Despite economic headwinds, restaurant sales start their reignitions

While the U.S. economic recovery remains fragile, the restaurant industry is finding ways to spell relief. The FoodserviceLandscape in the U.S., our outlook report for the restaurant industry, projects that sales will grow 4.2% to $487 million in 2012, on the heels of 6.1% market growth in 2011.

Nonetheless, operators must continue to experiment aggressively with menu pricing strategies and focus on courting minority racial/ethnic groups—and prepare for profit margin compression.  The onus of food commodity price increases is sizeable enough to threaten the restaurant recovery unless restaurant operators are prepared to bite the bullet on profit margins.  Continuing a trend that gathered momentum in 2011, many operators will need to maintain menu prices at the expense of higher margins or risk losing customers.

In addition, demographic-specific employment trends will continue to have disproportionate consequences and create distinct opportunity micro-climates by restaurant industry segment and geographic zone.

Although the housing market remains in a trough, consumer spending is rising modestly. Household debt ratios have declined, which bodes well for the discretionary income growth needed to increase guest traffic and perk up guest check averages.  Food and accommodations spending is outpacing other personal consumption expenditures.  Moreover, restaurant companies will increasingly leverage the technological and marketing power inherent in the smartphone. Location-based services such as Foursquare are a relatively new aspect of social media, but we expect quick uptake to continue among consumers and foodservice operators.

By segment, full-service restaurants posted the highest growth rate, at 8.1%.  Fine dining had a moderate rebound in 2011, though the hill back to 2007 spending levels remains very steep. Growth in the restaurant breakfast (5%) and snack (8%) customers has outpaced population growth since 2008, and the overall percentage of consumers using restaurants for these occasions has increased—although the reverse trend holds among Generation X.  All natural and organic are not only the most prevalent health-related claims on restaurant menus, but their menu presence grew during 2007-2011.   In 2011 menus, 15.7% of restaurants featured a natural claim and 13.5% featured an organic claim.  Not surprisingly, the tendency to market these claims on menus rises with restaurant price points.

Consumers age 65 or over are spending significantly more (13%) on limited-service restaurants than they did in 2007. Millennial generation consumers, at the other end of the age spectrum, are spending significantly more on limited-service restaurants as well as full-service restaurants.

By household income level, those with an income of $100K or more generate over one-third of spending on meals at restaurants, even though they comprise only 17% of all households.  The number of higher-income households and of lower-income households has grown since 2007, while the number of middle-income households declined. Because restaurant spending correlates to household income, the crimping of the middle class is obviously and inevitably a major hurdle for the industry, as for the national economy overall.  

Packaged Facts estimates that the number of restaurant visits grew by 3% during 2008 to 2011, based entirely on population growth, not usage increase.  Even then, restaurant operators across restaurant segments contend with the increased numbers of lower-spending guests and decreased numbers of higher-income guests, which has translated to higher volume but lower guest check averages.

And food commodity price increases could set the restaurant industry back, threatening the modest sales recovery seen in 2010 and 2011. Such price increases have the potential to erode the pricing gains restaurants have made relative to grocery prices, creating increased incentive for consumers to eat at home, and throw into disarray the delicate balancing act so many restaurant operators now walk in planning their menu strategies, which rely more now than ever on hitting the appropriate pricing and food margin mix.  Facing reduced consumer discretionary income and higher rates of unemployment, some of the industry’s major chains are pursuing sales growth by creating sister brands or new brands that are cut from fast casual cloth. Enticements include expansion opportunities, reduced capital investment, and new customer bases.

Most importantly, further employment gains are needed to spur overall restaurant industry growth. Consumers age 18-24, those without high school diplomas, and African-American consumers in particular remain saddled with unemployment rates much higher than the average.

Trends in U.S. Military and Correctional Facility Food and Foodservice

Featured Publication:
Trends in U.S. Military and Correctional Facility Food and Foodservice

For food and foodservice manufacturers, suppliers and operators, speaking the language of the military is big business, which Packaged Facts’ Trends in U.S. Military Food and Foodservice helps participants translate into increased sales.

