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- RESEARCH & AWARDS
The morning meal remains a hotly contested segment in food today, with restaurants and retailers continually battling for more share of stomach. According to Mintel, the breakfast foods category is expected to grow by nearly 26 percent from 2012–17 to reach a predicted $15.7 billion. And Packaged Facts estimates foodservice breakfast sales hit $47.4 billion in 2013, up 5 percent from 2012—and projects sales to grow by 5.6 percent in 2014, and then another 5.1 percent in 2015.
Multiple national brand product manufacturers continue to invest significantly into breakfast, and quick-service restaurants (QSRs) and limited-service restaurants are upping the ante in terms of alignment with prevailing culinary and health-and-wellness trends.
Meanwhile, private label hasn’t been resting on its laurels, with notable growth in several categories. But innovation must continue in order to secure ongoing category penetration across the board.
A primary nutritional rubric aligned with breakfast trends today is protein. Shoppers are looking for higher-protein products for breakfast, primarily to help encourage satiety—and subsequently a lower calorie intake—through the morning hours.
Cold breakfast cereal has taken a bit of a dive over the past 52 weeks per IRI data (with private label down 7.64 percent in dollar sales, and the category overall down 2.80 percent) for the 52 weeks ending December 29, 2013. Hot cereals have fared better, with 1.31 percent growth in dollar sales for private label and 2.32 percent growth in the category overall.
Offering a protein-forward ready-to-eat (RTE) cold cereal might spur sales. Whole Foods Market offers a Protein & Fiber Crunch cereal in its 365 Everyday Value line, with the protein boost coming from soy protein concentrate. Soy also adds protein to the Simply Balanced High Protein Cinnamon Crisp Cereal from Target.
Another approach to drive health-and-wellness interest is use of new and emerging nutritional ingredients, like ancient grains—ingredients that work to diversify both cold and hot cereals. Costco partners with Nature’s Path for its Kirkland Signature Ancient Grains Granola With Almonds.
Kroger makes use exotic baobab in its Simple Truth Baobab Coconut Granola, which includes the fruit as a powder in the formulation mix. Many have granted superfruit status to baobab, native to Africa, due to its high antioxidant content, significant levels of vitamin C and calcium, and high soluble-fiber content, among other nutritional benefits. Baobab also gains emotional cachet due to its role in helping spur economic growth in impoverished areas of Africa.
Another key factor in boosting breakfast product sales for several consumer demographics is convenience. To that end, breakfast beverages, often dairy-based, that include high protein content and grains like oatmeal (processed super-fine to avoid potentially off-putting mouthfeel) will likely attract attention. Such grain-based beverages are already starting to hit the U.S. market.
Heat-and-eat (on the go) convenient frozen breakfast foods remain a draw, with a 12.71 percent rise in unit sales for the 52 weeks ending December 29, 2013 per IRI data. Some retailers have shifted these items, including perennially popular muffin sandwiches, into a more-nutrition-forward area. One example is ALDI’s Fit & Active Canadian Bacon Breakfast Sandwiches and its Fit & Active Turkey Sausage Breakfast Sandwiches, both made with egg whites instead of whole eggs.
And over in the convenience channel, 7-Eleven launched a new Egg White Breakfast Sandwich in January 2014, with egg whites, Canadian bacon and Cheddar cheese on a whole-wheat English muffin.
Sales are trending positively for 100 percent maple and other breakfast syrups, with dollar sales for the overall category, per IRI, up 1.19 percent for the 52 weeks ending December 29, 2013—and up 4.03 percent for private label. Private label has captured over 20 percent of the category unit share. Over the next year, these numbers will likely increase.
In an industry that continues to align itself with all things “natural,” 100 percent pure maple syrup is, well, a natural fit. And the scientifically validated antioxidant health benefits of pure maple syrup will only help drive sales forward.
The maple syrup industry has been abuzz lately in the wake of international pressure encouraging producers to conform to one grade for labeling purposes—to use Grade A for all products, and then use other descriptors on the label to indicate flavor notes (grades typically describe the color—and accompanying flavor—of the syrup). For instance, labels might now read, “Grade A Golden, Delicate Taste” or “Grade A Dark, Robust Taste.”
The ostensible goal here is to help prevent any potential consumer confusion or misconceptions that Grade B is inferior in quality to Grade A. Vermont has already approved and adopted the measure, New York is close, and other major maple syrup producing states—along with USDA—are considering it.
Technological advances in maple syrup production have helped yields skyrocket. Per USDA, U.S. maple syrup production yielded 3.25 million gallons in 2013, up 70 percent from 2012, with the Vermont bringing in 40 percent of this total.
