USDA, Economic Research Service research on foodservice outlets— 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 $1.89 trillion worth of food in 2019.
- Of this total, $1.06 trillion was supplied by foodservice facilities.
However, in 2020 the foodservice industry had the sharpest decline in history (13.0 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 $1.81 trillion worth of food.
- Of this total, $922.2 billion was supplied by foodservice facilities.
In 2021, the foodservice industry surpassed pre-pandemic levels.
- In 2021, the foodservice and food retailing industries supplied about $2.12 trillion worth of food.
- Of this total, $1.17 trillion 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 2021, the share of food-at-home expenditures was 45 percent, and food away from home was 55 percent—going back to pre-pandemic levels after accounting for 50.9 percent in 2020.
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Restaurants are the Nation’s second-largest private-sector employer, providing jobs for 1 in 10 workers in the U.S, according to the National Restaurant Association. Full-service and fast-food restaurants—the two largest segments of the commercial foodservice market—accounted for about 70.5 percent of all food-away-from-home sales in 2021. Full-service establishments have wait staff, and likely other amenities such as ceramic dishware, nondisposable utensils, and alcohol service. In contrast, fast-food outlets 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 outlets were better able to adapt to COVID-19 restrictions during 2020. Full-service restaurants experienced the sharpest decline (24.5 percent) compared to fast-food outlets (3.3 percent) and all other food establishments (11 percent) in 2020. In 2021, full-service restaurants experienced the largest increase (51.1 percent) compared to fast-food outlets (19.2 percent) and all other foodservice establishments (13.2 percent).
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 establishments. For example, if trends favor full-service restaurants, the market could shift to more full-service restaurants offering a wider range of menu selections and dining amenities. In response, fast-food outlets might introduce comparable foods and services.