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The global food service market size was USD 2,395.03 billion in 2022 and is projected to grow from USD 2,646.99 billion in 2023 to USD 5,423.59 billion by 2030, exhibiting a CAGR of 10.79% during the forecast period.
A food service establishment refers to any business that prepares and distributes food outside for on-premise consumption or takeaway delivery. Components of the food service industry include retailers, counter and table servers, and providers. The global market is growing because fast food consumption is steadily increasing worldwide due to rising disposable incomes, the number of working women, and the convenience of fast food. Apart from these factors, the expansion of varied-format of fast food restaurants is also gaining popularity across major and emerging markets worldwide, while franchising such as Domino's, McDonald's, and KFC remains one of the most popular growth models.
With the majority of the millennial population leaning towards fast food consumption, their spending on quick-service restaurants is increasing. The robust franchise business model allows many global organizations to grow their influence in new markets, such as the Asia Pacific and South America, by combining international demand for online meal ordering with globalization potential. For instance, in August 2021, SOHO Coffee Co. expanded digital channels to diversify sales. The U.K.-based coffee and food-to-go chain are expanding its other offering to meet new consumers and diversify sales.
Sudden Disruptions in Global Supply Chain Affected Market Growth Amid the Pandemic
The COVID-19 pandemic significantly impacted the global economy and several industries due to restrictions imposed in the middle of 2020, when the peak of virus spread was observed. Government regulation and restrictions such as lockdowns and border closures have hit multiple industries. Additionally, supply chains were disrupted as borders closed and restricted travel. Production unit closures, supply chain disruptions, and economic slowdowns are a major impact on the food service industry. During the pandemic, heavy restrictions were imposed on dine-in hence, hotels and restaurants were closed.
Moreover, many consumers were reluctant to dine out in a confined food service setting due to the possibility of getting affected by COVID-19. Hence, the expenditure and visits to restaurants fell dramatically during the pandemic. The lockdown and border closures further led to a fall in the international and domestic markets' number of travelers and visitors. The fall in the number of travelers and visitors further led to the impact on tourism, which is a major contributor to the food service industry. Hence, the impact on travel and tourism led to an impact on the market.
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Rise of Veganism to Transform Market Outlook in the Coming Years
The vegan diet has grown in popularity over the past few years. Health is the primary concern for choosing a vegan diet. The veganism food trend is also visible in the fast food sector as customers demand vegan alternatives for burgers, sandwiches, and bread. Moreover, market players compete to acquire customers that demand vegan food to fulfill consumer needs. For instance, in February 2021, Yum! Brands, Inc. and Beyond Meat Inc. entered into a strategic partnership to sell their plant-based chicken products in the U.S. Products such as Beyond Fried Chicken were made available to consumers across Taco Bell KFC, and Pizza Hut restaurants for a limited time.
Other prominent market players, such as KFC and McDonald's, rolled out their vegan burgers in the U.K. Burger King took a step to go vegan while unveiling vegan chicken nuggets in the U.K. market. With such popular market players taking the initiative to launch vegan fast food, the market offers prominent opportunities for market growth during the forecast period.
Increasing Number of Food Courts and Food Malls is Driving Market Growth
The trend of shopping and food malls has expanded rapidly in developed and developing countries. The trend of shopping malls, which was concentrated only in metro cities, is now spread to tier 2 and tier 3 cities. Consumers regularly prefer shopping for multi-brand outlets under one single roof. The consumer needs to have everything under one roof and the industry is also making use of this consumer behavior by opening specialized multi-branded food courts/malls/halls under one roof. New shopping center developments and extensions increasingly focus on designing F&B and lifestyle areas, including stand-alone food stalls and kiosks.
Moreover, incorporating technology in food and beverage plays a vital role in the market. Starbucks and Dunkin' Donuts have greatly expanded the role and reach of traditional coffee shops by introducing mainstream audiences to specialty beverages and proprietary coffee blends. For instance, Starbucks initially, as a part of its marketing strategy, wrote the wrong spellings of the customer's name so that they post about it on social media and attract more customers. This news created a storm in social media, so many consumers went to Starbucks to experience it. The companies are continuously improving productivity, identifying substantial areas for research and development, and launching new products into the market, which, in turn, will further drive the market growth over the upcoming period.