Fact: The U.S. Department of Defense is the nation’s largest employer and a gateway to more than 3.2 million people.

Fact: The scope of military reach extends to the more than 12 million military members, families and retirees who depend on its wide net of retail, military installation, and combat food and foodservice operations, which have an international reach that incorporates everything from food and beverage supply to foodservice management to restaurant franchising.

This new market study assesses the attitudes toward various on-installation and off-installation foodservice options as well as, analyzes off-site foodservice spending among military service members, military spouses, civilians and retirees.

 
The report covers food and foodservice operations at military installations, including mess halls, exchanges and recreational facilities; and food and foodservice field training and contingency operations. While it focuses primarily on domestic military food and foodservice, the report also presents global U.S. military foodservice sales and trend analysis.
 
As a bonus, the report also includes an overview of the U.S. correctional facilities foodservice market, including growth drivers, market sizing and forecasting, prison cost trends, state correctional facility budgeting trends, state prison count reduction strategies, foodservice cost analysis, and foodservice cost cutting initiatives.

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Baked Goods: Culinary Trend Mapping Report

For the past several years, consumers have been soothing themselves with all manners of baked goods, ranging from freshly made pies and Parisian macarons to decadent cookies and oozing lava cakes - all while enjoying new twists on old favorites as well as a more varied selection of baked goods and flavors.

Despite recent economic difficulties, baked goods generally remain an affordable indulgence, and one consumers can access in many places. The recession hasn't prevented sales of baked goods from growing, as the market has been pushed by a variety of drivers: convenience, premium ingredients, global flavor twists, wellness and nostalgia/comfort.
 
In Baked Goods: Culinary Trend Mapping Report, Packaged Facts and the Center for Culinary Development use the CCD signature Trend Mapping technique to profile seven sweet and savory baked good trends that provide fresh ideas for manufacturers and restaurant operators to enliven stale offerings, spruce up the bread basket and add excitement to both the baking aisle and freezer case.

The seven sweet and savory baked good trends appearing across the Trend Map® include:

• Stage 1: The Micropatisserie
• Stage 1: Alfajores
• Stage 2: Popovers & Gougres
• Stage 3: Specialty Frozen Desserts
• Stage 3: Better Baking Mixes
• Stage 4: Pretzel-mania
• Stage 5: Gone Gluten-Free

More | View Table of Contents

More Food Service Operators to Use Social Media

February 24 2011 | Kathy Crosett

Using a landline phone to make restaurant reservations is so 20^th Century. These days, consumers expect to engage with restaurants online and through mobile devices. Restaurant operators who don’t build up their online presence and brand loyalty are missing an opportunity to generate higher sales. Even outlets that have not traditionally advertised are finding new business coming from social media efforts.

The new Social Media and Technology in the U.S. Foodservice Industry: Trends and Opportunities for an Emerging Market report by Packaged Facts explains that everything has changed in the food service industry. Don Monturori, publisher of Packaged Facts says, “We believe the restaurant industry is in the midst of being shaped by the convergence of the mobile, yet always connected, consumer; location-based and context-aware technological innovation, and mobile payments, which already demonstrate the potential to redefine how to cultivate restaurant guest loyalty, incentivize dining occasions, and better tailor marketing messages.” As proof of this new trend, consider these facts:

• Almost 1/3^rd (31%) of consumers who frequent restaurants for eat-in or take-out meals use their computers to place orders.
• About 1/5^th (21%) of consumers use mobile phones or other devices to place restaurant orders.

Facebook and Twitter are the leading social media outlets for restaurant operators to conquer. Packaged Facts analysts point out that food service operators should focus on location-based promotions this year as active Facebook users are ‘frequently on the go’. In addition, Twitter can be used to reach “a younger, more urban, multi–cultural audience.” Studies show that Twitter has significant appeal for emerging demographics – Hispanics, African Americans and Asians. And these social media tools aren’t just being used by traditional restaurants. One of this year’s most interesting trends is the growing number of food trucks that serve unique and ethnic fare in urban environments. These lower-cost outlets are turning to Twitter to promote themselves.
As the restaurant industry battles to regain the losses suffered during the recession, most operators will be turning to lower-cost forms of promotions. For many, social media seems to fit the bill.

