• by Karlene Lukovitz  @KLmarketdaily, May 9, 2011

IHOP has become the first national restaurant chain to launch a frozen breakfast line, IHOP at Home.

Noting that nearly 84% of breakfast meals originate at home, and that restaurants are still being pinched by consumer cutbacks on eating out, IHOP said it hopes to appeal to "the busy consumer who wants convenient, quality, IHOP-inspired products at home."

The initial items, which launch in 3,000 Walmart stores this week, include three choices of Omelet Crispers (scrambled eggs, potatoes and a choice of cheddar cheese, cheddar cheese and sausage or cheddar cheese and bacon in a crispy coating); four varieties of French Toast Stuffed Pastries, and a Griddle N' Sausage Wrap. All can be microwaved or prepared in a traditional oven.

None of the products is available in IHOP restaurants. IHOP confirmed that the line will be expanded to more retail outlets in coming months and that new items will be added, but will not say whether its signature buttermilk pancakes will be offered at some point.

The licensee is Plover, Wis.-based Golden County Foods. Golden makes potato, vegetable and other foods for retail, foodservice and private label for some of the largest food companies in North America and Europe, according to its site.

"In our research on consumer needs in breakfast, we found that consumers had low satisfaction with current retail offerings, which created an opportunity for IHOP to enter the market and offer great-tasting, convenience-oriented breakfast products," says Gus Valen, CEO of The Valen Group, the licensing/growth-strategy agency that developed the retail market-entry strategy for IHOP and created the licensing partnership with Golden County Foods. "The products were developed with the needs of the consumer in mind. They deliver the flavors that consumers love at IHOP, but in a more convenient heat-and-eat solution. They are innovative to the market and will drive new users to the category."

"I take my hat off to IHOP for being bold," observes Bill Cross, VP, restaurant and food brand licensing for Broad Street Licensing Group, a competitive licensing agency. "This is a natural extension -- the IHOP name has the strongest resonance with consumers -- and with Walmart carrying it, it looks particularly promising."

He adds, however, that consumers might find it something of a disconnect that none of the items are ones carried in IHOP restaurants. "Generally, a restaurant brand starts with core menu items to make a strong connection with consumers" -- especially since covering licensing fees require that licensed products be sold at a premium, he notes.

This could be IHOP's way of trying to avoid a conundrum, speculates Cross. "When menu items are licensed, restaurant chains are on the one hand concerned that licensed retail lines won't taste as good as the items in the restaurants, and on the other hand concerned that they will taste as good -- and take business away from franchisees."