Increased Spending On Out-of-Home Food Consumption to Drive the Market Growth
Changing consumer lifestyles and growing incomes in developing countries are the main factors for consumers to devour more food and beverage away from home. Moreover, with the rise in the number of working women in employment, families frequently visit restaurants or order coffee and snacks from outside. This factor increases the café outlet's foot traffic, increasing restaurant revenue and contributing positively to market growth. Considering the popularity of fast food among the young population, many international quick-service and hotel brands are expanding their presence in foreign markets. Foreign investment, rising incomes, high aspiration levels, an increasingly young population, increasing tourism, and changing consumer consumption patterns also benefit the growth of the industry. Opportunities for foreign food exporters to supply into the HRI sector are improving as demand for many regional ethnic foods is also increasing. These factors are emerging as major factors boosting the market’s growth.
Apart from increasing spending by domestic consumers, tourist spending on hotels and restaurants contributes to the growth of the hospitality market in various regions. Due to the booming tourism industry in recent years, hotels and restaurants have introduced various new types of cuisine to the local market to attract tourists from certain countries. This factor can attract tourists and domestic consumers who want to try new international cuisine styles. Therefore, increased spending on restaurants is likely to boost the growth of this market.
High Preference for Online Food Delivery May Hinder the Market Growth
Online food ordering is increasing in the food service industry, which most consumer groups have adopted. But some of the negative aspects of online food ordering keep customers away from it. Along with the many benefits of food delivery, some problems come with it. For example, one of the problems with food delivery is that the quality of the food delivered is often lower than the quality of the meal in a restaurant. Food very often has to be transported over long distances, and valuable vitamins can be lost over time. In addition, food from delivery services is often packaged in plastic packaging, which usually won't be too appealing compared to the food neatly placed on plates in a restaurant.
Another drawback of meal delivery services is that they are often not punctual. Also, food can get cold after delivery due to long delivery routes. For this reason, some require reheating. This is especially true when ordering food during rush hour. Streets tend to be very busy, and delivery people are often stuck in traffic. These factors impact and challenge the growth of the market.
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Full-Service Restaurants Dominate the Market Share Due to the Availability of Different Varieties on the Food Menu
The type segment is divided into full-service restaurants, quick-service, institutes, and others. Full-service restaurants include establishments that serve customers with table service in brick-and-mortar and have a full meal menu. They offer menus in multiple selection types, including breakfast, lunch, and dinner. Full-service restaurants with eclectic, high-quality interiors, and high service standards extend their menu, include extensive beverage offerings, and opt for more sophisticated decor and ambiance to attract customers to their restaurants. Moreover, the staff is usually highly trained, and there is often a dress code for patrons to acquire more customers towards their restaurants. Fine dining establishments and casual dining restaurants are the major contributors to this segment. The quick service restaurants are also expected to grow in the market. But it has a limited menu and specializes in selective main entrees such as burgers, pizza, or chicken.
Asia Pacific Food Service Market Size, 2022(USD Billion)
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Geographically, the market is studied across North America, Europe, Asia Pacific, South America, and the Middle East & Africa.
Asia Pacific region held the major market share in 2021 due to the new innovation and investment by key players. Consumers in countries such as Australia, Japan, and South Korea prefer to dine in full-service restaurants. Hence, the market share for such restaurants is comparatively higher than other types. The quick service restaurants exhibit the fastest growth in the market as these restaurants have higher speed and quick service time. Additionally, the providers are thus working on devising innovative ways to help consumers experience unique food items. This includes 3-D customization of menus and developing complex-themed restaurants using 3D technology. Unique food halls where a wide range of food options are served to consumers have also undergone rapid transformation in recent years.
