Dive Brief:
- IHOP has added burritos & bowls to its menu, with six different builds available for breakfast, lunch or dinner, according to a press release. The menu items start at $5.99 and include The Classic, Country Breakfast, Spicy Poblano Fajita, Southwest Chicken, New Mexico Chicken and Spicy Shredded Beef.
- The company added the new items to meet guests' needs for more portable items ideal for takeout and delivery, Chief Marketing Officer Brad Haley said in the release.
- IHOP noted Datassential research showing that burritos are the No. 1 fastest-growing breakfast menu item in the U.S. According to Tastewise, burrito consumption grew nearly 14% between May 2019 and June 2020.
Dive Insight:
IHOP's new portable menu items caters to the restaurant's growing off-premise business. During parent company Dine Brands' most recent Q3 earnings call, Stephen Joyce, CEO of parent company Dine Brands, noted that off-premise comp sales increased by 154% at IHOP.
"The pandemic has caused a shift in consumer behavior and changed[d] how guests access our brands. We believe the convenience of takeout and delivery will remain appealing to our guests even as dining room restrictions are eased across the country," he said during the earnings call.
IHOP President Jay Johns told Forbes last year that off-premise sales were incremental pre-pandemic but that dine-in sales are now incremental.
"I think consumer behavior will shift permanently to to-go and delivery because people … like them," he said. IHOP is even looking at new real estate prototypes to meet higher demand for to-go orders.
Breakfast bowls and burritos also reflect a broader off-premise strategy when considering new data from DoorDash, which shows breakfast burritos among one of the most ordered food items from 2020. The National Restaurant Association also found that bowl meals are on the rise because they meet consumer demand by enabling a "build your own," customizable model. They also meet operators' needs because they can emphasize lower-cost ingredients or switch out components based on food cost.
But IHOP still has a hill to climb, with Q3 comp sales down more than 30%, which matches the full-service category's transaction declines overall in December. Still, the chain's continued focus on off-premise channels while more consumers seek breakfast at home seems a savvy strategy.
The casual chain isn't the only concept innovating to appeal to an off-premise consumer. Last year, Its sister brand Applebee's started selling its signature Mucho Cocktail to-go and launched a new virtual brand, Neighborhood Wings by Applebee's, at 700 restaurants as part of a pilot in partnership with Grubhub, Joyce said during the earnings call. Denny's also recently rolled out two virtual brands, The Burger Den and The Melt Down, to meet higher demand in its off-premise channels, with weekly sales more than doubling compared to pre-pandemic levels.
