USDA, Economic Research Service (ERS) conducts research on foodservice outlets— facilities that serve meals and snacks for immediate consumption onsite (food away from home (FAFH)). USDA, ERS examines the size of this growing market and its major market segments, including limited-service and full-service outlets.
A Large and Growing Market
Spending at foodservice outlets (FAFH) has outpaced spending at other food retailing outlets (food at home (FAH)) since 2009:
- In 2019, the combined foodservice and food retailing industries sold approximately $1.9 trillion worth of food.
- Foodservice facilities contributed $1.1 trillion of this total, with full-service and limited-service establishments each accounting for about $360 million.
However, in 2020, spending at foodservice outlets had the sharpest decline in history, partly due to the Coronavirus (COVID-19) pandemic, mobility restrictions affecting FAFH establishments, and the subsequent recession.
- In 2020, the combined foodservice and food retailing industries sold approximately $1.8 trillion worth of food.
- Foodservice facilities contributed $931.7 billion, with full-service establishments supplying $272.7 billion and limited-service establishments supplying $350.3 billion.
Spending in the foodservice and food retailing industries has surpassed prepandemic levels since 2021.
- The foodservice and food retailing industries have supplied more than $2.1 trillion worth of food each year since 2021, reaching $2.6 trillion in 2023.
- Foodservice facilities contributed $1.5 trillion in 2023, with full-service establishments supplying $513.3 billion and limited-service establishments supplying $521.0 billion.
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In 2023, the share of FAH expenditures was 41.5 percent, and the FAFH share was 58.5 percent—surpassing the previous record high for the FAFH share in 2019 after declining to 51.2 percent in 2020.
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Food-Away-from-Home Industry by Outlet Type
Commercial foodservice establishments account for the bulk of food-away-from-home (FAFH) spending. This category includes full-service restaurants, limited-service outlets, caterers, some cafeterias, and other places that prepare, serve, and sell food to the general public for a profit. Some establishments 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 noncommercial foodservice establishments, often referred to as "institutional" foodservice facilities.
Full-service and limited-service restaurants—the two largest segments of the commercial foodservice market—accounted for about 68.8 percent of all FAFH spending in 2023. At full-service establishments, customers typically order, are served while seated, and pay after eating. In contrast, limited-service outlets use convenience as a selling point; customers generally order and pay before eating, and meals may be consumed on premises, taken out, or delivered to a specific location. Other FAFH outlets include hotels, schools, and drinking establishments, among others.
- In 2020, food spending decreased at both full-service and limited-service restaurants as well as other FAFH outlets. Full-service restaurants experienced the sharpest decline in spending and FAFH market share.
- In 2023, spending at limited-service restaurants and at full-service restaurants represented 34.7 percent and 34.1 percent of the FAFH market, respectively, while spending at other FAFH establishments represented 31.2 percent of the FAFH market.
As part of their growth strategy, limited-service restaurant companies have built more outlets closer to consumers' homes and workplaces, enhancing convenience for purchasing meals and snacks. Many of these companies have opened outlets in nontraditional locations, such as department stores. Besides convenience, a household's demand for FAFH 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?
Any shift in the market share between limited-service 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, limited-service outlets might introduce comparable foods and services.
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Food-Away-From-Home Demand is Seasonal
Variations in consumer demand for food away from home (FAFH) can be studied in greater detail by observing average daily sales at FAFH outlets. Sales at full- and limited-service outlets follow similar patterns year after year. Sales typically increase the most during the spring and continue to increase more slowly during the summer. FAFH sales typically decline toward the end of the year, but full-service restaurants see a boost in December.
- In 2023, the average daily full-service sales were the lowest in January ($1,282 million) and peaked in December ($1,529 million).
- The average daily limited-service sales were the lowest in January ($1,261 million) but peaked in June ($1,509 million) in 2023.
- In 2023, the average daily sales at all other FAFH outlets were also the lowest in January ($708 million) and the highest in June ($813 million).
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Food Away From Home at the State Level
In 2023, per capita food-away-from-home (FAFH) purchases were higher nationally than any year on record at $3,923. However, per capita FAFH sales were uneven across States.
- In 2023, North Carolina was the median State for per capita FAFH sales at $3,610.
- In 2023, Washington, DC ($10,644), Nevada ($6,907), and Hawaii ($6,679) had the highest per capita FAFH sales in the United States, each more than 30 percent higher than the fourth highest State (California) at $5,133. Possible factors for these outliers include tourism for all three areas as well as interstate-commuting employees in Washington, DC. Tourists and commuters may tend to spend more on FAFH, a relatively more costly form of food purchases, than on food at home (FAH) in the States they are visiting.
- In 2023, West Virginia had the lowest per capita FAFH purchases at $2,597, followed by Iowa ($2,789), Wisconsin ($2,872), Arkansas ($2,896), and Alabama ($2,926).
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Information used in this topic page is drawn from the USDA, Economic Research Service’s Food Expenditure Series data product.