Foodservice business booming again, USDA says

After faltering during the 2020 COVID-19 pandemic, spending in the foodservice sector is booming again.

In 2023, the share of food at home (grocery) expenditures was 41.5%, and the food away from home share (restaurants and other foodservice) share was 58.5% — beating the previous record high for the restaurant/foodservice share in 2019 after declining to 51.2% in 2020, according to a new USDA report.

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, the report said.

The USDA said spending at restaurant/foodservice outlets has outpaced spending at grocery/retail outlets since 2009.

However, in 2020, spending at foodservice outlets had the sharpest decline in history, partly due to the COVID-19 pandemic, mobility restrictions affecting food-away-from-home establishments, and the subsequent recession, according to the report. In 2020, the combined foodservice and food retailing industries sold approximately $1.8 trillion worth of food, of which foodservice sales accounted just over half.



Stronger now

Foodservice facilities contributed $1.5 trillion in 2023, with full-service establishments supplying $513.3 billion and limited-service establishments supplying $521 billion, the report said.

Full-service and limited-service restaurants — the two largest segments of the commercial foodservice market — accounted for about 68.8% of all foodservice 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 foodservice outlets include hotels, schools, and drinking establishments, among others, the report said.

In 2023, spending at limited-service restaurants and at full-service restaurants represented 34.7% and 34.1% of the foodservice market, respectively, while spending at other foodservice establishments represented 31.2% of the total foodservice 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, according to the report. 



Seasonal and regional trends

Sales at full- and limited-service outlets follow similar patterns year after year, typically increasing the most during the spring and rising more slowly during the summer. Foodservice sales typically decline toward the end of the year, but full-service restaurants see a boost in December, the report said.

In 2023, the average daily full-service sales were the lowest in January ($1.28 billion) and peaked in December ($1.52 billion). The average daily limited-service sales were the lowest in January ($1.26 billion) but peaked in June ($1.5 billion) in 2023.

In 2023, per capita foodservice/restaurant purchases were higher nationally than any year on record at $3,923. However, per capita foodservice sales were uneven across states, according to the report. In 2023, North Carolina was the median state for per capita foodservice sales at $3,610.

In 2023, Washington, D.C., ($10,644), Nevada ($6,907) and Hawaii ($6,679) had the highest per capita foodservice sales in the U.S., each more than 30% 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, D.C., the report said.

In 2023, West Virginia had the lowest per capita foodservice purchases at $2,597, followed by Iowa ($2,789), Wisconsin ($2,872), Arkansas ($2,896) and Alabama ($2,926), the report said.