[Source: Facebook, Twitter and Smartphones Lead Social Media-Fueled Innovation within U.S. Foodservice. PackagedFacts.com. 8 Feb. 2011. Web. 24 Feb. 2011]


More Food Service Operators to Use Social Media - marketingforecast.com

Social Media and Technology in the U.S. Foodservice Industry: Trends and Opportunities for an Emerging Market : Packaged Facts

The convergence of social media, mobile devices and consumer lifestyles is ushering in a new era of restaurant-consumer interaction, opening new doors for restaurant operators to build customer relationships and sales opportunities, according to Packaged Facts’ Social Media and Technology in the U.S. Foodservice Industry: Trends and Opportunities for an Emerging Market.
Tethered by the Internet, restaurant operators are increasingly interacting with restaurant consumers in real-time—at work, at home or in mid stride. This provides significant opportunity to shape consumer food choices not only as they are being made, but also in proximity to a restaurant seeking that consumer’s business.

This Packaged Facts report provides the insight and analysis foodservice market participants need to understand and leverage social media and technology platforms to enhance their bottom lines. The analysis includes the following:

* Social Networking Platforms
* Consumer Review Platforms
* Food Blogs And Food Photography
* Technologic Dining In Action
* Smartphones And Applications
* Online Ordering Platforms
* Anatomy Of The Mobile Restaurant Ordering User
* Anatomy Of The Urban Diner
* Using Social Media To Effect: Restaurant Case Studies

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High Quality Prepared Food Departments Add Dine-in Cafes to Drive Traffic at Grocery Stores

Prepared food bar at Wegmans.  Photo Courtesy of
toujourspretamanger.com

Been to a Wegmans lately?  The Market Cafés have pizza, freshly-made sushi, burritos, Thai food, and vegetarian choices for dining in or taking home. And Kroger took out the underused salad bars to make way for prepackaged salads, sandwiches, and carnitas. My own local Harris Teeter offers chef-staffed prepared food stations.  Imagine that, a live person ready to make my perfect California roll.

As a self-proclaimed 'foodie' you would think I'd stick to the trendy new restaurants in downtown D.C. But on today’s shoestring budget that’s not possible.  Instead, I find myself eating what I want at attractive, upscale bistro area of my local grocery store.

The traditional grocery channel made 57% of retail food & beverage dollar sales in 2010, according to market research publisher Packaged Facts. Through their in-store foodservice options, traditional grocery stores stand to further grow in share of U.S. food & beverage sales.

Grocery stores are aiming to make shopping more appealing by providing upscale restaurant-like experiences to customers. In order to attract as many shoppers as possible, stores are providing a wide range of restaurant-style foods and amenities: wood-fired pizzas, made-to-order soups, sandwich and sushi bars, and dining areas. And the eager (read: hungry) shoppers who want to grab a quick meal while grabbing the groceries, take a break for lunch, or get a snack before the drive or walk back home are eating it up.

Packaged Facts analysis expects to see food retailing and foodservice channels continue to converge around fresh prepared foods, working fervently to make consumption more convenient. As a result, the competitive lines between grocery stores, restaurants, convenience stores, and other channels will continue to blur in a U.S. food & beverage retail market projected by Packaged Facts to reach nearly $700 billion by 2015.

At the end of the day, when the sushi stand has been cleaned and the fresh olive bar has closed, what else will retailers be looking to add? Besides adding to their variety of on-the-go foods, deli and prepared food departments will expand with easily accessible take-out entrances and check-out lanes; curbside pick-up and call-ahead ordering; website and smart phone apps for ordering.

