Description

“The pandemic brought unprecedented challenges to the foodservice market and the industry will never be the same. Nimble and innovative operators quickly pivoted to serving consumers at home and many of the offerings created out of necessity will become future revenue sources. LSRs were largely able to weather a turbulent 2020 but many FSRs struggled to stay afloat. While consumers are returning to restaurants, rising COVID cases from the Delta variant may undo the industry’s progress if consumers feel it is unsafe to dine out.”
– Caleb Bryant, Associate Director of Food and Drink Reports

Key issues covered in this Report

  • The impact of COVID-19 on consumer behavior and the foodservice market
  • Consumer hesitancies around dining out
  • Consumer interest in new foodservice offerings created during the pandemic
  • Opportunities for restaurants to connect with consumers at home

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definition
          • COVID-19: market context
            • Economic and other assumptions
              • COVID-19: US context
              • Executive Summary

                  • Top takeaways
                    • Market overview
                      • Figure 1: Total US revenues and forecast of full-service restaurants and limited-service eating places*, at current prices, 2015-25
                    • Impact of COVID-19 on the foodservice industry
                      • Figure 2: Short, medium and long term impact of COVID-19 on foodservice industry, 2021
                    • Opportunities and challenges
                      • Delta variant threatens to draw out the industry’s recovery
                        • Figure 3: Coronavirus life disruption concern, any worried, 2021
                        • Figure 4: Activity comfort level, any comfortable, 2021
                      • Higher operational costs strain the foodservice industry
                        • Figure 5: Foodservice attitudes, any agree, by food and drink shopper segmentation, 2021
                      • Workers leave the foodservice industry
                        • Figure 6: Employee quit rates, accommodation and food services, seasonally adjusted, 2021
                      • Retain offerings created during the pandemic
                        • Figure 7: Foodservice attitudes, any agree, by anticipated work situation, 2021
                    • The Market – Key Takeaways

                      • Foodservice industry’s recovery depends on the state of the pandemic
                        • FSRs face a fragile future
                          • Consumers gain additional spending power…
                            • …but menu prices will increase
                            • COVID-19 Pandemic Overview

                                • Figure 8: Daily trends in number of COVID-19 cases in the United States reported to CDC, 2020-21
                              • January-March 2020: discovery and first wave
                                • April-July 2020: uneven lockdown and uneven impact as cases climb
                                  • August 2020-January 2021: new leadership, a new variant and first vaccinations
                                    • February 2021-June 2021: double masking and the road to reopening
                                      • July 2021 onward: Delta ushers in a fourth wave
                                      • The Economic Impact

                                        • A record drop and bounce back in economic activity
                                          • Employment plummets – Recovers to 2016 levels
                                            • Consumer spending and confidence are catching up
                                              • Federal Reserve promises to keep interest rates “near zero”
                                                • Inflation concerns grow as economic growth accelerates
                                                • Impact of COVID-19 on Household Finances and Spending Priorities

                                                  • Financial wellbeing is improving, despite only half of Americans thinking their financial situations are healthy
                                                    • Figure 9: Financial health, by household income, 2021
                                                  • Stimulus relief has been a lifeline for many
                                                    • Figure 10: Financial situation, by household income, 2021
                                                  • Essential goods remain priorities…
                                                    • Figure 11: Coronavirus spending habits, 2021
                                                  • …but discretionary categories show signs of rebirth
                                                    • Figure 12: Coronavirus spending habits – Higher priority, 2020-21
                                                  • Saving remains a focus, but consumers ready to make exceptions
                                                    • Figure 13: Spending behaviors– Past three months and future plans, 2021
                                                    • Figure 14: Spending behaviors – Past three months, 2020-21
                                                • Foodservice Market Size and Forecast

                                                  • Foodservice falls driven by steep decline in FSR traffic
                                                    • Figure 15: Total US revenues and forecast of full-service restaurants and limited-service eating places*, at current prices, 2015-25
                                                    • Figure 16: Total US revenues and forecast of full-service restaurants and limited-service eating places*, at current prices, 2015-25
                                                • Segment Performance

