Food Service Market Size 2024-2028 

The food service market size is estimated to increase by USD 1.07 billion at a CAGR of 5.66% between 2023 and 2028. The market is witnessing significant growth driven by various factors. With an increasing demand for food away from home and the rapid expansion of the fast food market, the industry is experiencing a surge in mobile foodservice options. Moreover, the trend towards increased snacking and indulgence consumption is fueling demand for convenient food options like ready-to-eat food. Strategic alliances among key players are also contributing to market growth. However, challenges such as labor shortages and stringent government regulations pose obstacles to the industry's expansion. Furthermore, with increasing internet penetration and online ordering systems, small businesses and restaurant industries are embracing digitization. The changing lifestyle of consumers, driven by rising incomes, high aspiration levels, and a young population, is influencing the demand for convenient food options. 

Market Overview

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Market Dynamics and Customer Landscape

The market encompasses a wide range of facilities, including childcare centers, restaurants, hotels, and cafés. Third-party services play a significant role in the preparation, serving, and cleanup processes of these establishments. Strategic partnerships between restaurant operators and hotel chains have expanded the reach of foodservice offerings, with online delivery options becoming increasingly popular. The delivery services like Deliveroo have disrupted traditional full-service restaurants and quick service restaurants by providing convenience and flexibility to consumers. Institutes also contribute to the market through their service type offerings, such as catering and vending services. The distribution of these products is a crucial aspect of the industry, ensuring the freshness and quality of ingredients for various establishments.

Key Market Driver

The increasing demand for food away from home is a major driver boosting the market growth. The consumption of Food Away from Home (FAFH) has been on the rise due to several factors. Increased household income enables consumers to spend more on leisure activities, such as dining out. Women's employment outside the home also contributes to FAFH consumption, as they often have meals outside their homes during the week.

Additionally, the presence of affordable and convenient fast-food outlets, such as those offering burgers, pizza, and chicken, attract consumers. Fine dining establishments and casual dining restaurants cater to various preferences, with some offering limited menus for quicker service. Overall, FAFH has become a common choice for breakfast, lunch, and dinner options. Hence, such factors are driving the market during the forecast period.

Significant Market Trends

The increased snacking and indulgence consumption is one of the major market trends growth. The consumption of Foodservice industry offerings, particularly savory snacks and light meals, has seen a notable rise in the United States over the last decade. Busy lifestyles have led to an increase in the number of consumers opting for on-the-go eating, often skipping traditional meals.

Furthermore, breakfast choices have evolved, with bakery items like doughnuts, bread, rolls, and pies gaining popularity. Vendors such as Compass provide healthier alternatives, like doughnut sandwiches made with nutritious ingredients. The trend extends to lunch and dinner, with fine dining establishments and casual dining restaurants offering a mix of limited menus and popular items, such as burgers and pizza, alongside chicken dishes with green vegetables as primary components. Hence, such factors are driving the market during the forecast period.

Major Market Challenges

The labor shortages in the food service sector are a major challenge hindering the growth of the industry. The market, encompassing breakfast, lunch, and dinner options in fine dining establishments and casual dining restaurants, is experiencing labor shortages.

Furthermore, Jobs in this sector, including those at burger, pizza, and chicken outlets, are often low-paying and lack career advancement opportunities. Consequently, the number of applicants for these positions is decreasing. Factors contributing to this trend include job insecurity and limited access to benefits such as sick leave and health insurance. This labor shortage is particularly prevalent in countries like the US and Japan. Hence, such factors are hindering the market during the forecast period.