North America region is expected to experience a consistent growth rate during the forecast period. Food service companies' operating costs are increasing rapidly in countries such as the U.S. and Canada. The rise in labor wages and the price of raw materials is putting significant pressure on the companies profit margins. Hence, there is a significant drive towards digitization and automation in production and service areas. Digitalization helps restaurants to provide fast services that attract customers to their services. For instance, in 2021, Domino's partnered with Nuro, one of the leading self-driving delivery companies and launched an autonomous pizza delivery system in Houston. Customers can place prepaid orders, and Nuro R2 Robots deliver these products to the consumers. Thus this innovation helped to enhance Domino's productivity and increase its sales. Moreover, the other players also took the opportunity and invested in the North American region, which helped to increase the region's growth in the upcoming times.
Europe is one of the significant global regions and the hospitality industry is huge in the region. The growth of the European industry is supported by the rising trend of eating out and a busier lifestyle, increasing the demand for prepared food items. Germany is the largest country in the European foodservice market in convenience, regional production, health and wellness, and Asian and ethnic cuisines. The high spending capacity of consumers in Germany further boosts the market’s growth.
The South American region is one of the fastest-growing regions in the food service industry in the world. The evolution in fast-food chains, hotels, and restaurants that serve a wide variety of food items with strong dine-out culture and the availability of cheap food options are some of the major factors contributing to the region's growth. Among the different service types in the region, full-service restaurants account for the largest market share, followed by quick-service restaurants.
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The Middle East & Africa region has experienced good economic growth in recent years. The Middle East region is home to a unique and profitable restaurant industry that is predicted to grow strongly, with the higher standards of living coupled with an ever-increasing number of tourists. Moreover, the hospitality and tourist industry in South Africa is fiercely competitive and one of the fastest-growing sectors of the economy, with a diverse range of accommodations and a mix of business and leisure travelers. According to Statistics South Africa, the food Service sector in South Africa produced revenues of USD 3 billion in 2020, down 32% from 2019. Government limitations enforced beginning in March 2020 in an effort to manage the COVID-19 pandemic have had a significant impact on the South African hotel and restaurant industry. This region creates a high demand for suitable dining options. Africa's food service industry is growing mainly due to a growing middle class and an increasing population.
Expanding Businesses to Strength Market Presence is the Major Development Strategy
The players focus on product development, innovations, and advanced technological adoption. Manufacturers are launching different products to cater to the growing demand. Yum! Brands, Inc. is a major global player in food categories, including KFC, Pizza Hut and Taco Bell. Yum!Brand, opened 54,000 restaurants which are operating in around 155 countries worldwide. Brands such as KFC and Pizza Hut have a long and rich history of developing a wide assortment of pizza and chicken items and have successfully expanded their presence in other countries. To attract more consumers, Starbucks has established 33,833 stores which are spread across 80 countries worldwide. The brand is popular in the market due to its unique ambience and consumer experience. Chipotle Mexican Grill, Inc. is a fast-casual restaurant that offers Mexican food items such as burritos, bowls, tacos, quesadillas, and salads. It has established around 2,000 stores globally. The expansions through partnerships and new product development are expected to offer beneficial opportunities for the market’s growth during the forecast period.
An Infographic Representation of Food Service Market
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The food service market report provides detailed market analysis and focuses on key aspects such as leading companies, market segments, overview, regional analysis, and types. Besides this, the report offers insights into the food service market key trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors contributing to the market's growth in recent years.
CAGR of 10.79% from 2023 to 2030
Value (USD Billion)
North America (By Type, Service Type, and Country)
Europe (By Type, Product, Material, and Country)
Asia Pacific (By Type, Product, Material, and Country)
South America (By Type, Product, Material, and Country)
Middle East and Africa (By Type, Product, Material, and Country)
Fortune Business Insights says that the global market size was USD 2,646.99 billion in 2023 and is anticipated to reach USD 5,423.59 billion by 2030.
In 2022, the global market value stood at USD 2,395.03 billion.
Ascending at a CAGR of 10.79%, the global market will exhibit steady growth over the forecast period (2023-2030).
By type, the full-service restaurant segment is expected to dominate the market throughout the forecast period (2023-2030).
Increasing the number of food courts and malls is driving food service market growth (2023-2030).
McDonalds Corporation (U.S.), Dominos Pizza, Inc. (U.S.), and Darden Restaurants, Inc. (U.S.) are the leading companies worldwide.
Asia Pacific dominated the global market in 2021.
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