The Business of Breakfast

By the 1920s, Edward Bernays and Dr. John Kellogg had sold the world on a now-iconic credence: breakfast is the most important meal of the day — at least when it comes to your health. In the following decades, American families wolfed down their take on the “balanced meal,” but those bowls of cereal and plates of bacon, eggs, and toast were consumed mostly at home. It would be decades before breakfast became as popular on restaurant menus as lunch or dinner in the full-service dining sector.

In the past few years, a wave of restaurant owners in metropolitan areas across the United States has finally taken Bernays and Kellogg’s advice. It’s just that, for these restaurants, “health” has come to refer more to customers and profit than calories and cholesterol.

“Breakfast is an opportunity to meet people, to draw them into our universe,” Adam Landsman, one of the co-founders of the Williamsburg all-day restaurant Sunday in Brooklyn, says. “Breakfast tells a story of what we’re doing here all day.” Since opening in the fall of 2016, Sunday in Brooklyn has maintained its popularity as an all-day dining destination and gold-mine for the Instagram-obsessed.

Despite the seeming pervasiveness of avocado toast and bottomless mimosa brunch today, upscale and casual full-service restaurants offering weekday breakfast options were, well, an anomaly until 2010. Fast-food options like McDonald’s, mid-level chains like IHOP, and diners across the country have offered customers breakfast staples like hotcakes, eggs, and toast for decades. But thanks to an increase in freelance workers (what many are calling the gig economy) and telecommunication — perhaps a result of the financial crisis of 2008 — breakfast has become the new frontier for innovative restaurateurs. High-profile chefs like Jean-Georges Vongerichten and trailblazers like Jessica Koslow of Los Angeles’s wildly popular Sqirl are finding creative potential and profit in breakfast, leading a trend that’s redefining the most important meal of the day.

abcV/Official

Earlier this year, the NPD Group, a food and consulting research firm, announced in a press release that out of the three meal times, only breakfast has seen a growth in traffic. Bonnie Riggs, a restaurant industry analyst at NPD Group, said that breakfast visits for the year ending in March 2017 had increased by 1 percent, although admittedly 80 percent of this has been attributed to quick-service restaurants like McDonald's and Taco Bell.

“It’s been the only bright spot in the industry and it’s been that way for years,” says Riggs. “So [even full-service venues] are trying to take advantage for a growth trend.”

Reports from other food industry research firms like Technomic are even more optimistic. Technomic’s 2016 Future of FSR Consumer Trend Report found that 22 percent of consumers are more likely to visit full-service restaurants in the daytime hours than they were two years ago.

Patricia Cobe, a senior editor at Restaurant Business, a b2b magazine and sister operation of Technomic, notes that one of the main costs — labor — in theory isn’t a huge burden if a restaurant wants to extend its hours. “Operationally, they don’t have to pull in a lot more staff,” says Cobe. “People in the morning starting prep, prep cooks, can do the menu pretty easily. Most breakfast dishes aren’t that complicated.” Cobe added that coupled with low labor costs, high margins for breakfast are feasible because the cost of goods sold (eggs, bacon, bread) are lower.

“Eggs are one of the cheapest ingredients around right now, and they can up-charge and can make a really great profit,” says Cobe. “[Restaurants] can sell egg dishes for like $15.”

Whereas the first meal of the day used to be confined to traditional staples like eggs or pancakes, in recent years there has been more demand for options like grain bowls as well as heartier offerings like breakfast burgers (usually a burger topped with a fried egg and bacon). A report by Technomic found that 38 percent of diners between the ages of 18 and 34 “enjoy eating breakfast foods that are often associated with lunch or dinner, like pizza, burgers or grilled chicken sandwiches that have breakfast ingredients added.”

Kyle Chamberlin, a project manager at the food industry research firm Datassential, says that even kale salad, which is more traditionally associated with lunch, is one of the fastest growing breakfast items. It appeared menus 400 percent more often in 2017 compared to 2012; grain bowls, similarly, increased in popularity since 2012, to the tune of 112 percent.

“Just applying the bowl format to breakfast, it’s something really flexible,” Chamberlin says. “And the word bowl is so ‘hot.’”

Sunday in Brooklyn/

As with all data, these numbers represent an average. For some of the newer all-day restaurants like Koslow’s Sqirl and Vongerichten’s new plant-based venture abcV in New York — which offer creative, and often labor-intensive, takes on morning fare — increased labor and food costs can be a major challenge.

