Dive Brief:

• Fewer diners view breakfast as a static daypart, with 52% of consumers defining the meal by time of day compared to 56% in 2017, according to a Technomic report. Thirty-one percent of diners also report they are buying breakfast outside of the traditional daypart more often. 
• Fifty-five percent of diners' breakfast orders out include coffee, and 60% of consumers pass on breakfast at least once during the workweek.
• "Moving forward, brands must differentiate themselves from competitors to drive customer loyalty," Anne Mills, senior manager of consumer insights at Technomic, said in a statement. "Adapting off-premise capabilities and creating innovative menus to meet consumers' increasing needs for convenience, uniqueness and health will be key to success amid the breakfast wars."

Dive Insight:

As diners continue to shift breakfast dollars out of the home, major chains are poised to ramp up their morning offerings and cater to demand for on-the-go convenience. According to the NPD Group, the daypart is outpacing the overall industry's growth. 

Panera's breakfast delivery, for example, has grown 250% and is its largest delivery sales driver. The chain scaled delivery nationwide last spring and began testing delivery in 231 cities in November 2018. Since then, it has expanded breakfast delivery to over 600 restaurants, Panera's chief growth and strategy officer Dan Wegiel told Restaurant Dive in a recent interview. 

Wendy's is also looking to make a splash once again in the breakfast category, with plans to launch a new breakfast menu in Q1 2020. The QSR expects the daypart to account for 10% of its total daily restaurant sales and for it to be profitable for operators from the outset. Wendy's will only offer breakfast for pickup when restaurants first open in the morning because offering breakfast for both pickup and dine-in previously created operational challenges during this time. To boost potential success, the chain is investing $20 million in the launch, which includes hiring 20,000 new workers and advertising. 

This cross-category interest in the daypart signals a new battleground in the crowded restaurant space, which is already pushing brands to differentiate with flashy limited-time offerings, on-trend meals and experiences to capture diner loyalty. Consumer interest in coffee at breakfast is also giving coffee chains a path to growth within the daypart, with Dunkin' recently launching its Beyond Sausage breakfast sandwich nationwide. 

Plant-based could also drive traffic during breakfast, as it has for lunch and dinner dayparts. Tim Hortons also offers plant-based breakfast options, but the trendy category is still fairly underrepresented in the morning, despite demand. According to the Technomic study, 32% of millennials would like a vegetarian or vegan offering for breakfast, compared to 20% of all consumers. 

Still, breakfast doesn't come without challenges. McDonald's has struggled with stagnant breakfast sales — which generate 24% of its overall sales — and long drive-thru waits, and recently gave frustrated operators the opportunity to choose which breakfast items they want to include on the restaurant's all-day breakfast menu. Wendy's may also give operators the option to opt out of breakfast after one year, likely in anticipation of similar franchisee headaches. If chains can balance the practical challenges that come with breakfast preparation and offer competitive menu items, however, breakfast could be a lucrative segment.