Errata: On July 16, 2021, the text describing declines in food-away-from-home sales by type of establishment in 2020 was revised with correct percentages. No data tables or charts were affected.
ERS research on foodservice outlets—or facilities that serve meals and snacks for immediate consumption on site (food away from home)—examines the size of this growing market and the major market segments such as fast food and full-service outlets.
A Large and Growing Market
Until 2019, the foodservice industry was larger than food retailing:
- The foodservice and food retailing industries supplied about $1.79 trillion worth of food in 2019.
- Of this total, $978.2 billion was supplied by foodservice facilities.
However, in 2020 the foodservice industry had the sharpest decline in history (16.9 percent) partly as a result of the COVID-19 pandemic, mobility restrictions affecting food-away-from-home establishments, and the subsequent recession.
- In 2020, the foodservice and food retailing industries supplied about $1.69 trillion worth of food.
- Of this total, $813.4 billion was supplied by foodservice facilities.
Commercial foodservice establishments accounted for the bulk of food-away-from-home expenditures. This category includes full-service restaurants, fast food outlets, caterers, some cafeterias, and other places that prepare, serve, and sell food to the general public for a profit. Some are located within facilities that are not primarily engaged in dispensing meals and snacks, such as lodging places, recreational facilities, and retail stores. Schools and nursing homes are types of non-commercial foodservice establishments, and such establishments are often called "institutional" foodservice facilities.
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In 2020, the share of food-at-home expenditures was 51.9 percent, and food away from home was 48.1 percent, the first year it has accounted for less than half of food spending since 2008, during the Great Recession.
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According to the National Restaurant Association, restaurants are the Nation’s second-largest private-sector employer, providing jobs for 1 in 10 workers in the U.S. Full-service and fast food restaurants—the two largest segments of the commercial foodservice market—account for about 73.7 percent of all food-away-from-home sales in 2020. Full-service establishments have wait staff, and, perhaps, other amenities such as ceramic dishware, nondisposable utensils, and alcohol service. In contrast, fast food restaurants use convenience as a selling point; they have no wait staff, menus tend to be limited, and dining amenities are relatively sparse. Given their limited physical interactions with customers, fast food restaurants were better able to adapt to COVID-19 restrictions during 2020. Full-service establishments experienced the sharpest decline (29.4 percent) compared to fast food establishments (3.6 percent) and all other food establishments (17.9 percent) in 2020 .
As part of their growth strategy, fast food companies built more outlets closer to consumers' homes and work places to make it more convenient for consumers to purchase meals and snacks. Many fast food restaurant companies opened outlets in nontraditional locations such as department stores. In addition to convenience, a household's demand for food-away-from-home is affected by its income and demographic characteristics, as seen in the link below:The Demand for Food Away from Home: Full-Service or Fast Food?
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Any shift in the market share between fast food and full-service restaurants could influence the mix of foods and services offered by both types of restaurants. For example, if trends favor full-service restaurants, the market could shift to include more full-service restaurants offering a wider range of menu selections and dining amenities. In response, fast food restaurants might introduce comparable foods and services. It is not yet clear if the food-away-from-home market will experience long-lasting market shifts between fast food and full-service restaurants as a result of the COVID-19 pandemic.