Well, that’s where its heading, but for me its lunch-time and I’m heading over to the Parisian café at my local Whole Foods Market. Or maybe a grilled vegetable sub at Teeters? I could really go for some sushi-…

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Catering Services on the Rebound, Consumers Seeking Healthier Options

January 27 2011 | Shannon Bryant | Ad-ology

Though the recession brought a period of famine to the catering foodservice industry, the feast is at hand as growth initiated in 2010 will continue through 2012 due to aggressive expansion into the catering space by limited–service establishments, the return of business event–driven spending, higher wedding spending, and a moderately healthier consumer, according to “Catering Trends in U.S. Foodservice,” by market research publisher Packaged Facts.

“Self–standing catering operations dominate sales, but full–service restaurants, limited–service restaurants and snack and beverage concepts also contribute significantly. Driven by aggressive catering launches and expansions, our experts view restaurant–based catering as a growth area into 2012,” says Don Montuori, publisher of Packaged Facts.

Catering revenue exceeded $14 billion in 2010 for an increase of 9% over a stormy 2009. Sales are expected to increase 9% and 7% in 2011 and 2012 respectively. Catering at foodservice and drinking places generated 75% of the catering market size, or $11 billion, in 2010, up 8%. Limited–service establishments are expected to lead catering sales growth through 2012 due to the segment’s ability to leverage moderate menu pricing structures, provide portable fare, and offer in-house operations capabilities.

The recession brought declines in both corporate and consumer spending on catered events. However, Packaged Facts predicts that as the economy continues to recover, businesses will be eager to build revenues again and such eagerness may indirectly fuel the catering business through increased sales meetings, business travel, and convention attendance. Recovery will also spur consumers to entertain with more catered affairs. Weddings, graduations, births, funerals, and other milestones will return as catalysts for consumer spending on catering.

Meanwhile, consumers seeking healthier options have caused a significant change in catering, offering an advantage to companies that highlight the health benefits of their products. Key among these is Subway, which has long promoted the low–fat sub sandwiches on its menu as part of its marketing plans. Other caterers are also seeing a preference for healthier choices, with consumers opting for Greek yogurt, granola, and toasted nuts instead of bagels and donuts, for instance.

More Information> https://www.packagedfacts.com/Catering-Trends-Foodservice-2848313/


[Source:  "Catering Trends in U.S. Foodservice," Packaged Facts.  11 Jan. 2011.  Web.  18 Jan. 2011.] Full Article: http://www.marketingforecast.com/archives/9777/trackback

The Education Foodservice Market in the U.S.: Elementary, Secondary and Higher Education : Packaged Facts

With restaurant foodservice sales generally under pressure, education foodservice sales remain a bright spot: Packaged Facts forecasts education foodservice sales at primary, secondary, and postsecondary schools will reach $41.15 billion in 2010, up 2.5% from 2009, according to The Education Foodservice Market in the U.S.: Elementary, Secondary and Higher Education.

We view federal food programs and student loans as revenue bulwarks that have helped soften the recessionary blow on educational foodservice, as they have helped shield it from swoons in discretionary spending. In response to the children’s obesity crisis and propelled by First Lady Michelle Obama’s Let’s Move campaign, we believe that K-12 foodservice will continue to receive significant attention—and funding—beyond the Obama administration’s first term. The wild card concerns state and local revenue: With property tax revenue declining steeply and with many budgets facing significant revenue shortfalls, primary and secondary schools are in a real fight for local and state budgetary dollars.

Within the next five years, nutritional change will continue to aggressively evolve, as policy makers ready their revisions to school meal nutritional guidelines. We believe these changes are widespread and significant enough that they will ripple out of schools and into the home, helping to reshape how consumers interact with food.

As for today’s college students, the children of the Restaurant Age expect more than ever from their foodservice programs. But with more families in economic straits and lower college enrollment rates ahead, college foodservice programs will need to compete more aggressively to grow revenue.

