by Malinda Geisler, content specialist, AgMRC, Iowa State University, malindag@iastate.edu.

Profile updated April 2008.

Overview  

Foodservice offers a growing market segment for pork and pork products. U.S. consumers spend 49 percent of their total food expenditures on food consumed away from home. The United States has more than 935,000 foodservice eating establishments.

According to the USDA, foodservice establishments sold $529 billion worth of meals and snacks in 2006 (excluding alcoholic beverages).

Foodservice establishments are divided into commercial and noncommercial. Commercial foodservice operators, such as restaurants and fast-food outlets, accounted for 83 percent of total foodservice sales. Noncommercial and institutional foodservice outlets, comprised of schools, colleges, hospitals, company cafeterias and correctional facilities, accounted for the remaining 17 percent of foodservice sales.

Government statistics indicate that as incomes rise, U.S. consumers increase their expenditures on more expensive fresh foods, more processed food and more dining away from home. Expenditures on away-from-home food now account for about 49 percent of total U.S. food expenditures. 
 

Foodservice outlets are competing with supermarkets for a larger share of the consumer food dollar. Supermarkets are offering fully prepared meals intended for home consumption.

Foodservice companies are establishing outlets in nontraditional locations such as supermarkets, department stores, convenience stores and airports. There is also a trend for several restaurant chains to operate at the same location.  

Those interested in getting involved in foodservice can do so by contacting the foodservice outlet directly, such as a locally owned restaurant or community school. Other possibilities include contacting a state marketing division, obtaining a "state" grown label and becoming listed in a directory. A wholesale food distributor can also be hired to assist with the distribution of homegrown products to various market outlets.

Profile originally created January 2003 and updated April 2008.

 

Sources
Food CPI, Prices and Expenditures, Briefing Room, Economic Research Service, USDA.

Food Market Structures: Food Service, Briefing Room, Economic Research Service, USDA.
 
Harris, J. Michael, et al., The U.S. Food Marketing System, Economic Research Service, USDA, 2002.
 
Restaurant Industry Facts Forecast, National Restaurant Association.

Stewart, Hayden, et al., The Demand for Food Away from Home: Full-Service or Fast Food?, Economic Research Service, USDA, 2004.