Maple syrup has great potential tomove beyond its association with regular favorites like pancakes, waffles and French toast. Convenient private label breakfast products that integrate pure maple syrup into the product mix—while clearly indicating this attribute on product packaging—might find a willing audience. Granola and oatmeal are two options, where use of maple syrup instead of “natural flavor” can prove a selling point. Target’s Simply Balanced Low Fat Maple Granola is made with maple syrup (among other “natural” sweeteners), along with ancient grains like spelt, amaranth and quinoa (in addition to rolled wheat and barley). Also, store brand formulators need not limit themselves to maple syrup, as 100 percent pure maple sugar is a viable ingredient format, as well.
The National Restaurant Association’s 2014 “What’s Hot” Culinary Forecast places “Ethnic-Inspired Breakfast Items” as the top trend for the “Breakfast/Brunch” category, and at No. 16 on its overall Top 20 Trends list, specifically citing “Asian-flavored syrups, chorizo scrambled eggs and coconut milk pancakes” as food for thought in this area.
Store brand frozen waffles, pancakes and French toast are commonplace in retail these days, and have seen a slight uptick in unit sales for the 52 weeks ending December 29, 2013 per IRI. Differentiation in this area has come primarily from use of multiple grains, common flavor notes like cinnamon or blueberry, and going gluten- and/or dairy-free, as well as periodically from format deviations, such as Belgian-style waffles.
Trader Joe’s—no stranger to novelty and diversity—takes an ethnic tack with its popular Danish Pancakes, known as aebleskiver in Denmark (and sometimes called “pancake puffs” in the United States). These little frozen, heat-and-eat spheres are like a cross between pancakes and popovers. Furniture retailer IKEA has also found success with an ethnic take on pancakes, selling its own brand of frozen Swedish pancakes, pannkakor, from its in-store Swedish Food Markets.
Spinning frozen handheld breakfast items into a more-pronounced ethnic direction could also pay dividends in some areas through use of Mexican chorizo—and perhaps rajas(seasoned onions and chiles, traditionally poblano, simmered with stock or cream)—instead of traditional breakfast sausage in a breakfast burrito with eggs. That chorizo-rajas-egg combination would also work well in a new frozen product format, such as on a torta—a sandwich format that has sold well in foodservice of late.
Handheld frozen breakfast items need to compete with foodservice in terms of quality, as a primary alternative to fixing something quickly to grab-and-go on the way out the door is almost invariably a QSR drive-through; breakfast accounts for 25–30 percent of the business at McDonald’s today. Similarly, the convenience channel needs to compete with both QSRs and limited-service restaurants in order to grow its sales of hot, ready-to-eat, handheld breakfast foods.
Sizzle and Pop
No matter how stridently health-and-wellness trends integrate themselves into today’s prevailing food trends, indulgence always tags along for the ride. For so many consumers, this is a matter of balance—health and wellness vs. indulgence, trend vs. countertrend. And one of the primary countertrends to all things healthful these days is (still) bacon.
In November 2013, Consumer Reportspublished its findings regarding recent investigations into the best bacon in all of retail today—regardless of whether the product was a store or national brand—and 3 store brand bacon products got the nod among the 7 total products mentioned (of 15 tested)—an impressive showing for private label.
Top honors went to Costco’s Kirkland Signature bacon, deemed the only “excellent” product of the bunch. On the second tier was Trader Joe’s bacon, billed as “very good” (along with national brands Niman Ranch and Wright). Special consideration for healthier products was given solely to Walmart’s Great Value Lower Sodium bacon, as a “very good alternative.”
Private label bacon continues to sell well, with 11.97 percent growth in dollar sales for the 52 weeks ending December 29, 2013 per IRI. And with two store brands leading the category in terms of overall quality—not to mention value—it’s easy to see why.
But in order to maintain this momentum and capture more market share, quality needs to take the forefront for high-end store brand bacon products. A side effect of bacon’s popularity has been a growing shopper savviness regarding quality metrics. In its description of the top-rated Kirkland Signature product, Consumer Reports noted, “It crisped up nicely and consistently had balanced fat and meat flavors complemented by wood smoke and a hint of sweetness.”
This quality metric bears careful consideration for all private label products in the R&D pipeline today. Shopper expectations continue to escalate, and the competition is fierce.
Eye on the National Brands
National brands, along with foodservice, continue to make breakfast a priority—and sandwiches pose a significant growth opportunity. Technomic reported in 2013 that breakfast sandwiches were up 8.1 percent annually on the menus of the top 500 limited-service restaurants, and that one-third of consumers eat breakfast sandwiches at least once a week. Here are some new national brand entrants into the fray:
• Hillshire Brands—Jimmy Dean Croissant Sandwiches, Egg With Red Peppers, Onions & Pepper Jack Cheese
• Kellogg’s—Bacon, Egg & Cheese Flatbread Sandwiches
• ConAgra Foods—Marie Callender’s Country Roll with Ham, Egg & Monterey Jack
• IHOP—IHOP at Home Egg, Canadian Bacon & Cheese French Toast Breakfast Sandwiches