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The global fast food market size was USD 862.05 billion in 2020 and is projected to grow from USD 972.74 billion in 2021 to USD 1,467.04 billion by 2028 at a CAGR of 6.05% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market registered below-average Year On Year growth of -10.46% in 2020 compared to the 2017-2019 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Due to increased demand for convenience foods, on-the-go snacks, ready meals, and cold cuts, this market is steadily expanding. Fast food consumption was influenced by millennials' hectic lives and the global expansion of working populations. This is likely to aid in the global expansion of the fast food business. Over the last few years, consumer expenditure on food consumed out from home has climbed. This is complemented by the global increase in employment rates. Consumption of on-the-go foods has become easier as a result of this.
Lockdowns in Major Markets for Food Service Industry during COVID-19 pandemic to Slow Down Market Growth
The market observed a sudden drop in fast food sales due to nation widewide lockdown restrictions in most countries. With the lockdown imposed in major economies, its effect on the food industry were devastating in the 1st and 2nd quarters of 2020. With full-service restaurants, QSRs and pubs were closed for on-premise services; and many establishments are still struggling to keep their businesses on track. With social distancing being the new normal, consumers visited restaurants only to pick up orders made online. Despite many restaurants allowing pick-up and take-out facilities, the total number of orders was very less compared to the normal orders, in the first half of 2020.
Foot traffic to fast food and casual dining restaurants decreased to almost 50 to 60% since the start of lockdown efforts. But in these times, food delivery services saw a major surge in interest. While online food ordering becoming the popular option, the market is expected to show recovery between the fourth quarter of FY 2021 to the first quarter of FY 2022.
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New Trend of Ordering Different Cuisines Online Adding Stimulus to Market Growth
The benefits of online food delivery were seen by the foodservice industry during the global COVID-19 outbreak in 2020, as it enabled customer access to meals while also allowing food providers to continue functioning during the pandemic. The global spread of e-commerce systems is being driven by factors such as financial growth, more disposable income, increased food consumption, and increased internet penetration. In many developing countries, especially during the COVID era, a surge in online food delivery has revolutionized the way customers interact with food suppliers.
In developed regions, ordering food deliveries had been a common practice even before the pandemic. However, in developing countries like India, the Philippines, Indonesia, South Africa, Qatar, Saudi Arabia, the United Arab Emirates, Singapore, Turkey, Argentina, Brazil, and Chile, the trend gained momentum after COVID-19.
Food delivery services were hailed as the lifeline for most businesses during the peak of the pandemic. Since the start of the pandemic, online food deliveries have been viewed as a critical necessity in the restaurant and food service industries. Consumers are migrating from traditional ordering methods to digital ones as it is simple, error-free, rapid, and entirely transparent. The fast food sector is predicted to gain from and offer various development opportunities for new entrants as a result of the advent of this trend throughout the forecast period.
Furthermore, the robust franchise business model allows large-scale global company operators to grow their influence into new markets, such as Asia Pacific and South America, by combining international demand for online meal ordering with globalisation potential. By producing a larger consumer base, this expansion will assist raise industry income.
Changing Consumer Behavior and Higher Spending on Food to Augment Growth
The key factors driving consumers to eat out more are rising family income and the development of households with two or more members in most regions. In addition, the rapid expansion of variety food service outlets is gaining appeal in developed and developing markets around the world, although well-known brands such as Domino's, Pizza Hut, McDonald's, KFC, and Burger King remain popular.
With fast food gaining rapid popularity among younger individuals, international fast food chains are eyeing overseas markets. Growing foreign investment, increase in household incomes, expanding millennial population base, growing tourism, and shifting consumption habits of consumers are also benefiting the growth of the industry.
Growing Number of Quick Service Restaurants in Developing as well as Developed Countries
Conveniene is a key factor driving this industry as it enables delivery of food quickly in a short time, which mainly appeals to millennial consumers. Inclination of consumers towards ready-to-eat meals and fast food products has changed the global market dynamics. Fast food requires less time and effort, which is a major factor in the increasing demand for these products. The growing disposable income of consumers is another factor that will facilitate the market to flourish in the coming years.
According to USDA, over the last decade, the number of quick-service restaurants in the U.S. grew by nearly 20%, from roughly 285,000 establishments in 2000 to over 340,000 in 2015. Many urban counties, especially in the Mid-Atlantic, the Southeast, and rapidly urbanizing counties in the Western states, experienced growth in quick-service restaurants during 2000-15 that exceeded 30 percent, significantly higher than the 20 percent national average. One of the major drivers of quick-service restaurant growth in urban countries was the emergence of the fast-casual restaurant category. This trend is expected to prevail during the forecast period and drive the fast food market growth during the forecast period.
Increasing Awareness Among Consumers Related to the Health Issues Related to Fast Food Consumption
Although ready to eat snacks is a popular category in food consumed away from home, these foods contain high amount of calories and have lower levels of minerals, fiber, and water as compared to natural foods. Higher levels of income, rapid urbanization trend, home deliveries, aggressive eye-catching advertisements, and international cuisines contribute to a rising trend in increased junk food consumption.