Market  Segmentation

The market encompasses various establishments, including restaurants, retailers, and providers, that prepare and serve food to consumers. With increasing Internet penetration, online ordering systems have become popular, particularly among small businesses and the restaurant industry. Digitization has transformed the sector, enabling fast-food consumption for working women and catering to vegan diets as part of the food trend. Franchising and border closures have impacted the market, with a shift towards dine-in and specialty beverages like proprietary coffee blends. Out-of-home food consumption is on the rise due to changing consumer lifestyles, foreign investment, and rising incomes. Tier 2 cities and multi-brand outlets have emerged in the F&B landscape, along with lifestyle areas and food courts in shopping malls. The market includes fast food, full meal menus, and specialty beverages, with a focus on quality, punctuality of delivery, and reducing plastic packaging. The hospitality market and tourist spending continue to influence the sector. Foreign exporters play a significant role in the HRI sector, offering a diverse range of options.

By Service

The conventional segment is estimated to witness significant growth during the forecast period. The conventional system is a traditional system that is used by most vendors. In a typical service system ingredients are assembled, prepared, and delivered to each other's premises. The use of the conventional system ensures customers that the food is freshly prepared and customized to their liking. Depending on the nature of the food, it is maintained in a heated or chilled state and served to customers. 

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The conventional segment was the largest segment and was valued at USD 1.07 billion in 2018. The conventional service system is driven by the high quality of food as the preparation is done on the premises.  The demand for traditional food systems further increases as consumers prefer fresh foodstuffs at restaurants, schools, and canteens. Therefore, all such factors are expected to drive the growth of the conventional segment in the global market during the forecast period.

By Region

APAC is estimated to contribute 50% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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In 2022, APAC dominated the global market and is projected to surpass overall market growth from 2024 to 2028, maintaining its leading position. Changing consumer lifestyles in APAC, driven by increased employment and income levels, are boosting the demand for convenient options. Urbanization is intensifying reliance on fast food due to time constraints, while the evolving eating habits of working women further contribute to the region's market growth.

The APAC region led global consumption in 2022. With increasing internet penetration and online ordering systems, small businesses and restaurant industries are embracing digitization. The changing lifestyle of consumers, driven by rising incomes, high aspiration levels, and a young population, is influencing the demand for convenient options. Urbanization and the rise of working women have boosted fast-food consumption. Franchising and border closures have impacted the industry, with a shift towards dine-in and takeaway. Veganism as a trend is gaining popularity, leading to the growth of vegan fast food in shopping malls and lifestyle areas. Specialty beverages, proprietary coffee blends, and out-of-home food consumption are also on the rise. The hospitality market, including the HRI sector, benefits from tourist spending, with a focus on quality and punctuality of delivery. Plastic packaging remains a concern, with a growing emphasis on sustainable options. The food retail market in Saudi Arabia reflects these trends, with increasing demand for diverse dining experiences and sustainable packaging solutions.

Market Customer Landscape

The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Segment Overview

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• Service Outlook 
  • Conventional
  • Centralized
  • Ready-prepared
  • Assembly-serve
• Sector Outlook 
  • Commercial
  • Non-commercial
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Argentina
    • Chile
    • Brazil

Market Analyst Overview

The marketing refers to the promotion and sale of food and beverages to businesses and organizations, rather than directly to consumers. This market is a significant segment of the food industry, with various players offering a range of products and services. The providers cater to different sectors, including educational institutions, healthcare facilities, corporate offices, and hospitality industries. They offer various solutions, such as meal planning, menu development, food delivery, and equipment supply. The market is driven by several factors, including increasing demand for convenience food, growing awareness of healthy eating, and technological advancements in production and delivery. In the market, a strategic partnership with third party delivery services like McDelivery expand the reach of full-service restaurant and quick service restaurant beyond traditional facility, providing storage and delivery solutions even to non-traditional venues like child care center.

Additionally, the market is influenced by demographic trends, such as an aging population and changing consumer preferences. The providers employ various marketing strategies to reach their target audience. These strategies include digital marketing, social media advertising, and partnerships with industry associations and influencers. They also focus on delivering high-quality products and services to build customer loyalty and differentiate themselves from competitors. In conclusion, the marketing landscape is dynamic and competitive, with players constantly innovating to meet the evolving needs of their customers. The market is expected to grow in the coming years, driven by factors such as changing consumer preferences and technological advancements.

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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2024 and 2028
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Market growth and trends across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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