The Education Foodservice Market in the U.S.: Elementary, Secondary and Higher Education provides the insight industry participants need to understand today’s evolving educational foodservice market, by mapping key trends and policies shaping the K-12 and university sales growth and by profiling a range of school district programs, college foodservice programs, and educational foodservice contractors.

Packaged Facts forecasts educational foodservice to grow 2.7% in 2011 and 2.9% in 2012, with slightly higher estimates for college foodservice than for K-12 foodservice.

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Breakfast Trends: Culinary Trend Mapping Report Think a restaurant breakfast is just an Egg McMuffin consumed mid-commute? Think again. Breakfast is being reinvented chefs and industry innovators, many of whom are interested in offering an alternative to the typical diner or quick-serve-restaurant morning meal. Though the majority of breakfast business is done on the go, these trendsetters are still making an impact, serving upgraded breakfast sandwiches and mixing organic ingredients and global flavors into the most important meal of the day. Fact is, breakfast isn’t just hot: it’s cold, eaten in the form of whole grain cereal and customized granola; it’s gourmet, made into elaborate artisan breakfast sandwiches; it’s a beverage, served all day in the guise of salad with poached eggs and bacon or dessert waffles. Breakfast is so much more than it used to be—and it’s more popular than ever in foodservice, despite the economic downturn. Fierce competition in every sector for the breakfast dollar is pushing innovation in today’s breakfast foods, along with a number of key drivers exemplified in the report’s trend profiles: Artisan Breakfast: These traditional breakfast dishes are made by hand, using the freshest ingredients and incorporating global flavor twists. Third Wave Coffee: Coffee enthusiasts are going beyond espresso to reinvent this ancient caffeinated beverage, creating a superlative cup of Joe that’s brewed with care from only the best beans. New Whole Grains: As consumers are looking for gluten-free alternatives and better-tasting, healthful breakfast options, whole grain cereals and breakfast pastry are diversifying beyond whole wheat. Waffles Gone Wild: Waffles can be used as a carrier or simply solo, and are taking on new savory and sweet forms everywhere from fine dining to street food. Breakfast Pizza: America’s favorite savory pie gets a breakfast twist, topped with ingredients such as eggs, bacon--and even fruit! Eggs All Day: Eggs are a flexible protein that can be healthful or decadent, down-home or gourmet, and they’re being adapted for all dayparts by magazines for home cooks. Breakfast in a Bowl: Breakfast foods ranging from the savory to the sweet, combined together in a bowl for a portable, convenient, one-size-fits-all breakfast. More | View Table of Contents

students are 60% more likely than average to have dinner foodservice at a grocery store or supermarket

As part of our foodservice reports series, we’ve paid close attention to the increasing competition restaurants face from food retail prepared foods. According to Dinner Trends in U.S. Foodservice (October 2010), prepared foods are succeeding with students, who are limited-service restaurant stalwarts. Our proprietary consumer research indicates that students are 60% more likely than average to have dinner foodservice at a grocery store or supermarket, and about 40% more likely than average to have dinner at a convenience store/gas station.

So, while students may not go grocery shopping as often or spend as much there as consumers who have more established households, they clearly respond to convenience-minded offerings when they visit. We believe this provides significant opportunity for food retailers, not just because students are generally more convenience-driven but also because they are more health-conscious. As a group, students may be prone to say they want healthier fare and then make contrarian food decisions—a function of impulse, cost-considerations and the metabolic hubris of youth. But as more and more university foodservice programs have come to understand, students will embrace more healthful options if they meet cost and quality parameters—and the supermarket is optimally positioned to leverage own-branding to provide healthful fare.

But the most significant benefits may run longer-term. Having grown up during what we have coined “The Restaurant Age,” students aged 18-24 are as far removed from routine grocery shopping (and home cooking) as any generation before them. By providing prepared foods that meet their needs, food retailers not only drive a wedge between students and restaurants; they can also leverage that wedge to bring them into the home-cooking fold, by educating on meal planning and meal budgeting, or by using the prepared foods space as a bridge to introduce easy-to-cook meals that blend old-fashioned standards such as mac-and-cheese and spaghetti with new-found international and/or aspirational ingredients—for a reasonable cost, of course.More>

Chicago breakfast café opening - Atlanta Business Chronicle

Breakfast day part restaurant sales reached $37.2 billion in 2009, according to an August report from Packaged Facts, a consumer research firm in Rockville, Md.

