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Taiwan's Breakfast Business

A Mouth-watering Market


In Taiwan, fast food restaurants, convenience stores, and even furniture giant IKEA are inventing new ways to seize on the appeal of breakfast. What’s on the plate for this ever-popular meal?



A Mouth-watering Market

By Alice Lu
From CommonWealth Magazine (vol. 390 )

“The breakfast market is huge. It’s worth NT$100 billion, and it’s a cash market!” exclaims Syu He-sen, general manager of Laya Hamburger, marveling at its massive potential. With 362 new outlets in the past six years, Laya Hamburger is a major mover in the breakfast chain field.

According to statistics from the Association of Chain and Franchise Promotion, Taiwan, the breakfast market, served by 12,000 franchise outlets around the island, is worth NT$100 billion per year, and breakfast shops are among the top three choices for new business start-ups. This big pie has grabbed the attention of all kinds of industries vying for a slice, including even furniture industry giant IKEA.

IKEA entered the breakfast market last year armed with a low-cost strategy aimed at enticing more people to browse furniture. For just NT$39 at IKEA, one can buy an American-style breakfast consisting of toast, fried eggs, jelly, ham, and freshly brewed coffee with unlimited refills. Dawn Thum, range and marketing director for IKEA, describes it as “an unbelievable price.” Open for one and a half hours on weekend mornings, IKEA’s breakfast services draw many families into their stores. The Sinjhuang outlet does a brisk business of around 450 servings per day, and sales around Taiwan have grown by 20 percent over the past year.

Breakfast on the Move

Behind this much-coveted breakfast bonanza lies a major shift in the demographics of Taiwanese society. Statistics from the Ministry of the Interior relate that the average household has shrunken steadily in recent years, dropping to 3.2 members last year. In search of convenience, small families look outside the home for their breakfast needs. “Taiwan is moving toward a society characterized by multiple jobs, more cuisine choices, more meals, and a high ratio of meals taken outside the household,” offers Steven Lee, managing director of McDonald’s Restaurants Taiwan.

In the age of globalization, people are working 24 hours a day. An internal Fast Track survey by McDonald’s found that 99 percent of all Taiwanese eat out for at least one meal per month. This trend is clearest in the breakfast sector, as evidenced at McDonald’s, where breakfast sales have grown the quickest since the chain introduced 24-hour service, climbing at a rate of 25 percent over the last five years. “Moving breakfast service up from 6 a.m. to 4 a.m. has helped attract both early risers and those coming off work from late shifts,” relates Lee. For instance, the McDonald’s next to the vegetable market on Huanjhong East Road in Jhongli now attracts patrons from among the vegetable vendors on their way to work.

Coffee Gains Ground

With take-away breakfasts the most evident trend, what are the most popular morning meal choices?

Before embarking on a busy day of work, get a pick-me-up with a cup of coffee. Convenience stores and McDonald’s have introduced freshly brewed coffee, and Uni-President City Cafe outlets now stand on thousands of neighborhood corners. The FamilyMart convenience store chain sells 40 percent of its coffee during the morning hours. With its strategy of an extended counter that joins a coffee bar to its entree service area, McDonald’s sells 60 percent of its coffee with breakfast. Sheng Fur Wu, vice president of Taiwan FamilyMart, sees the excellent synergy of coffee and meals, signaling perhaps the end of the era of milk tea as the preferred breakfast beverage in favor of coffee.

The busier people are, the more refined their breakfast choices seem to get. At Laya Hamburger, for instance, ingredients for their rice burger are specially selected, consisting of award-winning rice from Siluo Township in Yunlin County and whole wheat buns imported from the USA. When material costs rose last July, the company reacted right away by raising its prices, yet sales rose by 10 percent in August. Mos Burger, which prides itself on meals made to order from healthful ingredients, is also a popular breakfast choice, with breakfast clientele accounting for a full one-third of each day’s sales.

Transforming the Process

Breakfast outlets are becoming more like cafes, forced to adapt or perish, from their counter design to production, technology, and service process. The “Fast Casual” strategy introduced last year by McDonald’s stresses an enjoyable experience, and with it, interior appointments have received a thorough facelift. The company spent NT$2 billion in 2006 to remodel restaurants, and 90 outlets island-wide are now outfitted with McCafes.

In the number-two McDonald’s outlet on Linsen North Road in Taipei, gone are the cold, hard plastic seats of the past. In their place on the ground floor are dark leather sofas and soft lighting, under which people sip their coffee and peruse the morning paper on the table on their way to work. And the action continues straight through to 10:30 when breakfast service concludes.

Apart from obvious changes in decor, other less notable transformations have been made to the service process. The McDonald’s point-of-sales system has boosted ordering speed, enabling the introduction of the “Made For You” production system, which gets orders out within 100 seconds. Two register spaces have been given over to coffee breakfast bars, featuring a selection of coffee, bagels, apple pie, pancakes, and cakes.

The Fast Casual approach has been a rousing success, helping propel McDonald’s breakfast sales to 20 percent growth just last year, accounting for one-fifth of all restaurant business.

IKEA’s cafe attracts breakfast clientele with a spacious and relaxed environment. A distinct departure from the cramped conventional breakfast joint of only around 65 square meters, IKEA’s cafes average 150 square meters. The high proportion of patrons that take their breakfast on the premises, at 80 percent, demonstrates customers’ demand for enjoying a leisurely breakfast.

Breakfast is being not only moved forward to pre-dawn, but also pushed back into brunch. And in some cases breakfast never wears out its welcome, getting served all day. Major hotels now offer brunch options, like the Grand Hyatt’s 1800-NT dollar Sunday brunch, and plans are in the works for establishments like Laya Hamburger and My Warm Day to become all-day operations. Warm House, a Taichung breakfast shop, used to serve patrons until 2:00 PM, but extended its hours to 5:30 in the afternoon in response to customer demand. On a typical day the establishment sells 500 breakfast meals.

With awareness of light eating growing, the typically less burdensome breakfast has gotten a boost from the growing popularity of brunch.

Translated from the Chinese by David Toman

Chinese Version: 賣早餐 卡位千億大市場