Getting up at 3:30 am to leaven dough and cook porridge and then serving breakfast from 6 am to 9:30 am - this is the daily routine of morning shift employees at Oriental Yangyang Catering Management Ltd.
The steamed dumplings and wontons served at Yangyang's 16 branches are cooked fresh in the early morning, so the good taste attracts many consumers every day, a manager surnamed Song at the company based in Daxing district, Beijing told the Global Times.
With each customer spending an average of 7 yuan, each branch receives up to 1,000 consumers from surrounding communities every day. The number exceeds their capacity, so queuing is a common scene, Song said.
"The daily sales at each branch of Yangyang are 5,000 to 7,000 yuan ($1,099), but we can only just avoid losing money on serving breakfast," Song noted. It was harder last year, he said, when the company was making a loss.
Restaurants serving breakfast generally operate on a relatively small scale, and have low earnings per transaction and limited business hours, which results in low profits or even losses, Feng Enyuan, secretary-general of the Beijing-based China Cuisine Association, told the Global Times.
Mentioning Hongbinlou Restaurant in Beijing as an example, Feng said that it needs 10 employees to work for over four hours to serve breakfast, and the daily revenue is just 2,000 to 3,000 yuan. Deducting the costs for raw materials, labor as well as water and electricity, it can earn a meager profit of just 200 to 300 yuan each day.
Despite the small profits, the demand is huge and more big companies have joined the market recently, partly because of government encouragement.
More participants
Pizza Hut began to serve breakfast in June. Seven set meals priced between 15 and 25 yuan are available at 32 branches in six cities - Beijing, Shanghai, Hangzhou, Shenzhen, Tianjin and Dalian.
KFC began to offer breakfast back in 2002 and McDonald's joined the market in 2004. Their breakfasts, with localized food such as porridge and fried dough sticks and prices as low as 6 yuan, have drawn in many Chinese people.
Chinese fast food chain Yonghe King Restaurant offers breakfast to around 100,000 consumers at nearly 300 restaurants in 37 cities nationwide. It has been operating since 1995, and targets office staff, students and the elderly, the firm's Deputy Marketing Director Sheng Xinyi told the Global Times.
Offering breakfast for as low as 5 yuan for each set meal, the profits are low, due to intense market competition and rising costs, Yang said.
"We still provide good quality products and offer affordable prices in order to attract more consumers," she said, noting that breakfasts account for around 30 percent of Yonghe's total revenue.
Guo Xiaodong, general manager of Meizhou Dongpo Restaurant, was quoted as saying by Beijing Business Today newspaper that the profit from serving breakfast is less than half of that for dinners.
However, breakfast helps enterprises to improve their popularity by offering food to more consumers, Guo said. Also, serving breakfast at restaurants can lower the pressure of rental costs and draw in more consumers for lunch and supper, he noted.
Even though it's hard to control their costs, these companies have grabbed a lot of consumers who used to rely on sidewalk snack booths.
"I prefer eating at fast food chains, because they offer various options at reasonable prices," Yang Ling, an IT worker in Beijing, told the Global Times. Their food is also safer, Yang believes.
It costs 5 yuan for a breakfast at Yonghe King and 6 yuan in McDonald's, and the breakfast prices at sidewalk snack booths have also increased to about 5 yuan, Yang noted.
Despite meager profits, the fast food chains can get very significant gains with their large number of branches, said Feng.
For the larger fast food chains, especially McDonald's and KFC, it is easier to earn profits by selling breakfast, because they have highly standardized products, scaled production and strong brand influence, Feng noted.
Government support
A report by the China Cuisine Association in 2010 showed that China's breakfast market for people dining out amounted to 187.6 billion yuan in 2009, a 12 percent increase from 2008.
The report, the latest of its type available, forecast the market would grow at an annual rate of 14 percent in 2010 and 2011, so that it would be worth 243.8 billion yuan in 2011.
Meanwhile, the slowing economy has resulted in a drop in people's purchasing power and reduced willingness to consume. And rising costs have further squeezed the profits of the catering industry, prompting many restaurants to extend their service hours to boost their revenue, said Feng.
But the sector has been given encouragement by government support policies. The Breakfast Project, launched by the Ministry of Commerce in 2008, aimed to enhance breakfast quality.
The project has seen participation by 54 cities with over 18,000 standardized restaurants offering breakfast to 9 million people daily, said Qiu Hong, assistant minister of commerce, at a meeting on the project held on June 10.
Shanghai invested 40 million yuan this year for its breakfast project and Zhengzhou, the capital of Central China's Henan Province, is offering up to 200,000 yuan to each of the 20 model breakfast providers.
Beijing Municipal Commission of Commerce released a list of 944 selected model restaurants serving breakfast in May and announced in late July that it would start to clear out the city's many privately operated food trolleys.
With these policies, small-scale breakfast sellers were excluded and chain enterprises make up 85 percent of the 944 model restaurants, with 121 McDonald's branches, 205 KFC branches and 97 Qing-Feng Steamed Dumpling shops.
Being selected as part of the program means companies can get government subsidies. For example, Haidian district offers a 40,000 yuan subsidy for each restaurant on the list.
The list also indicates recognition from the government, which is an honor for the restaurants, including Yangyang, Song said.