Packaged Facts predicts breakfast sales will reach $37 billion in 2010 and $37.7 billion in 2011.

“While these figures may appear tepid at first glance, when viewed against the backdrop of lower overall restaurant sales, the breakfast day part has fared relatively well, taking share from the lunch and (especially) dinner day parts,” the report said.


Read more: Chicago breakfast café opening - Atlanta Business Chronicle
Chicago breakfast café opening - Atlanta Business Chronicle

NEW Proprietary Data: The U.S. Foodservice Landscape 2010: Restaurant Industry and Consumer Trends, Momentum and Migration

The U.S. Foodservice Landscape 2010: Restaurant Industry and Consumer Trend Momentum and Migration provides unique insights into consumers’ evolving relationship with the foodservice industry, helping restaurant operators position their brands—and menus—accordingly.

Highlights of the study include:
1) directional consumer behavioral and attitude analysis via Packaged Facts’ proprietary Consumer Restaurant Outlook Tracker, which identifies the consumers who will lead near-term foodservice growth;

2) Via its Consumer Restaurant Usage and Spend Tracker, unique analysis of meal usage by restaurant type, party size, and party spend, to help target consumers who can bring in higher guest check averages;

3) Share of Stomach sales analysis that trends foodservice sales by segment against its retail counterpart, and provides quarterly same-store comparable trends and guest traffic frequency trends for more than 50 restaurant brands by segment—all of which provide a thorough sense of where the industry is heading; and

4) current and future menu pricing strategies and detailed consumer brand affiliations, to provide competitive insight.

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Hispanic Food and Beverages

Hispanic Food and Beverages in the U.S.: Market and Consumer Trends in Latino Cuisine, 4th Edition : Packaged Facts
Burritos, enchiladas, quesadillas—you don’t have to go to Mexican restaurant or scour the ethnic foods aisle in your supermarket if that’s what you’re in the mood for. Hispanic foods and beverages have become so common a part of the American menu many consumers would have to think twice before characterizing them as a distinct ethnic cuisine. Are there any food courts in sports venues these days that don’t offer nachos as standard fare alongside hotdogs? Is there a supermarket or grocery anywhere in the country that doesn’t carry tortilla chips and salsa, even if there are no Hispanic consumers in their community?

With Hispanic foods and beverages achieving such prominence, it’s no wonder that sales were close to $7 billion in 2009, according to the recent report from Packaged Facts titled “Hispanic Food and Beverages in the U.S.: Market and Consumer Trends in Latino Cuisine, 4th Edition. This represented an increase of 28.7% from $5.4 billion in 2005. In addition, Packaged Facts predicts continued aggressive growth through 2014, with sales projected to top $9.5 billion in 2014.

The report details how the expanding appetite for Hispanic food and drink among non-Hispanic Americans combined with the rapid increase in the Hispanic population is driving sales of Mainstream Mexican products along with Authentic Hispanic and Nuevo Latino foods. Expanding distribution channels, the rise of the “foodie” and other key trends affecting the marketplace are described along with the changing demographics and other factors driving growth.  In addition, the report profiles major marketers, both in the manufacturing and foodservice arenas.

Food service lunch spending forecast to rise

FoodBusinessNews.net, September 8, 2010
by Keith Nunes
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Consumer spending on lunch served in restaurants is forecast to rebound 2% in 2011 and reach $114 billion following two years of recession-related declines, according to “Lunch Trends in the U.S. Foodservice Market,” a report produced by research publisher Packaged Facts. After rising to $119 billion in 2008, lunch daypart sales declined 4% in 2009, and sales are projected to fall another 3% in 2010 to $112 billion.

