Food Service Market

Food Service Market Size

The global Food Service Market size was valued at USD 5,461.17 billion in 2022 and is projected to reach a valuation of USD 6,791.31 billion by 2030, growing at a CAGR of 2.82% from 2023 to 2030. The global market has experienced significant growth owing to the rise in disposable income among consumers.

Furthermore, hectic working lifestyles have majorly favored the trend of consuming ready-to-eat food products through various means, such as dine-out at restaurants, takeaway services, and online food deliveries. Millennials and Gen Z are among the largest consumer bases in the food service market. At the corporate level, companies have started outsourcing catering services for the meals of their employees, which is ultimately supporting the growth of the market.

Analyst's Review

In 2022, the market witnessed significant developments, marked by the emergence of new business paradigms, strategic collaborations, expanded global reach, and dynamic business opportunities for future growth. The global market holds immense significance in a country’s GDP and is estimated to grow further throughout the forecast period.

Market Definition

The food service market plays a vital role as the last integral part of the food supply chain that is readily available to consumers at various outlets. Key players in the global market include restaurants, fast food outlets, pubs, bars, and caterers providing food and beverages to consumers. These businesses offer a wide range of services to their customers, including full-service, self-service, takeout, and online deliveries. The industry implies meals or snacks that are cooked outside of residential areas and can be consumed indoors or outside of residences. Caterers commonly provide meals to corporate, commercial, schools, hospitals, and other such places. On the other hand, restaurants, bars, and pubs majorly focus on food and beverage services within their establishments.

Market Dynamics

The food service market share is expected to grow significantly during the forecast period due to the high penetration of cultural cuisines offered by market participants. The migration of people towards cities due to the global phenomenon of urbanization is observed to be a significant growth factor that is paving the way for the penetration and expansion of food service businesses. The expansion of food service applicability in hospitals, large corporate organizations, and support and care establishments has increased the demand for food institutions. The presence of such food institutions has increased the supply of food services on a global scale.

The development of food hygiene regulatory standards is anticipated to support further market growth. The standards are regularly regulated by governing authorities to improve the quality of food served globally. Regularization of food standards, especially in developing countries, is a prominent factor that is anticipated to support the global food service market growth.

The development of food trends such as health-conscious dietary food, and the introduction of vegan food products are among the several key factors driving the global market. The growing market for vegan food products not only generates a balanced demand for different food options but also fosters market expansion by driving up demand for other food items.

The development and deployment of online platforms to provide doorstep food deliveries are observed to create exponential opportunities for the global market. In recent years, online platforms for pre-ordering food products, home delivery, and other services have gained traction. These platforms offer convenience and a diverse range of food options for consumers. However, their impact on market players has been quite positive, leading to increased global revenue. For instance, megabrands such as McDonald's have deployed their online platform for pre-ordering via drive-through outlets and also started doorstep delivery of their food products.

The food service market is directly consumer-oriented, which implies that changes in consumer preferences could hamper market growth. The outbreak of food contamination at large scales and related instances impacts businesses operating in affected regions or areas. It also depends on the disposable income of consumers in the area. The outbreak of diseases or contagious bacteria and viruses significantly affects the overall food supply chain.

Fraudulent practices such as contamination of food products by not adhering to regulations, and malpractices in the food supply chain are some of the key factors that impede the market growth. For instance, in December 2022, the Bureau of Customs (BOC) Philippines reported the seizure of frozen food containers that were shipped to Manila. The smuggled food was estimated to be worth over USD 1.1 million. Such malpractices, in turn, would create supply disruptions in the affected region or country.

Segmentation Analysis

The global market is segmented based on service type, system type, and geography.

By Service Type

Based on service type, the market is segmented into commercial and non-commercial services. The commercial segment, which generated over 76% of all segmental revenue, dominated the food service market in 2022. In recent years, there has been an uptrend in consumer preferences. It has been observed that consumers have started spending more on food services. The dominance of the commercial segment can be attributed to several factors such as the rise in income levels, which in turn increases disposable incomes, social trends, changing lifestyles, and the growing availability of healthy food products. The commercial segment is expected to lead the market throughout the forecast period.

By System Type

Based on system type, the market is segmented into conventional, ready-prepared, centralized, and assembly serve systems. The conventional segment dominated the global food service market in 2022, accounting for a significant revenue share of 43%. The conventional segment comprises food production and storage of cold or hot food until served, distributed, or delivered to consumers. Demand for conventional food has significantly increased owing to consumer preferences, and this trend is estimated to persist with high demand throughout the forecast period.

Food Service Market Regional Analysis

Based on regional analysis, the global market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.

Asia Pacific dominated the regional share in 2022, accounting for over 44% of total revenue. Rapid urbanization, increasing population, and changing lifestyles are among the key factors driving regional market growth. China is observed to major contributor to the revenue of the food service market, mainly due to the presence of a well-established industry and high consumer demand in the region.

High competition in the Asia Pacific has resulted in the availability of multi-cuisine services to attract and retain consumers. Offering a diverse range of food products such as healthy or organic foods, and economical restaurants, is projected to further augment the market growth in the region. However, changing nature of the food supply business may impact the market growth. For instance, the emergence of online food delivery is expected to have a significant impact on commercial food service providers in the region.

Competitive Landscape

The global food service industry study report will provide valuable insight with an emphasis on the fragmented nature of the global market. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their respective market shares across different regions. Expansion & investments involve a range of strategic initiatives including investments in R&D activities, new manufacturing facilities, and supply chain optimization.

List of Key Companies in Food Service Market

• Amoy Food Limited
• Aramark Corporation
• Compass Group PLC
• Darden Concepts, Inc.
• Domino’s IP Holder LLC
• Mitchells & Butlers
• McDonald’s
• Starbucks Coffee Company
• Wendy’s Company (Quality Is Our Recipe, LLC)

Key Industry Developments

• August 2022 (Acquisition)– Clif Bar & Company, a large manufacturer of nutritious energy and snack bars, was acquired by MondelÄ“z International, Inc. The motive for the acquisition was to expand the business line across the region.
• December 2022 (Acquisition) – An agreement was signed by Wells Enterprises and Ferrero Group for the acquisition of Wells Enterprises by Ferrero Group. Wells Enterprises is a large-scale ice cream brand expert. Ferrero Group aims for strategic expansion with this acquisition.

The Global Food Service Market is segmented as:

By Service Type

• Commercial
• Non-commercial

By System Type

• Conventional
• Ready Prepared
• Centralized
• Assembly Serve