The growing consumption of fast food among young adults is of concern which leads to high fat intake, which may result in obesity and consequently obesity-related chronic diseases. Obesity is linked to several long-term health conditions, premature death, and illness including cancer, diabetes, gall bladder disease, fatty liver, heart disease, arthritis, and joint disorders. Fast food consumption habit has been found as a potential risk factor for obesity among children. With many such health concerns related to fast food consumption, awareness about this is expected to act as restrain to the growth of this industry.
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Burger & Sandwich Segment Holds the Major Market Share due to Presence of Burger Chains in Almost Every Country
Based on product type, the segment includes burger & sandwich, pizza & pasta, Asian & Latin American food, and others. The burger & sandwich restaurants segment dominates the market owing to the popularity of burgers and sandwiches among all the age groups. Also, burgers & sandwiches are cheaper costs compared to pizza & pasta. McDonald’s is one of the most popular chains in the fast food category. It has the presence of company-operated restaurants, franchised restaurants, and licensed affiliates in 119 countries in the world. Superior competitive advantage of burger & sandwich chains is their unique breakfast menu. These offerings provide a convenient option for consumers traveling on their way to work in the morning. In 2020, McDonald’s operated over 39,000 restaurants. Apart from McDonald’s, another major market player in this segment is Burge King. Burger King has a presence mainly in the U.S. market and focuses on hamburgers, chicken, and specialty menu items at affordable prices. With the availability of these two popular fast food chains in many countries, this segment is expected to dominate the fast food market share during the forecast period.
The Asian & Latin American food segment holds the second largest market share of the global market. The majority of the population of the world resides in the Asia Pacific region. The majority of the countries in the Asia Pacific region such as India, China, Thailand, Indonesia, Malaysia, Australia, and South Korea are in the developing stage. Consumers in this region are experiencing increased disposable income and hence they are spending more on food. This factor is expected to drive the growth of the Asian & Latin American food segment during the forecast period.
On-Premise Food Service Market to Witness Rapid Growth with Rise in Quick-Service Restaurants
The service type segment includes door-to-door and delivery/collection services. Examples of commercial catering are QSR, coffee shops, fast food outlets, food chains, food carts, online ordering. As household disposable income increases, consumers spend more on hotels, restaurants, and cafes. With the tendency of young generation to choose quickservice restaurants such as Domino`s, KFC, Pizza Hut, Burger King, Starbucks, Subway, Taco Bell, McDonald`s, and others, these food chains are eyeing new markets across Tier 2 and Tier 3 cities.
North America Fast Food Market Size, 2020 (USD Billion)
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North America dominated the global market in 2020 with a revenue share of USD 337.8 billion. The dominance of this region can be accredited to the increase in dual-working households, rising household income levels, and rapid expansion of fast food chains. U.S. is the largest market for the snack food industry, due to consumers' eating out most days of the week. Meanwhile, Mexico is predicted to record the highest CAGR during 2021-2028 due to changing lifestyles, large number of younger individuals, and an expanding tourism sector.
Europe will experience steady growth in this market, due to the growing number of tourists. Growth will be also supported by changing consumer preferences and increased consumer spending on fast foods. Ready-to-make breakfast products are also surging in popularity due to busier lifestyles. Europe is one of the most attractive markets in the world, where there is high growth potential for baked food products and potato products.
Asia Pacific will record fast growth in the market led by rapid use of digital platforms for food delivery. Expansion of fast food chains in developing regions and increasing availability of products through online retail is facilitating growth across Japan, India, and China. Growing urbanization will strengthen the regional outlook.
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South America, Middle East and Africa (MEA) is expected to grow at a medium CAGR, due to less progress in the fast food and beverage packaging sectors. This makes food products less appealing and less convenient. Due to the increasing consumer demand for convenience food, the market size is expected to show promising potential during the forecast period.
Wendy's Partnered With Rebel Foods to Open 250 Cloud Kitchens In India
Quick-service restaurant chain the Wendy’s Company partnered with cloud kitchen business Rebel Foods in India, which runs Faasos, Behrouz Biryani, and Mandarin Oak to launch 250 cloud kitchens across India. As part of the expansion plan, Rebel Foods will partner with Sierra Nevada Restaurants, which holds the Indian master franchisee for Wendy's, to develop and operate Wendy’s cloud kitchens in the country. Wendy’s strategic partnership with the Indian group is one of the largest such deals for the company across global markets.
An Infographic Representation of Fast Food Market
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The market research report provides a detailed industry analysis and focuses on key aspects such as leading companies, product types, and leading service types of the product. Besides this, the report offers insights into the fast food market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD Billion)
By Product Type
By Service Type
Fortune Business Insights says that the market was valued at USD 862.05 billion in 2020 and is projected to reach USD 1,467.04 billion by 2028.
In 2020, the North American market value stood at USD 337.8 billion.
Growing at a CAGR of 6.05%, the market will exhibit steady growth in the forecast period (2021-2028).
The burger & sandwich segment is expected to be the leading type segment in this market during the forecast period.
The growing number of quick-service restaurants in developing as well as developed countries is the key market driver.
McDonalds, Dominos, and Burger King are the major players in the market.
North America dominated the market share in 2020.
The increasing popularity of online food ordering is expected to drive the adoption of fast food items globally.
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