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Overview and market size
In this report we will examine the landscape in the US for:
- Single location full-service restaurants
- Chain restaurants industry
- Soft drink & soda production industry
- Specialty food stores industry
- Supermarkets & grocery stores Industry
The report will also cover other food & beverage trends, major players, regional considerations, key developments, regulations, and industry associations and events. This report will not cover alcohol, beer, wine, or spirits industry.
Single location full-service restaurants
Market size in 2023 is expected to surpass $208.9 billion with approximately 157,000 businesses. This industry includes single-location, independent or family-operated restaurants that provide food services to patrons. The fine-dining segment performed particularly well over the past five years due to solid growth in the income levels of affluent consumers and an expanding corporate market.
Conversely, restaurants at the lower end of the market struggled with low growth as consumers traded down to the innovative products served by a growing number of new high-quality fast-casual chains. Over the five years to 2027 industry revenue is forecast to increase at an annualized 0.2% to $211.2 billion. In 2023 alone, revenue is expected to increase 1.1%. [Footnote 1]
Chain restaurants
Market size in 2022 reached $57.1 billion. The industry consists of chain and franchised restaurants that provide food services to patrons. Some of the largest players in the industry are Darden Restaurants, Bloomin' Brands, Cracker Barrel Old Country Store, and The Cheesecake Factory. An increase in per capita disposable income increased and unemployment reached record lows causing consumers to spend more, giving rise to greater spending on food away from home, especially on more expensive sit-down meals. Even while experiencing 2022's historic inflation and dreading the seemingly inevitable 2023 recession, industry revenue is forecasted to reach $61.2 billion over the next five years to 2028. [Footnote 2]
Specialty food stores
The market size as of March 2023 for the Speciality Food Stores Industry in the US reached $12.7 billion. Stores in this industry are specialized retailers of premium food products including baked goods, candy and chocolate, snacks, dairy products, coffee, tea, soft drinks, and gourmet foods. Over the five years to 2028, the industry is expected to benefit from improvements in the overall economy and grow at an annualized rate of 1.8% to $13.9 billion. A strengthening industry and low barriers to entry will also likely encourage new entrants with analysts predicting an increase in total establishments at an annualized rate of 0.4% to 45,597 stores in 2026. [Footnote 3]
Supermarkets & grocery stores
As of July 2022, the market size in 2022 was projected to reach $811.5 billion. The three largest players in the US based on market share are Kroger Co, Albertsons Companies, and Publix Super Markets. Operators in this industry have benefited from rising discretionary income and various consumer trends. Consumers have shifted shopping preferences to premium, organic, and all-natural brands. Industry revenue is set to rise at a slow annualized rate of 0.8% to $846.4 billion over the five years to 2027. [Footnote 4]
Food purchasing decisions
U.S. households with higher incomes spend more money on food, but the amount spent represents a smaller overall portion of their budgets. In 2021, households in the lowest income quintile spent an average of $4,875 on food (representing 30.6 percent of income), while households in the highest income quintile spent an average of $13,973 on food (representing 7.6 percent of income). [Footnote 5]
Environmental sustainability
Four in ten Americans (39%) say environmental sustainability has an impact on their decision to buy certain foods and beverages. Although sustainability still ranks below other purchase drivers, like taste and price, its importance has increased substantially from 27% in 2019. Across the broader population, nearly three-quarters (73%) of Gen Z believe their generation is more concerned about the environmental impact of food choices than other generations, followed closely by Millennials (71%), with whom they share many perspectives and purchasing behaviours. Compared with Baby Boomers, Gen Z is more likely to purchase products labelled as “Small carbon footprint/carbon neutral” and “Plant-based.
Increase in diet or eating patterns
In 2022, 52% of Americans report that they followed a diet or eating pattern in the past year, a significant increase from the past few years (39% in 2021, 43% in 2020, 38% in 2019), one that is not driven by the two new options this year, mindful eating and intuitive eating. The increased dieting has come primarily from consumers under age 50. The most common diets or eating patterns in 2022 included clean eating (16%), mindful eating (14%), calorie counting (13%), and plant-based (12%).
Online grocery shopping
A quarter of Americans buy groceries online at least once a week, which has increased significantly since 2021 (20%) and 2020 (only 11%). Online shoppers tend to be younger (35% Gen Z, 37% Millennials shop weekly), parents with children under 18 (43%), and those with higher income (31% $75,000+). Men also appear slightly more likely to shop online.
