Market Size (2022)
Fastest Growing Segment
United States Food Service market is expected to be driven in the anticipated period due to several factors, such as the increase in purchasing power, rising digitalization, and diversification of multiple cuisines due to increasing immigration across the country.
The term "food service" refers to any business or organization that provides food services to individuals who are not physically present in their homes. This includes all types of establishments, such as restaurants and carryout services, cafeterias, and university dining halls. Hotels and inns are also part of the food service industry, as are rehabilitation and retirement centers.
The food service market in the United States is one of the largest and most dynamic industries in the country and is a major contributor to the nation's economic growth. The food service market consists of a broad variety of establishments that offer food service to the public, such as restaurants, cafeterias, fast-food establishments, catering services, food delivery services, pubs, bars, and institutional food services providers, such as those providing meals to schools, medical facilities, and other large-scale settings. The food service market is a major contributor to the US economy, employing millions of people in a variety of occupations, including cooks and servers, kitchen personnel, managers, and administrators.
United States Food Service Market Scope
The food service market in the United States is huge and has consistently ranked as one of the largest sectors in terms of revenue generation. The food service market significantly increased its production in 2021 and 2022, compared to the previous years, as the industry recovered from the aftereffects of COVID-19. According to a United States Department of Agriculture study, the total volume of food supplied in 2021 and 2022 amounted to approximately USD 2.11 trillion and USD 2.39 trillion, respectively. Of this total, food service establishments contributed USD 1.16 trillion in 2021 and USD 1.34 trillion in 2022. Full-service establishments provided USD 496 billion in 2021 and USD 468 billion in 2022. The food service market is influenced by changing consumer preferences and trends. In recent years, there has been a growing demand for healthier options, ethically sourced and sustainable foods, and increased interest in international cuisines.
United States Food Service Market Overview
The food service market in the United States includes a diverse array of businesses, from small independent eateries to large restaurant chains and catering companies. In 2022, the market's revenue was humongous.
The food service market caters to different consumer demands and preferences. It can be broadly categorized into several segments, including quick service restaurants (QSR), dining service (hotels and restaurants), pubs, bars, café, lounges (PBCL), and others, such as cafeterias and cloud kitchens.
The United States accounted for the largest share of the global food service market in 2022 and is expected to maintain its position over the next few years, based on GDP growth and food consumption trends in the country. Immigration has played a significant role in the expansion of the US food service sector, as the country’s cuisine has become increasingly integrated into the fusion of cuisines. The extensive variety of dishes available in American eateries is likely to further expand the US food service market over the next few years.
United States Food Service Market Drivers
Economic conditions play a significant role in the food service market in the United States. During periods of economic growth and prosperity, consumers tend to have higher disposable incomes, leading to increased spending on dining out and other food service offerings. In 2022, the average disposable income of an individual has reached USD 55,781 in the United States. Thus, with increasing disposable income consumers tend to spend more on food services available in the market. Conversely, during economic downturns, consumers may cut back on discretionary spending, which can affect restaurant sales.
Additionally, consumer preferences and tastes are consciously evolving. As consumers become more health-conscious, there is a growing demand for healthier menu options, organic and locally sourced ingredients, and transparency in food sourcing and preparation. The obesity rate among adults in the United States reached 40 percent in 2020. Thus, the rise of dietary trends, such as plant-based diets and gluten-free options, also influences the food service market.
United States Food Service Market Trends
The United States food service market is experiencing several trends that are shaping the industry. The adoption of technology was accelerating in the food service market. Restaurants and food service establishments were increasingly embracing digital solutions, such as online ordering platforms, mobile apps, and contactless payment options. May restaurants have introduced new technology, such as tablets on tabletop to automate the food ordering process. This trend was driven by the desire to enhance customer convenience and improve operational efficiency. The demand for delivery and takeout services was rising steadily, even before the COVID-19 pandemic. However, the pandemic further accelerated this trend as consumers sought safer dining options. Restaurants were partnering with third-party delivery services or establishing their in-house delivery capabilities to meet the growing demand.
The concept of virtual kitchens, which are delivery-only food service establishments without dine-in options, has been gaining popularity in the United States. These kitchens allowed restaurants to expand their reach without the need for a traditional brick-and-mortar location, focusing solely on delivery orders. Personalization has become a significant trend in the food service industry. Restaurants are offering customizable menus and options, allowing customers to tailor their meals according to their preferences.
United States Food Service Market Challenges
The prevalence of home-cooked meals is a major obstacle to the growth of the market. Some individuals prefer to eat in their own homes rather than going out to restaurants. This is due to the perception that eating out can be unhealthy due to the high amount of carbohydrates, sodium, and artificial additives. This increases the likelihood of developing lifestyle-related diseases, such as obesity, diabetes, and heart disease. Furthermore, taking out or ordering from a restaurant can be more expensive than home-cooked meals. Furthermore, home-cooked meals are more nutrient dense due to the use of fresh and perishable ingredients, as well as clean, uncontaminated ones. This trend is expected to impede the expansion of the market as consumers, especially younger generations, and the baby boomer generation, become increasingly health conscious. Consequently, the trend towards home-cooked meals will pose a threat to the food service market in the United States over the forecast period.
- In 2022, Subway introduced a comprehensive new menu, the most extensive overhaul in the company's almost six-decade-long history. The objective of the new menu is to simplify the menu options available to customers. Subway will present a new menu at its approximately 21,000 locations across the United States, which consists of twelve sandwiches in what is referred to as the "Subway Series" menu.
- In 2022, Yum! Brands' main subsidiaries, Taco Bell and KFC, have recently launched new menus, which feature a variety of plant-based options as well as traditional favorites. Pizza Hut has expanded its plant-based options to more than 15 countries, and in 2022, Taco Bell sold 23% of its vegetarian menu items. Overall, the company offers more than 30 vegetarian ingredients that can be combined into one million combinations.
United States Food Service Market Opportunities
The United States food service market offers a variety of growth and innovation opportunities. Despite the challenges, there are several ways for restaurants and food service establishments to take advantage of evolving consumer needs and market trends. Utilizing social media and digital marketing platforms can help restaurants, cafes, hotels, and other eateries. to establish a robust online presence, interact with customers, and addition of new customers. Thus, influencer partnerships and online marketing campaigns can boost the visibility and presence of restaurants.
Furthermore, offering diverse international cuisines and fusion dishes can appeal to customers seeking unique and exotic flavors. Expanding menu options to include a variety of culinary influences can attract a broader audience. With the help of marketing and social media and the diversification of international cuisine, the United States food service market will grow at a fast rate during the forecast period.