Name: Dollar, diners & dishes: A look inside the industry
Uploaded: 2024-06-24T15:36:11.710Z
Duration: 347.11
Description: About a third of all meals consumed in the US come from the foodservice industry and the sector continues to grow year-on-year. Joe Pawlak, Managing Principal at Technomic, breaks down the foodservice interconnected community of operators, distributors, and manufacturers and explains how they are driving an industry projected to reach nearly $1.1 trillion in 2024.

Joe Pawlak_v3.mp4

Joe Pawlak_v3.vtt

English

{{00:00:00}}
It's easy to turn on the spigot for

{{00:00:04}}
a few more dollars in your pocket.

{{00:00:05}}
It's also very easy to turn off the spigot
if you have fewer dollars in your pockets.

{{00:00:19}}
Well, the food service industry
is really a community of a

{{00:00:22}}
number of links in a channel.

{{00:00:24}}
I would describe it as starting with
what we call the food service operator,

{{00:00:28}}
which are restaurateurs,  people that
run hotel food service, school food

{{00:00:33}}
service, and other entities like that.

{{00:00:35}}
And then you have the distribution
community, who gets products to

{{00:00:39}}
these operators, and then you have
the manufacture community,  that

{{00:00:43}}
produces these products,  and
gets them into the channel.

{{00:00:48}}
So really they are a community that works
together to provide all these products.

{{00:00:52}}
And then makes them who the operator does
to consumers who enjoy them either at

{{00:00:57}}
their dinner table or take them out to
eat,  and,  get an enjoyable experience.

{{00:01:09}}
The US food Service industry is
over a trillion dollars in 2023.

{{00:01:14}}
About 1 trillion, $30 billion.

{{00:01:17}}
So it's.

{{00:01:18}}
actually very large.

{{00:01:20}}
And this year we expected to add
another about 50 billion dollars.

{{00:01:24}}
So almost 1.

{{00:01:25}}
1 trillion dollars.

{{00:01:26}}
So it actually is a very, very big
industry compared to others in the U.

{{00:01:30}}
S.

{{00:01:31}}
If you look at the number of
meals that are eaten by consumers

{{00:01:34}}
annually, it's around 365 billion.

{{00:01:38}}
About 120 billion of that is
within the food service industry.

{{00:01:44}}
So it is a lot of meals you're talking
about that's consumed through,  operators

{{00:01:49}}
that are preparing meals away from home.

{{00:01:56}}
If you look at the, the food service
industry, there is variations when

{{00:02:00}}
you look at what we call the different
channels or the different segments.

{{00:02:03}}
You have, first of all, the limited
service segment, which is what we

{{00:02:06}}
call fast food traditionally, but
also we have what we call better

{{00:02:10}}
fast food, which is fast casual.

{{00:02:12}}
And if you think of people like
Chipotle, or you think about

{{00:02:16}}
people like Panera Bread, it's
taking fast food to another level.

{{00:02:20}}
It's fast service, but better quality
products, you have the full service

{{00:02:24}}
channel, which is sit down meals.

{{00:02:26}}
That's another channel.

{{00:02:28}}
You have, again, the hotel food service
channel, which I,  can reference to.

{{00:02:32}}
You talk about the, the,
the school channel, you talk

{{00:02:36}}
about,  college and university.

{{00:02:39}}
You can talk about health
care, all providing food to

{{00:02:42}}
their,  to their audiences.

{{00:02:44}}
And each of those channels
have different needs.

{{00:02:47}}
And expectations as relates to the
food that they're producing and what

{{00:02:52}}
they're providing to their patrons.

{{00:02:53}}
So your approaches have to be different
if you're a manufacturer or an operator

{{00:02:59}}
to  approach them and target them with
your,  with your,  value propositions.

{{00:03:11}}
There's a number of factors
that impact our industry.

{{00:03:15}}
Probably the number one that
impacts our industry is what we

{{00:03:18}}
call disposable personal income.

{{00:03:20}}
It's the number, it's the
dollars that consumers have

{{00:03:22}}
in their pockets after taxes.

{{00:03:24}}
The more disposable personal income that
people have in their pockets,  the more

{{00:03:29}}
they're going to spend going out to eat.

{{00:03:32}}
Going out to eat or restaurant
spending is directly tied to

{{00:03:36}}
having more money in your pocket.

{{00:03:37}}
So, it's easy to turn on the spigot
for restaurant spending when you have

{{00:03:42}}
a few more dollars in your pocket.

{{00:03:43}}
It's also very easy to turn off the spigot
if you have fewer dollars in your pocket.

{{00:03:48}}
So we watch disposable
personal income very closely.

{{00:03:51}}
And that's tied directly to the
employment situation as well.

{{00:03:56}}
Recently, we're also watching very closely
Inflation because inflation takes money.

{{00:04:02}}
If we have high inflation takes,
money away from the restaurant

{{00:04:05}}
business and it puts it towards other
necessities that consumers might

{{00:04:09}}
have,  towards housing,  towards food
at home,  towards childcare, etcetera.

{{00:04:15}}
So at least less money that they have for
discretionary is like going out to eat.

{{00:04:19}}
So that's another factor we look at.

{{00:04:26}}
If you look over the 55 years, the
technology has been tracking the industry.

{{00:04:31}}
There's only been three years
where we've seen decline in

{{00:04:35}}
sales on a year over year basis.

