Battle for your breakfast buck: Fast food attacks cereal's supremacy

The invention of cereal more than 100 years ago transformed the average breakfast from a heavy, fat-laden pancakes-and-meat smorgasbord into a lighter, quick meal.However, after decades of dominating the breakfast tables of North Americans, cereal sales are falling and fast-food restaurants are trying to cash in on Canadians craving for an even more convenient morning meal.

Canadians are motivated by convenience, said Robert Carter, executive director of market research companyNPDGroup, adding that they visit drive-thrus far more than Americans.

That has helped drive the massive success of the breakfast sandwich in this country. It's the single-fastest growing menu item not just in the breakfast category, but Canada's entire restaurant market over the past five years, says Carter, and it's changing our morninghabits.

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Portable food you can eat on the run or at yourdesk is part of the breakfast warheating up between fast-food outlets as they vie to sell time-strapped customers a quick and easy breakfast, although the latest offerings are reallyan extensionof an old concept.McDonalds pushed the breakfast sandwich into the mainstream when it begansellingEggMcMuffinsin 1971 and followed it with a breakfast menu five years later.

The chain remains "best in class" when it comes to tapping into that breakfast market, says DavidHenckes, vice-president of food industry consultancyTechnomic. Breakfast now accounts for 15 to 20 per cent of the chain's revenue, he says.

Other restaurants followed suit in the1980s, but its only in recent years that the breakfast and coffee battle hasreally heated up and attracted a slew of new competitors tothe fray.

In Canada, TimHortonscurrently sits in the top fast-food slot when it comes to breakfast. Analysts suggest its recent purchase by Burger King is part of the hamburger giants attempts to tap into the burgeoning breakfast market south of the border as well as increase its presence here.

Cereal getting a 'bad rap'

Restaurant breakfast sales began a marked increase during the 2008 economic downturn.While Canadians were avoiding spending on priceysit-down dinners, many instead treated themselves to morning fast-food meal, says Carter.

As restaurants have increased their marketing efforts and expanded their offerings in recent years,the number of Canadians eating in the morning has been rising.

Companies also saw an opportunity to boost sales because breakfastused to be the No. 1 meal Canadians skipped. As restaurants have increased their marketing efforts and expanded their offerings in recent years,the number of Canadians eating in the morning has been rising.

All that growth from that skipped meal has come from Canadians eating breakfast out of home," said Carter.

Food historian IanMosbysays the rising demand for morning sandwiches may also be partly the result of a larger cultural change in what's perceived as "evil"in our diets.

Whereas healthy eaters once worried about the perils of fat, they now concern themselves with the ills of sugar. Awareness of the dangers of added sugar has been rising in recent years as medical experts sounded alarms over the high levels of sugar in numerous products, such as cereals,yogurts, juices and baked goods.

At its core, the breakfast sandwich marks the return to the type of morning meals people used to eat decades ago when a plate full of eggs, toast and meat dominated North American tables. Except this time, it's portable.

"Eggs went from being the No. 1 danger with cholesterol and suddenly the scientific consensus has shifted, and eggs are not dangerous and sugar is increasingly becoming the thing that people are worried about," saidMosby.

"Cereal has been getting a bad rap lately in terms of the sugar content," adds JanisThiessen, a historian at University of Winnipeg who teaches a food history course and studies junk food.

She recalls eatingShreddiesas a child. "We would add sugar to it because we thought ofShreddiesas this sugarless cereal," saidThiessen. "As opposed toCap'nCrunch, it was the healthy alternative.

"And then you go read the label as an adult and realize, 'Oh my gosh, there's tons of sugar in this stuff.

Those revelations are part of whats eating into the profits of the worlds biggest cereal maker, Kellogg, and others. The companysearnings fell 16 per cent in the last quarter this year, the fifth consecutive quarterly sales decline. Rival General Mills is also struggling.

But Kellogg CEO John Bryant sees the decline in a different light. "It's more to do with protein seeking as opposed to avoiding items," he said in a recent interview withCNBC.

The longtime cereal maker is rejigging its lineup to offer up more protein-laden cereals and gluten-free options.

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Despite the growing pressure from fast food chains, NPD Group's Carter agrees that do-it-yourself at-home breakfasts are not about to disappear.Single-serving coffee machines,yogurtand smoothies are en vogue all those convenient ready-to-consume meals and drinks, he says.

But convenience is clearly the key.NPDGroup research indicates thatCanadians now typically take five minutes or less to prepare their in-home breakfasts.

Eventoast is declining because youve gotta push the button on the toaster, laughs Carter.

And whether people are eating at home or grabbing a breakfast sandwich en route to the office, the convenience factor appears to be changing Canadians' overall eating habits, according to NPD Group.Breakfast is no longer the No. 1 most-skipped meal - lunch now holds that dubious honour.