Back in 1983, Burger King's Croissan'wich seemed revolutionary.
At the time, much like now, McDonald's (MCD) dominated the fast-food breakfast market with a very simple menu. It had the Egg McMuffin, pancakes, the Big Breakfast (pancakes, eggs, sausage patty, and a hash browns), and not much else.
From its national launch in 1975, the Egg McMuffin stood tall as the clear winner in the morning despite it being built around Canadian bacon, not actual bacon. The sausage and bacon versions didn't even get introduced until the mid-1980s, slightly after Burger King introduced the Croissan'wich.
Burger King at the time offered a true alternative to the McMuffin. Now, the Restaurant Brands International (QSR) chain has a tired breakfast menu that has struggled to find new hits. Sure, it tried the Egg'Normous Buritto, but it has yet to find its next enduring hit.
And Wendy's (WEN) is poised to pass Burger King for second place, behind McDonald's, in the race for breakfast dominance.
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Wendy's Has Made Big Breakfast Progress
When Wendy's launched breakfast, it had a simple premise: It wanted to use fresh ingredients and offer a better take on what McDonald's and Burger King had on their menus. It matched that with a little bit of innovation, using chicken and honey and adding a breakfast Baconator.
And even though Wendy's had the misfortune of launching its breakfast menu right before the Covid pandemic hit, it has steadily gained share. During the company's fourth-quarter earnings call, Chief Executive Todd Penegor credited part of his chain's success to breakfast
"This was driven in part by growth in our breakfast business, which reached 8.5% of U.S. sales at the peak of our very successful Buck Biscuit promotion and global digital acceleration, which grew to approximately 10% of sales by year-end," he said.
That's just the beginning, according to Penegor.
"As we look back at the full year, we have made significant progress growing breakfast sales by approximately 25%," he said.
"We achieved this through several successful trial-driving campaigns, continued increases in customer repeat, two additional months of the daypart, and the support of our $25 million incremental investment in breakfast advertising.
"In 2022, we will add to our playbook to build the breakfast business as we support growth through menu innovation, such as our new craveable Hot Honey Chicken Biscuit alongside compelling trial driving offers to further ingrain the habit."
The CEO expects breakfast to keep growing at a quick pace.
"We believe our breakfast business in the U.S. will accelerate in 2022 by approximately 10% to 20%, taking average weekly U.S. breakfast sales to approximately $3,000 to $3,500 per restaurant by year-end," he added.
Can Wendy's Pass Burger King (and Maybe McDonald's)?
Wendy's hasn't been shy about its goal of eventually passing McDonald's. It targeted the fast-food chain in its ads when it launched breakfast. And it made some pretty bold statements.
"To date, some others in the category have let breakfast consumers down by offering breakfast sandwiches with frozen, folded eggs and precooked bacon. Today, all that changes," Wendy's Chief Marketing Officer Carl Loredo told The Drum.
"We are known for our high-quality food and breakfast is no different. Try any of our craveable items -- we believe this menu will become your favorite."
Now, Wendy's believes it can pass Burger King and eventually get closer to, if not pass, McDonald's.
"For us, right now, we're very solidly and very quickly established as number three, but we're only one point behind Burger King," Wendy's U.S. president Kurt Kane said in an interview with CNBC.
“Our first job is to leave them behind, which we are very confident we can do here in the not too distant future."
