For decades, McDonald’s (MCD) – Get the McDonald’s Corporation report dominated the fast food breakfast game. It wasn’t the only player but it was the market leader, in part because of the familiarity of its menu. The Egg McMuffin and Big Breakfast may not be top notch high end food, but they were comfort food.
Wendy’s (MAGNIFYING GLASS) – Get Wendy’s Corporate Report re-entered the breakfast market with unfortunate timing – right around the start of the pandemic. Just when people stopped following a normal work schedule, the fast-food chain introduced its breakfast menu.
Despite this setback, the chain won the morning share by doing what McDonald’s does, but making things a little fresher and, perhaps, a little better. General Manager Todd Penegor, speaking on the call for fourth quarter resultsattributed the chain’s double-digit sales growth at least in part to its breakfast menu.
“Part of this was due to the growth of our breakfast business, which reached 8.5% of sales in the United States at the height of our highly successful Buck Biscuit promotion,” he said.
Wendy’s launched breakfast with McDonald’s squarely in its sights. The chain called out its rival and essentially followed McDonald’s with the ads supporting its breakfast launch.
Now a new player – one you might not think of – wants a slice of the breakfast market and it may have the recipe for it.
Can Burger King’s sister brand become a bigger breakfast player?
Breakfast has been a notoriously difficult meal to win over an audience with. McDonald’s fended off many challengers while Starbucks (SBUX) – Get the Starbucks Corporation report brought a new audience to matinees. Yum Brands’ (YUM) – Get yum! Report Brands, Inc. Taco Bell has carved out a niche for itself in the mornings while Wendy’s has grown and Dunkin’ remains a player.
Now, while Burger King has a breakfast menu that could probably use a refresh, its sister brand at Restaurant Brands International (RSQ) – Get the Restaurant Brands International Inc reportTim Hortons, wants to become a bigger breakfast player in the United States
“During the quarter, we continued our journey of improving the basic quality of breakfast and coffee,” RBI CEO José Eduardo Cil said on the fourth quarter earnings conference call. chain.
Basically, Tim Hortons followed a similar script to what Wendy’s did.
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“At breakfast, we built on our Fresh Cracked Egg platform with the introduction of the Steak and Egg Breakfast Sandwich, which helped boost overall morning day sales versus to 2019 levels for the first time since the start of the pandemic,” he said.
Tim Hortons, which made its mark as a coffee and donut chain, also took a step that Wendy’s didn’t: it stepped up its coffee game.
“We also made progress in enhancing our hot beverage offerings, extending our previous work on brewed coffee to a successful relaunch of the craft espresso beverage platform, including lattes in November,” Cil added. .
“We have seen the benefits of our richer and bolder recipes, dairy alternatives and equipment refinements with these delicious espresso drinks which have contributed to positive sales growth and improved sequential sales of hot drinks.”
Can Tim Hortons, Wendys or any chain knock McDonald’s off the breakfast throne?
McDonald’s has arguably backtracked a bit when it comes to breakfast, as it ditched the hugely popular “All-Day Breakfast” because of the pandemic. Morning Meal was barely mentioned on its recent earnings call, but that doesn’t mean the chain will be easy to wipe out.
Customers love the familiar and McDonald’s delivers it. Wendy’s and Tim Hortons may have freshly cracked eggs, but Golden Arches sells comfort (as well as much improved coffee).
However, there may be enough guests for breakfast.
The global breakfast restaurant market is expected to reach $49.82 billion by 2028, growing at a compound annual growth rate of 6.8% over the forecast period, according to a new report by Million Insights quoted by Digital Journal.
“Rising health concerns keep breakfast as an important meal of the day. This is leading to the massive adoption of breakfast by consumers in various countries like the US and UK. In these regions, approximately 40% of restaurants offer breakfast menus, which has led to the potential growth opportunity for the market,” according to the Digital Journal report.
It’s a global forecast, but these are global companies. Tim Hortons may not be a big name in the United States (at least most of it), but it could increase its morning market share while also increasing its number of stores in the United States.
“In the United States, we achieved our best year of restaurant growth since 2016 and signed development agreements to expand into new markets, including Houston, which will open its first store this summer,” Cil said.
“Our new US openings leverage a smaller footprint, faster build time and optimized menu offerings focused on beverages, baked goods and hot breakfast sandwiches. lunch, all leading to a more compelling unitary economy.”