“It’s really hard,” Jessica Koslow, the founder of Sqirl, says of being open from sunrise until sunset. “It’s hard on your staff, because the hours are longer. It’s not a 6 to 11 a.m. service — it’s an eight-hour service — with people coming in all day.”

Koslow explained that for many restaurateurs, the decision to serve breakfast means weighing a handful of factors, including customer demand and kitchen logistics. Space constraints in the kitchen and labor-intensive menu items might mean restaurants have to serve more diners to cover all of the costs. Koslow says that she has to clear approximately 800 customers a day to break even, compared to the 300 heads needed to break even for a typical night service restaurant.

If a venue wants to serve breakfast options on top of lunch and dinner, there's also the problem of prep time and space, and whether it’s possible to juggle the different menus while continuing to serve customers. “You have to define what your restaurant is,” Koslow adds. “For us, we need the space to prep, to make jam [for the next day]. We’re making jam from 6 p.m. on.”

“This trend of going out during the day happened during the last recession when people didn’t have money to afford to go out to dinner, so it became easier for people to afford to go out to lunch,” Koslow says, noting that when people go out, they realize that they’re often paying for the nightlife experience, which is almost always much more expensive. “The decision becomes: ‘Am I going out in the day or at night?’” A number of experts interviewed for this piece echoed Koslow’s view, saying that lunch and dinner sales went down, while breakfast (or brunch) sales went up in the aftermath of the recession.

In major metropolitan cities, rising rents for commercial and restaurant spaces mean it makes sense for restaurateurs to try to squeeze every last cent out of their square footage. Rather than eating that increased rent, some restaurants, after doing the math on a breakfast menu, find that tacking on extra labor and food costs might translate into enough revenue that helps to compensate for increased overhead.

Of course, that doesn’t mean chefs aren’t getting innovative; breakfast may be the new dinner in terms of creativity. At abcV, customers might descend upon the downtown Manhattan location for a $12 morning shake to-go, but they can also sit down to explore any one of Vongerichten’s globalist, vegetable-heavy plates, ranging from sweeter sea buckthorn and persimmon bowls to dosas to a few staple egg preparations (albeit with original topping ideas like Danish rye or pickled chili).

“[I]t worked,” Vongerichten boasted about the success of his unorthodox breakfast venue in a recent interview with Eater. “We have 60 seats and serve more than 150 breakfasts a day." Vongerichten’s success may come from the fact that many of the ingredients seen on the breakfast menu can be reincorporated to make lunch and dinner menu items. The fluidity in ingredients helps assuage the problem of space when it comes to kitchen preparation between meals. But abcV has an advantage many other standalone restaurants lack: It is located within ABC Carpet & Home, a popular retail store that’s always full of hungry shoppers. (Vongerichten already operates two other restaurants in the space, ABC Cocina and ABC Kitchen.)

Hutch Cafe/Facebook

Cobe of Technomic says one of the big drivers behind the success of breakfast menus is that a significant number of consumers are craving breakfast at untraditional times. This idea resonated with restaurateur Marc Wuenschel, who in 2016 took a cue from McDonald’s all-day breakfast strategy when he opened Hutch Café. His second venue in the Hutch brand, which is located Chicago’s River North neighborhood, serves brunch all-day, seven days a week.

Although the weekday crowd is not as large as the weekend crowd — Wuenschel estimates that Hutch Café serves between 800 and 1,000 people each weekend — those who come in Monday through Friday are people have the luxury of being able to sit around for two hours or more. Think: business meetings, but also college students, and people without 9-to-5 jobs “who want to enjoy a bloody mary or mimosa on the patio.”

“It’s definitely attracting clientele that has disposable time on their hands,” Wuenschel says.

It’s a trend seen nationwide. Landsman of Sunday in Brooklyn, which offers brunch menus from 8 a.m. until 3 p.m., says that although the restaurant recently added a to-go window that serves $5 pastries and $10 breakfast sandwiches, much of the weekday traffic during the morning and lunch hours still comes from those who take the time to sit-down to eat.

“In Williamsburg, people aren’t necessarily working during certain hours,” Landsman says. “Everybody doesn’t begin work at 9 a.m. and leave at 5 p.m. Even at Vice [Media], which is nearby, a lot of those people don’t go in [until] 10 a.m., 11 a.m.”

For Koslow in LA, the growth in demand for all-day fare is exciting because it allows room to play.

“I love that so many places are opening because I want to see how breakfast changes,” Koslow says. “There’s been so much progress in dinner service, but I haven’t seen that in breakfast. I want to see how we’re pushing boundaries of what we eat.”

Matt Sedacca is a writer based in New York City.
Editor: Daniela Galarza