{{00:04:38}}
Two of those years were during the
Great Recession in 2009 and 2010.

{{00:04:43}}
And the other year was
during the pandemic year.

{{00:04:46}}
So we see year over year
growth in our industry.

{{00:04:50}}
Again, people just want to go out to eat.

{{00:04:53}}
They need convenience
that food service offers.

{{00:04:57}}
We know that people today
just don't have the time.

{{00:04:59}}
to prepare foods at
home like they used to.

{{00:05:02}}
The younger generation just doesn't know
how to cook like the older generation

{{00:05:05}}
did so food service is a solution.

{{00:05:08}}
Going to restaurants, going out
to eat, getting takeout, getting

{{00:05:10}}
delivery, all provides that.

{{00:05:12}}
So, it's all positive for
our industry going forward.

{{00:05:15}}
And we just anticipate that
growth is going to continue.

{{00:05:17}}
Now, are we going to see growth
that's going to be spiking?

{{00:05:21}}
No, I don't think so.

{{00:05:22}}
That's not going to happen.

{{00:05:23}}
We're going to see consistent
growth,  that is faster than

{{00:05:28}}
what we call supermarket growth.

{{00:05:30}}
And again, it's going as consumers
continue to think about convenience,

{{00:05:34}}
and it puts us in a better position than
what we see in the supermarket aisles.

It's also very easy to turn off the spigot
if you have fewer dollars in your pockets.

Well, the food service industry
is really a community of a

I would describe it as starting with
what we call the food service operator,

which are restaurateurs,  people that
run hotel food service, school food

And then you have the distribution
community, who gets products to

these operators, and then you have
the manufacture community,  that

produces these products,  and
gets them into the channel.

So really they are a community that works
together to provide all these products.

And then makes them who the operator does
to consumers who enjoy them either at

their dinner table or take them out to
eat,  and,  get an enjoyable experience.

The US food Service industry is
over a trillion dollars in 2023.

And this year we expected to add
another about 50 billion dollars.

So it actually is a very, very big
industry compared to others in the U.

If you look at the number of
meals that are eaten by consumers

About 120 billion of that is
within the food service industry.

So it is a lot of meals you're talking
about that's consumed through,  operators

If you look at the, the food service
industry, there is variations when

you look at what we call the different
channels or the different segments.

You have, first of all, the limited
service segment, which is what we

call fast food traditionally, but
also we have what we call better

And if you think of people like
Chipotle, or you think about

people like Panera Bread, it's
taking fast food to another level.

It's fast service, but better quality
products, you have the full service

You have, again, the hotel food service
channel, which I,  can reference to.

You talk about the, the,
the school channel, you talk

You can talk about health
care, all providing food to

And each of those channels
have different needs.

And expectations as relates to the
food that they're producing and what

So your approaches have to be different
if you're a manufacturer or an operator

to  approach them and target them with
your,  with your,  value propositions.

There's a number of factors
that impact our industry.

Probably the number one that
impacts our industry is what we

It's the number, it's the
dollars that consumers have

The more disposable personal income that
people have in their pockets,  the more

Going out to eat or restaurant
spending is directly tied to

So, it's easy to turn on the spigot
for restaurant spending when you have

It's also very easy to turn off the spigot
if you have fewer dollars in your pocket.

So we watch disposable
personal income very closely.

And that's tied directly to the
employment situation as well.

Recently, we're also watching very closely
Inflation because inflation takes money.

If we have high inflation takes,
money away from the restaurant

business and it puts it towards other
necessities that consumers might

have,  towards housing,  towards food
at home,  towards childcare, etcetera.

So at least less money that they have for
discretionary is like going out to eat.

If you look over the 55 years, the
technology has been tracking the industry.

There's only been three years
where we've seen decline in

Two of those years were during the
Great Recession in 2009 and 2010.

And the other year was
during the pandemic year.

So we see year over year
growth in our industry.

Again, people just want to go out to eat.

They need convenience
that food service offers.

We know that people today
just don't have the time.

to prepare foods at
home like they used to.

The younger generation just doesn't know
how to cook like the older generation

Going to restaurants, going out
to eat, getting takeout, getting

So, it's all positive for
our industry going forward.

And we just anticipate that
growth is going to continue.

Now, are we going to see growth
that's going to be spiking?

We're going to see consistent
growth,  that is faster than

And again, it's going as consumers
continue to think about convenience,

and it puts us in a better position than
what we see in the supermarket aisles.

Explainer

About a third of all meals consumed in the US come from the foodservice industry and the sector continues to grow year-on-year.
Joe Pawlak, Managing Principal at Technomic, breaks down the foodservice interconnected community of operators, distributors, and manufacturers and explains how they are driving an industry projected to reach nearly $1.1 trillion in 2024.

Forecasting

Consumer Report

Industry Basics

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Joe Pawlak

Discover insights from other experts

Managing Principal

Discover how the foodservice industry functions as a community of interconnected segments.

Inside the foodservice ecosystem

Pawlak reveals the facts and figures that show the foodservice industry's role in the US economy.

US foodservice market

Dive into the dynamic world of the US food service industry, where traditional fast food meets elevated dining experiences.

Understanding industry variation

Pawlak explains how changes in disposable income affect how much people spend at restaurants, and how employment trends and inflation also play a role in shaping consumer behavior.

Factors impacting industry wellbeing

Explore the evolving habits of people and their role in driving industry growth.