“This has been a very tough climate for lunch food service and its counterparts, and that won’t change overnight although change is coming," said Don Montuori, publisher of Packaged Facts. “Growth in the lunch daypart still faces a few near-term challenges, including the impact of unemployment on work-driven restaurant routines, bargain-minded consumers who weigh the cost of a bagged lunch against the indulgence of eating out, and an industry environment in which players are chasing foot traffic at the expense of guest check through the extreme push of value meal deals.”

A survey of consumers conducted by Packaged Facts showed that interest in lunchtime meals priced under $5 and under $10 is stable across household income brackets, suggesting price sensitivity among a large segment of diners regardless of their personal wages. Respondents aged 18 to 24 are 60% more likely than average to choose a restaurant because it offers meals for under $3.

Limited time offers and menu options that allow consumers to bundle their meal components for a set price are two menu strategies that have proven attractive to consumers, according to Packaged Facts. Examples cited in the report include Taco Bell’s $2 Meal Deal and Jack in the Box’s Pick 3 for $3 customizable limited time offer value meal.
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Read Food Business News Article

Value Pricing Breakfast Menus Helps Steady Daytime Restaurant Spending, Bodes Well for Future Growth

The most important meal of the day continues to face short-term challenges related to the recession, but market research publisher Packaged Facts' Breakfast Trends in the U.S. Foodservice Market predicts consumer spending on breakfast at restaurants will rebound from an anticipated downturn in 2010 to approach $38 billion in 2011, as current value menu pricing strategies influence future spending habits.

Fast food and QSR (quick-service restaurant) operators are playing the - price equals value - card for everything it's worth. By pushing the envelope with $1 deals, they risk enabling a pool of -extreme affordability- customers. But the upshot for breakfast is that it remains a relatively untapped daypart, so that traffic gained today may translate into additional revenue tomorrow, says Don Montuori, publisher of Packaged Facts. We believe that decisions by the likes of Denny's and Bob Evans to place everyday value for quality food at the forefront of their branding initiatives make a great deal of sense. Value pricing meets the reality of today's and tomorrow's lower-to-middle and middle-income consumers who frequent family restaurants. For breakfast, they are spinning full-service value menus and value in portion size.

Packaged Facts expects McDonald's foray into $1 breakfast menus to create pressure among other fast food/QSR players to match its lead an industry-wide trend previously glimpsed with the proliferation of non-breakfast $1 value menus. Burger King, Wendy's and Subway have already made major breakfast moves. The bottom line is that low cost resonates with restaurant breakfast users, with 31% of respondents to Packaged Facts' proprietary survey claiming they have been influenced by a maximum $3 price when selecting a restaurant for breakfast, versus 16% who placed a limit at $10.

Convenience influences consumer breakfast decisions, with convenience to work or errands, routine, and the need to get somewhere else quickly factoring in. Also relevant are breakfast menu features, such as getting a favorite menu item, wide variety, and healthy menu items. And, because more than half of U.S. adults drink coffee, restaurants have created value bundles that offer coffee with breakfast food to increase foot traffic.

Even though restaurant sales fell during the recession and initial recovery, breakfast has fared relatively well and has taken market share away from both the lunch and dinner dayparts. Packaged Facts found that only 34% of restaurant goers had eaten breakfast at a restaurant in the past month and an even smaller percentage of the general population said the same, which means the industry has an opportunity to woo the more than 150 million adult consumers who do not use restaurant breakfast.

Breakfast Trends in the U.S. Foodservice Market provides unique insights into consumers' evolving relationship with the breakfast daypart, helping restaurant operators position their brands and menus for consumers in 2010 and beyond. Highlights of the study include directional consumer behavioral and attitude analysis via Packaged Facts' proprietary Consumer Restaurant Outlook Tracker; proprietary analysis of average meal spend by restaurant type and by daypart, with a focus on the breakfast daypart, to help target consumers who can bring in higher guest check averages; restaurant and menu selection analysis, driven by Packaged Facts' proprietary consumer survey results; and much more.

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