McDonald's serves convenience for breakfast

By Devesh Gupta , afaqs!, New Delhi | In Advertising | March 25, 2014
In a market dominated by home-cooked items, packaged food and local eateries, McDonald's Breakfast Menu claims it offers convenience with quick-served, wholesome food. A look at the challenge faced by the brand.

Breakfast is the most important meal of the day and nutritionists across the globe have been reiterating its importance time and again. According to a report by Dr. Malathi Sivaramkrishnan, research director at College of Home Science, Nirmala Niketan, Mumbai, only 25 per cent of people skip breakfast in metros in India, compared to the US, where nearly 50 per cent of the population does the same.

National Breakfast Day

Ranjit Paliath

McDonald's TVC

Interestingly, though, 80-85 per cent of those consuming breakfast in India take home-cooked food such as vegetables, cereals, paranthas, poha, idli and others, depending on the regional cuisine of the state. Packaged foods, cereals, oats and cornflakes also form a part of this. Also, there is a significant segment of people who eat their breakfast outside home, a market largely catered to by local players in the unorganised sector.

According to a McDonald's report, nearly 18 per cent of the breakfast-consuming people in India eat outside home. The market for OOH breakfast in the West is far more organised, with many players as compared to India.

McDonald's entered India in 1990. Viewing breakfast as a serious opportunity in India, it launched the breakfast category in the country in 2010. However, the brand admits that the consumer first needs to be educated on the need for a wholesome breakfast.

Ranjit Paliath, VP, business operations, McDonald's India (west and south), says, "Globally breakfast has done really well for us. People in India are beginning to eat breakfast outside home due to increasing urbanisation, growing young population, nuclear families and increasing disposable incomes. Actually, people have less time to make and eat breakfast and also there is very little opportunity for them to eat out. So we thought of filling that need and we say that we can offer wholesome ingredients and food at McDonald's."

In 2013, McDonald's celebrated its first National Breakfast Day and distributed nearly 5 million free McMuffins to its customers across 34 countries to spread awareness on the importance of breakfast. The annual property was celebrated again on March 24, 2014.

The brand recently launched a television commercial to promote its breakfast offering in India. The film shows a little girl at one of its outlets, asking for breakfast for the entire family. She explains that the family has given the mother respite from cooking breakfast for a day. Created by Leo Burnett, the film aims to spread awareness and generate recall for the brand when it comes to breakfasts. Apart from heavy promotion on the digital platform, the film is also being aired on all major national television channels.

According to the previous years' reports, breakfast accounted for only 4 per cent of McDonald's store sales in India, while it accounted for 20 per cent in Japan, USA and Hong Kong.

According to the brand, the average cost of having breakfast at McDonald's in India is Rs 100-120. It is mostly consumed by people in the age group of 25-35 years, belonging to SEC A and B. Delving further into the statistics, it suggests that of the people who eat outside, 65 per cent are adults; 27 per cent are teens; and 8 per cent are seniors. The report also mentions that during weekends, families also make a lot of target audience for the QSR chain.

Paliath reveals that working adults in the age group of 25-35 years comprise the main target audience for the breakfast offering. Since outlets near major transit areas have historically done well, the brand is initially targeting major metros and is looking at areas where it has a strong store base.

"We will be coming up with a lot of drive-through restaurants, where there will be good take away and it will be convenient for people to get in and out," adds Paliath.

It is important to note that in the West, a large number of people take the subways. Takeaways form a large portion of the sales at these outlets, and the number of drive-through restaurants adds to the numbers in this category.

Speaking on the unique appeal of the brand, Paliath says that McDonald's offers convenience food. "With convenience we mean that it should be easy to eat wherever you are - in a train or bus. People should be able to carry it, use and take it away in their bags and purses. And precisely for this reason we offer grilled products."

Currently, the brand offers sausages, McMuffin, hot cakes, coffee and McEggs on its breakfast menu in restaurants in Delhi, Mumbai, Gujarat, Bengaluru, Hyderabad and Pune. It also delivers breakfast at home.

In the South and West regions, McDonald's already serves breakfast in more than 150 stores. In 2013, McDonald's sold nearly 10 million units of breakfast foods (pan-India). The store coverage in the North and East regions for breakfasts is also increasing fast.

Along with National Breakfast Day, the QSR chain has also done a lot of digital activity through Facebook, Twitter and other media to promote its breakfast category.

Some of the other players that offer breakfasts are Subway, Dunkin' Donuts, Domino's and others.

N D Badrinath

Full plate?

Will the campaign succeed in changing the behavioural pattern and preferences of consumers used to more traditional forms of breakfast? N D Badrinath, founding member, Aqumena, says, "The QSR chain will have to come up with some kind of innovative delivery mechanism to ensure that people do not have to go out to eat. Going out for food could upset their morning schedule."

Also, Indians have adhered to a strong traditional taste for their breakfast. "McDonald's will have to do something innovative with its menu, to reach out to a larger audience in this category. Each region has its specific tastes, so the brand needs innovative products," Badrinath adds.

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