Why Taco Bell and Popeyes Want to Serve You Breakfast

Waffle Taco
Taco Bell
Even by Taco Bell's (YUM) wacky standards, its latest product is a head-scratcher: The "Mexican-inspired" fast-food chain is currently in the midst of testing a waffle taco.

The waffle taco -- which is exactly what it sounds like -- is part of Taco Bell's recent test of breakfast offerings, which for now is restricted to locations on the West Coast. But Taco Bell is not the only chain trying to challenge McDonald's (MCD) in the fast-food breakfast game. A number of other quick-serve chains have dipped their toes in the water in recent years: Now Subway, Wendy's and even Popeyes are aiming to be your first stop of the day.

So why are chains best known for tacos and fried chicken trying so hard to serve you breakfast? In short, it's because breakfast represents a mostly untapped growth opportunity.

"It's the last unoccupied territory," says Scott Hume of BurgerBusiness.com, which tracks the fast-food industry. "Its not just breakfast -- it's the same reason you see chains extending hours. You go anywhere that there's potential customer traffic and sales."

That was basically the rationale that Taco Bell CEO Greg Creed gave for the push into breakfast, telling a restaurant industry conference that selling food during more of the day would help drive sales. Taco Bell has already had success moving into new "dayparts" with its late-night "fourthmeal" push; if it can likewise come up with new menu offerings that will allow it to sell food in the morning, it would be crazy not to try.

Sales figures vindicate this strategy. Hume says that while industry sales growth has remained largely stagnant of late, breakfast has been the sole exception; according to the NPD Group, breakfast accounts for 92% of traffic growth in the industry over the last five years.

But just because it's a traffic opportunity doesn't mean that it's easy to pull off -- Wendy's, for instance, has repeatedly failed to make inroads in the breakfast market. Hume says that whether a chain succeeds at breakfast depends a lot on well-positioned drive-through locations and menu offerings that can be consumed on the go -- like breakfast burritos, for instance.

One way or another, we'll see whether any of these newcomers can crack the Egg McMuffin's grip on mornings. Because right now, for the fast-food industry, breakfast is the most important meal of the day.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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And one wonders why the Chinese own more of you each day....

May 20 2013 at 2:15 AM Report abuse rate up rate down Reply
Brian Hope

Sorry, looks too heavy & oily for me. And would TACO BELL have butter & maple syrup to go with it? I doubt it.

May 20 2013 at 1:56 AM Report abuse rate up rate down Reply

With Popeyes making breakfast we get the answer to the age old question: The chicken came before the eggs.

May 20 2013 at 12:11 AM Report abuse rate up rate down Reply

Subway offers the best opportunity for something approaching healthy. Hardees tastes great though not so healthy, but wonderful biscuits. McDonald's, less than it was; the 2fer sandwiches are smaller than the regular ones. Haven't tried Wendy's this time. Burger King, good but pricey. Taco Bell will have to have more than one thing.

May 19 2013 at 10:55 PM Report abuse rate up rate down Reply
Russ Baca

The breakfast taco looks good...but maybe they should make breakfast burritos, too? Eggs, sausage, chunks of potato, cheese, and maybe a splash of salsa...mmmmm!

May 19 2013 at 5:15 PM Report abuse rate up rate down Reply

I want a fresh hot pizza for breakfast.

May 19 2013 at 2:59 PM Report abuse rate up rate down Reply
1 reply to wlb1233's comment

Subway can make one for you

May 19 2013 at 10:49 PM Report abuse rate up rate down Reply

Serve some eggs with a side of american fried potatoes and onions with a spicy green sauce like I've had in Santa Fe for starts. I'll be there....

May 19 2013 at 1:55 PM Report abuse rate up rate down Reply

finally something different in the fast food world

May 19 2013 at 7:07 AM Report abuse rate up rate down Reply

never have ate at Taco Bell, just doesn't appeal to me, not real Mexican food

May 19 2013 at 5:54 AM Report abuse +1 rate up rate down Reply

Huevos rancheros, burritos, breakfast taco with eggs and sausage, soft tacos etc. Why do they pay marketing people and ad agencies?

May 19 2013 at 3:42 AM Report abuse rate up rate down Reply