                                                  • LSRs weathered the storm thanks to a focus on takeout and value
                                                    • Figure 17: Total US revenues and forecast of limited-service eating places*, at current prices, 2015-25
                                                    • Figure 18: Total US revenues and forecast of limited-service eating places*, at current prices, 2015-25
                                                  • FSRs struggled to survive and face a long uncertain recovery
                                                    • Figure 19: Total US revenues and forecast of full-service restaurants, at current prices, 2015-25
                                                    • Figure 20: Total US revenues and forecast of full-service restaurants, at current prices, 2015-25
                                                • Scenario Forecast

                                                    • Fundamental differences in how COVID-19 is affecting consumer markets
                                                      • State of the foodservice industry depends on the state of the pandemic
                                                        • Figure 21: COVID-19 scenario forecasts for the foodservice market, 2015-25
                                                      • COVID-19 market disruption: risks and outcomes
                                                        • Figure 22: Summary of Mintel scenario expectations and the impact on the foodservice market, 2021
                                                    • Market Factors

                                                      • Rising cost of food will drive up menu prices
                                                          • Figure 23: Sales of food at home and away from home, 2010-21
                                                        • Consumers head out on vacation after a stressful year
                                                          • Remote work is here to stay
                                                            • Figure 24: Anticipated work situation for remainder of 2021
                                                        • Companies and Brands – Key Takeaways

                                                          • Foodservice winners include concepts designed to satisfy at-home meals
                                                            • Foodservice losers include dine-in and breakfast concepts
                                                              • Create restaurant experiences consumers can enjoy at home
                                                              • Category Winners and Losers

                                                                • Winner: QSRs and pizza restaurants
                                                                  • Winner: ghost kitchens
                                                                    • Winner: restaurant curated at home experiences
                                                                      • Loser: mom and pop independent FSRs
                                                                        • Loser: foodservice breakfast
                                                                          • Loser: foodservice as a profession
                                                                            • Figure 25: Employee quit rates, accommodation and food services, seasonally adjusted, 2021
                                                                          • Loser: c-store foodservice
                                                                              • Figure 26: Total US sales and fan chart forecast of convenience store foodservice sales, at current prices, 2015-25
                                                                          • Market Opportunities

                                                                            • Alcohol delivery and takeaway is here to stay
                                                                              • Figure 27: Foodservice alcohol orders for delivery/takeaway, order frequency, 2021
                                                                              • Figure 28: Interest in alcoholic drinks ordered for delivery/takeout, 2021
                                                                            • Restaurant design will change with the times
                                                                              • Take restaurants to retail
                                                                                • Figure 29: Pandemic-driven cooking, eating and shopping behaviors, 2020
                                                                              • Balance value with “got-to-try-it” menu items
                                                                                • Figure 30: Dining out and value attitudes, by HHI, 2020
                                                                                • Figure 31: Definition of value when dining out, any rank, by HHI, 2020
                                                                            • The Consumer – Key Takeaways

                                                                              • Delta variant brings back hesitancies around dining out
                                                                                • Takeout/delivery was necessary and remains relevant
                                                                                  • Consumers are eager to return to restaurants as long as they feel safe
                                                                                    • The lines between at home and away from home are forever blurred
                                                                                    • Overall Consumer Mindset

                                                                                      • Fear rises following Delta’s emergence
                                                                                          • Figure 32: Share of adults worried about coronavirus exposure, 2020-21
                                                                                        • Lifestyle concerns follow suit
                                                                                            • Figure 33: Share of adults worried about coronavirus impact on lifestyle, 2020-21
                                                                                          • The pandemic experience inspired reflection
                                                                                            • Family first
                                                                                              • New view of health and wellness
                                                                                                  • Figure 34: Post COVID-19 priority changes, 2021
                                                                                                • Foodservice, travel and fitness industries most at risk of Delta-related disruptions
                                                                                                    • Figure 35: Activity comfort level, any comfortable, 2021
                                                                                                • Foodservice Ordering Methods

