Market Segments

ERS 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

The foodservice industry is nearly equal in size to food retailing:

  • The food marketing system, including food service and food retailing, supplied about $1.46 trillion worth of food in 2014.
  • Of this total, $731 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.

Expenditures for food at home and away from home

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Schools and nursing homes are types of non-commercial foodservice establishments. Such establishments are often called "institutional" foodservice facilities.

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Full-service and fast food restaurants—the two largest segments of the commercial foodservice market—account for about 79 percent of all food-away-from-home sales. 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. According to the National Restaurant Association, restaurants are the Nation’s second-largest private-sector employer, providing jobs for one in 10 Americans.

As part of their growth strategy, fast food companies have built more outlets closer to consumers' homes and work places to make it more convenient for consumers to purchase meals and snacks. Many 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?
Away-from-home market, by outlet type

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Any shift in 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 that offer a wider range of menu selections and dining amenities. In response, fast food restaurants might introduce comparable foods and services.

Last updated: Monday, July 24, 2017

For more information contact: Howard Elitzak

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