Illustration: Aïda Amer/Axios
America's most popular chains are spending millions and hiring thousands in the battle for the growing breakfast market.
The big picture: Restaurants are betting that expanding into the morning meal could turn into a windfall. Americans ate 102 billion breakfasts last year, per the research firm NPD Group — and breakfast is the only time of day that restaurant foot traffic in the U.S. is growing.
What's happening: In his company's most recent earnings call, McDonald's CEO Chris Kempczinski cited breakfast as his key focus for growth, saying, "We have to win at breakfast." Breakfast is already 40% of the fast-food behemoth's profits, Barclays’ analyst Jeffrey Bernstein told CNBC.
- Wendy's recently announced a major push into breakfast, which includes a $20 million investment and 20,000 new workers. The chain will unveil its menu in March and "anticipates its breakfast menu will ultimately account for 10% of total daily sales," the newsletter Morning Brew reports.
- Burger King and Taco Bell have also bolstered their morning offerings in the past few years.
- And even the chains that already own breakfast are trying new tricks. Dunkin' Donuts is teaming up with Beyond Meat (and Snoop Dogg) to roll out a plant-based breakfast sandwich. IHOP is debuting a fast-casual restaurant concept called Flip'd that serves up pancakes to people on the go.
Between the lines: Restaurants are honing in on breakfast in response to the rise of delivery in the food service industry, says Matt Godinsky, a research associate at Euromonitor International who's focused on food trends.
- Food delivery apps are cannibalizing foot traffic for lunch and dinner: Delivery sales are projected to rise to $76 billion by 2022, according to a projection by the research firm Cowen and Co., cited by Bloomberg. But "breakfast is the one meal that has been relatively untouched by the rise of delivery," Godinsky says.
- To that end, breakfast remains a final frontier for chains that want to build relationships with their diners by actually getting them to come into the store. "Restaurant brands are trying to seize this opportunity and get ahead of the competition by expanding their offerings for a mealtime that has more room for growth."
The bottom line: Fast-food chains' forays into breakfast also plays into the growing "breakfast-for-dinner" trend. People are open to eating traditional breakfast foods all day, so expanding the morning menu could translate to sales in the afternoon and evening, too.