAT MENTION SPECIFIC VEGETABLE TERM IN BREAKFAST 08 Trending Examples Avant garde & mainstream trends to take action on...

CONTENT 09 Niche and growing terms in breakfast include...

• Panini • Mango • Open- Faced • Vinegars • Philly • Fritters • Fat Free •

Niche trends are focused on alternative preparation styles that di erentiate large categories and acidic ﬂavors.

NICHE (UNDER 5% OF MENUS) GROWING

% CHANGE IN MENUS MENTIONING TERM Q2 2013 TO Q1 2014 10 Accepted and growing terms in breakfast include:

• Burrito • Home Fries • Feta Cheese • Salsa • Turkey • Oatmeal • Avocado •

Accepted trends are focused around Latin and Mediterranean ﬂavors, as well as, healthier options.

ACCEPTED (5-23% OF MENUS) GROWING

% CHANGE IN MENUS MENTIONING TERM Q2 2013 TO Q1 2014 11 Widespread and growing terms in breakfast include...

• Tomato • Pepper • Sauces • French Toast • Sandwiches •

Widespread trends are all about restaurants having the basic breakfast staples on the menu and ﬁguring out how to di erentiate and compete.

WIDESPREAD (OVER 23% OF MENUS) GROWING

% CHANGE IN MENUS MENTIONING TERM Q2 2013 TO Q1 2014 12 Sandwiches continue to grow. In fact, they’re found on 42% of restaurant menus.

• With 1 in 4 menus o ering a breakfast Top Ten Breakfast Sandwich Carriers sandwich also o ering a wrap, this trend links 17% BAGEL back to other trends like burritos. 5%

11% TOAST 4%

• Flatbreads, English muns, biscuits and 11% CROISSANT Texas toast all have signiﬁcant availability but 5% 8% ENGLISH low menu penetration. MUFFIN 36% 7% TORTILLA 6%

7% • Breads like bagels and croissants have WHEAT 17% surprisingly low availability given their high 6% ROLL/BUN penetration on independent menus. 3% 3% BISCUIT 16%

2% MUFFIN • Consider bread trends occurring in other 13% Menu Penetration 2% Location Availability areas of the menu. Ciabatta, brioche, and CIABATTA 1% pretzel are all examples of unique breads 10% 20% 30% 40% being used by large QSR chains.

OPPORTUNITY FOR EXPLORATION Flatbreads have 1% menu penetration and 28% location availability. Consider creating a ﬂatbread breakfast sandwich because it would have little competition across restaurants and high exposure in national chains.

OPPORTUNITIES IN BREAKFAST SANDWICHES 13 Healthier in Breakfast • Terms that connote healthiness in breakfast items are mentioned on 5% of menus.

• However, across all sections of the menu, these terms are about 4 percentage points higher, leaving breakfast under penetrated.

• Healthy buzz words like "gluten-free" or "natural" are 4x more likely to show up in a non-breakfast section of the menu. This is a potential growth opportunity for operators focused on increasing gluten free o erings.

• The highest penetration of healthy breakfast items is in the Northeast region. The states in that region have twice as many locations with healthy breakfast items than the states in other regions. Contact Food Genius to discover the variations found in regional data of healthy breakfast items.

USE OF HEALTHY TERMS ON BREAKFAST MENUS 14 The most common healthy breakfast option found on menus is egg white.

% OF MENUS THAT MENTION SPECIFIC TERM WITH HEALTHY BREAKFAST ITEMS 15 Food Genius tracks menus.

All data is sourced from Food Genius Reports. Food Genius Reports identiﬁes menu level restaurant data to provide foodservice insights to manufacturers, operators and distributors.

This research was completed in May 2014. All data was collected in April 2014 and reﬂects changes to the restaurant landscape that took place from October 2013 through March 2014.

DATA FROM

49,795,993 menu items

341,605 locations

78,864 menus

METHODOLOGY 16 Need Additional Breakfast Insights? Contact our team to learn more about our services.