                                                                                                  • Takeout and delivery keep restaurants afloat
                                                                                                    • Figure 36: Restaurant ordering method, 2021
                                                                                                  • Delivery companies will need to expand past their Millennial base
                                                                                                    • Figure 37: Restaurant ordering method, by generation, 2021
                                                                                                • Reasons for Not Dining Out

                                                                                                  • Foodservice industry’s recovery entirely depends on the pandemic
                                                                                                    • Figure 38: Reasons for not dining out, 2021
                                                                                                  • Restaurants should reinstate safety procedures
                                                                                                    • Figure 39: Reasons for not dining out, by age, 2021
                                                                                                  • Connect with home chefs
                                                                                                    • Figure 40: Reasons for not dining out, by food and drink shopper segmentation, 2021
                                                                                                  • Remote workers are less likely to venture out to restaurants
                                                                                                    • Figure 41: Reasons for not dining out, by anticipated work situation, 2021
                                                                                                • Dining Out Attitudes during the COVID-19 Pandemic

                                                                                                  • Dining out provides a sense of normalcy
                                                                                                    • Figure 42: Dining out attitudes during the COVID-19 pandemic, 2021
                                                                                                  • Make dining out a special shared experience for families
                                                                                                    • Figure 43: Dining out attitudes during the COVID-19 pandemic, by parental status, 2021
                                                                                                  • A focus on takeaway will remain relevant as long as COVID persists
                                                                                                    • Figure 44: Dining out attitudes during the COVID-19 pandemic, by foodservice order method, 2021
                                                                                                • Interest in COVID-19 Safety Procedures

                                                                                                  • Rise of Delta necessitates the reinstatement of safety procedures
                                                                                                    • Figure 45: Interest in COVID-19 safety procedures, 2021
                                                                                                    • Figure 46: Interest in COVID-19 safety procedures, by age, 2021
                                                                                                • Foodservice Attitudes

                                                                                                  • Retain offerings created during the pandemic
                                                                                                    • Figure 47: Foodservice attitudes, 2021
                                                                                                  • Millennials are eager to enjoy restaurant experiences at home
                                                                                                    • Figure 48: Foodservice attitudes, any agree, by generation, 2021
                                                                                                  • Restaurants will struggle with rising costs
                                                                                                    • Figure 49: Foodservice attitudes, any agree, by food and drink shopper segmentation, 2021
                                                                                                  • Create home meal options for WFH consumers
                                                                                                    • Figure 50: Foodservice attitudes, any agree, by anticipated work situation, 2021
                                                                                                • Appendix – Data Sources and Abbreviations

                                                                                                  • Data sources
                                                                                                    • Sales data
                                                                                                      • Forecast
                                                                                                        • Consumer survey data
                                                                                                          • Abbreviations and terms
                                                                                                            • Abbreviations
                                                                                                              • Terms
                                                                                                              • Appendix – The Market

                                                                                                                  • Figure 51: Total US revenues and forecast of full-service restaurants and limited-service eating places*, at inflation-adjusted prices, 2015-25
                                                                                                                  • Figure 52: Total US revenues and forecast of full-service restaurants, at inflation-adjusted prices, 2015-25
                                                                                                                  • Figure 53: Total US revenues and forecast of limited-service eating places*, at inflation-adjusted prices, 2015-25
                                                                                                              • Appendix – COVID-19 Scenario Performance Methodology and Assumptions

                                                                                                                • Scenario performance
                                                                                                                  • Figure 54: COVID-19 scenario forecasts for the foodservice market, 2020-25
                                                                                                                • Rapid COVID-19 recovery, central and extended COVID-19 disruption scenarios outline
                                                                                                                  • Scenario methodology

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