Breakfast is said to be the most important meal of the day, and this certainly rings true for the US restaurant industry.
The most profitable day-part thanks to lower food costs and higher drink purchases, breakfast was booming before the pandemic hit.
And although the segment was heavily impacted by Covid-19, as the country is adapting to a post-pandemic world, breakfast is bouncing back.
While the US restaurant industry is lacking a general sense of buoyancy right now as inflation rates are stalling overall growth, breakfast seems to be defying the norm.
Industry analysists The NPD Group found that breakfast restaurant traffic grew by 4% in August compared to the same month a year ago and is now within 1% of pre-pandemic levels.
Overall restaurant traffic by comparison was flat in August, with lunch visits down 2%, and dinner traffic up a mere 1%.
“Breakfast at restaurants was adversely affected in the early stages of the pandemic, and it’s recovering now that more consumers have returned to more out-of-the-home routines,” David Portalatin, NPD food industry advisor and author of Eating Patterns in America, says.
“It’s encouraging that consumers have found new reasons and ways to get breakfast away from home.”
Bret Thorn, senior food editor at Nation’s Restaurant News, agrees. “Although the traditional commuter’s breakfast has, and will probably continue to be, affected by the fact that many former office workers are now working from home, many of those home workers are now indulging in breakfast and brunch later in the morning, quite often at full-service restaurants,” he says.
Indeed work-from-home numbers in the US have remained remarkably high, with just 4% of business leaders insisting all employees return to the office full-time, and less than half (45%) requiring some workers to return five days a week, according to a recent survey from Conference Board.
David Birzon, CEO of Denver-based breakfast and brunch chain Snooze an AM Eatery, which has 59 restaurants across 10 different states, says this has boosted weekday traffic significantly.
“We believe because people can work from home and have more flexibility in their schedules, they’re more likely to hold business meetings with a colleague for breakfast or take the time to meet a friend for breakfast,” he says in an interview.
However, the breakfast and brunch boom is not an entirely new phenomenon, and the segment was already flourishing prior to the pandemic outpacing the rest of the industry with 15% annual growth, according to research from the Coca-Cola Company.
Major players sought to capitalise on this trend as Wendy’s re-entered the breakfast market in early 2020 and chains like McDonald’s, Dunkin’, Taco Bell and Burger King launched a flurry of breakfast promotions and new menu items to protect their turf.
“The biggest trends were spicier menu items, mostly with influence from Mexican cuisine, as well as some lighter items such as smoothies, juices, and oatmeal,” explains Thorn. “Also, chains focused on breakfast and brunch were seeing robust alcohol business, especially during weekend brunch.”
This is echoed by Joey Maggiore, co-founder of Hash Kitchen, a breakfast and brunch restaurant chain with five locations in Arizona.
“By far, the build-your-own Bloody Mary is the best-selling item on the Hash Kitchen menu,” he says.
“And that hasn’t changed as alcohol sales increased during Covid-19. Our Bloody Mary experience continues to be the bread and butter of our business.”
Hash Kitchen is not alone: Many brunch-focused restaurants have increased their alcoholic offerings, which now go far beyond the usual Bloody Mary and bottomless mimosas, including innovative cocktails with alcoholic riffs on familiar breakfast flavors, spiked teas or coffees and beer and wine featured on menus.
Moving forward there seems to be plenty of reason for enthusiasm and breakfast and brunch-focused restaurant brands are feeling it.
Chains like Another Broken Egg Café, which currently has 80 locations across 15 states, has plans to reach 300 units open and in development by 2023, while Eggs Up Grill is planning to add to its 57-strong portfolio with another 10 before the end of the year and 20 more in 2023.
Meanwhile Snooze plans to ramp up its expansion with 12-13 new restaurant openings each year, and First Watch is looking to grow to over 2,200 US restaurants.
“The traditional weekday breakfast will probably not completely recover now that former office workers have found new ways to get their jobs done,” anticipates Thorn. “But brunch will remain solid, especially on weekends, and alcohol sales during that time will probably continue to grow for a while.”
Breakfast and brunch concepts to watch:
HASH KITCHEN
What’s the concept? From its build-your-own Bloody Mary bar to over-the-top dishes such as a tabletop Ferris Wheel of pastries, colourful wall art and an upbeat vibe that includes rotating DJs on the weekend, Arizona-based Hash Kitchen is all about turning breakfast into a party.
Who’s behind it? Hash Kitchen is owned by the Maggiore Group, which also owns a number of Italian restaurants and a Mexican concept in Arizona.
Number of outlets: Launched in 2015, the concept currently has five locations in Arizona.
Future plans? Hash Kitchen formed a strategic partnership with investment company Savory Fund last year, which bought a $20m stake in the business that is to fund its expansion into new markets, including Colorado, Nevada, Texas and Utah.
What’s on the menu? Hash Kitchen’s huge menu fuses breakfast comfort foods like pancakes, waffles, French toast and breakfast burritos with its signature hashes, benedicts and burgers. The restaurant’s build-your-own Bloody Mary bar allows guests to customize their cocktails with house-made mixes, infused spirits and more than 50 craft toppings, while signature mimosas come with the optional add on of a cotton candy glitter bomb.
Average spend: $26 (£22)
BREAKFAST REPUBLIC
What’s the concept? Playful design, eclectic menus and a lot of merchandise define Southern California-based chain Breakfast Republic, where customers wait in ‘egg’ chairs and each location features a living plant wall. Four of its restaurants also include a mini grab-and-go concept called Eggies, designed to accommodate people queueing and offering breakfast sandwiches and drinks to go.
Who’s behind it? Breakfast Republic is owned by the Rise & Shine Hospitality Group, which is run by founder and COO Johan Engman. The group also runs the Fig Tree Café and Breakfast Company concepts in Southern California.
Number of outlets: Founded in 2015, Breakfast Republic currently has 14 locations, predominantly in San Diego, with further restaurants in Orange County and Los Angeles.
Future plans? The group has three locations in Southern California the pipeline, two in Los Angeles and one in Palm Desert.
What’s on the menu? The morning-themed menu includes a selection of egg dishes, pancakes and larger dishes like breakfast jambalaya, shrimp and grits, egg-topped burgers and the Mr Presley French toast, stuffed with peanut butter and topped with bananas foster and bacon. There’s also a range of breakfast cocktails as well as Bloody Marys and mimosas on offer.
Average spend: $21 (£17)
ANOTHER BROKEN EGG CAFÉ
What’s the concept? Another Broken Egg Café is one of the largest franchised breakfast and brunch concepts in the US. Known for its Southern-inspired menu options and creative cocktails, the chain is capitalising on the popularity of the brunch category, with accelerated growth.
Who’s behind it? The concept is owned by Another Broken Egg of America Franchising LLC and its restaurants are a mix of franchise and corporate-owned sites
Number of outlets: Opened in Louisiana in 1996, Another Broken Egg Café currently has over 80 outlets in 15 states, with almost 20 more in development.
Future plans? The group intends to accelerate its expansion through franchisees, with plans to reach 300 units open and in development by 2023.
What’s on the menu? From traditional Southern favourites like shrimp ‘n grits or crab cake benedict, to sweet dishes such as cinnamon roll French toast or key lime pie pancakes topped with a spiked whipped cream, the menu at Another Broken Egg Café offers a huge variety of breakfast and brunch dishes, including fresh ingredients and seasonal specials. Additionally, the restaurants include a full bar with signature cocktails, spiked coffees and infused Bloody Marys.
Average spend: $18 (£15)