Increase in snacking
Nearly three in four Americans (73%) snack at least once a day, a substantial increase compared with those who said the same in 2021 (58%). Fruit is the snack most often sought in the morning, while those who snack in the evening gravitate toward savoury/salty snacks (40%), candy, chocolate, and other treats (38%), and cookies, cake, and ice cream (37%). [Footnote 6]
Key developments (Inflation)
In the coming months, food and beverage businesses will face headwinds from consumers uncertain about lingering inflation, geopolitical issues, and a looming recession. These challenges are in stark contrast to the pantry-loading days of the pandemic and come only shortly after these businesses were finally able to pass surging costs for ingredients, logistics and labour to the end consumer.
So far, demand for food and beverage products has remained high, even after price increases. But, in the past few months, we’ve seen more evidence that consumers are changing their spending patterns, including purchasing products less often than they used to or switching to a different brand to save money. Economists anticipate that the unemployment rate will rise. This will put even more pressure on consumers’ budgets, impacting grocery spending in a more substantial way than what we’ve seen till now.
Regional considerations
As with most retail industries, the location of establishments in the Supermarkets and Grocery Stores industry falls broadly in line with how the population is dispersed across the United States. The greater the number of residents, the stronger demand for supermarkets and grocery stores should be. Therefore, major retailers strategically locate their establishments in and near large cities.
The geographic distribution of establishments primarily engaged in manufacturing carbonated soft drinks are aligned with both heavily populated areas and warmer cities. Thus, 23.7% and 19.3% of soft drink manufacturing establishments are in the Southeast and West regions, respectively.
The distribution of establishments that operate in the Specialty Food Stores industry is fairly in line with overall population trends because consumers constitute the largest market for industry goods. the Mid-Atlantic region accounts for 20.35% of total locations, while the West region comprises 22.19% of establishments so far in 2023. California accounts for the most significant share of industry locations, comprising 14.6% of all industry establishments. The second largest concentration of industry locations is the Greater New York City area, which accounted for 8.7% of establishments in March 2023. [Footnote 4]
Major players
Below is a selection of major players in the food and drink sector.
PepsiCo
PepsiCo operates as a food and beverage company worldwide. Its Frito-Lay North America segment offers Lay’s and Ruffles potato chips, Doritos and Tostitos tortilla chips, Cheetos cheese-flavoured snacks, dips, Fritos corn chips, and Santitas tortilla chips. Its Quaker Foods North America segment provides Quaker oatmeal, grits, and rice cakes; and Aunt Jemima mixes and syrups, Quaker Chewy granola bars, Cap’n Crunch and Life cereals, Rice-A-Roni side dishes, Quaker Oat Squares, and Quaker Natural Granola. PepsiCo was founded in 1898 and is headquartered in Purchase, New York.
Tyson Foods
Tyson Foods is a food processor and marketer of chicken, beef, and pork. Tyson Foods, founded in 1935 with headquarters in Springdale, Arkansas, is one of the world's largest processors and marketers of chicken, beef, and pork, as well as prepared foods. The company provides products and services to customers throughout the United States and more than 90 countries. The company is also a provider of protein to many national restaurant chains including quick service, casual, and fine-dining restaurants.
Mars
Mars is a manufacturer of confectionery, pet food, and other food products. In 1911, Frank C. Mars made the first Mars candies in his Tacoma, Washington kitchen and established Mars’ first roots as a confectionery company. In the 1920s, Forrest E. Mars, Sr. joined his father in business and together they launched the MILKY WAY® bar. In 1932, Forrest, Sr. moved to the United Kingdom with a dream of building a business based on the objective of a “mutuality of benefits” for all stakeholders – this vision serves as the foundation of the Mars. Based in McLean, Virginia, Mars has net sales of more than $33 billion and six business segments including Petcare, Chocolate, Wrigley, Food, Drinks and Symbioscience.
Cargill
Cargill is an international producer and marketer of food, agricultural, financial, and industrial products, and services. Founded in 1865, our privately held company employs 142,000 people in 67 countries. Cargill helps customers succeed through collaboration and innovation and is committed to sharing their global knowledge and experience to help meet economic, environmental, and social challenges. Cargill customers turn to Cargill for their scientific expertise when the challenge is enhancing an existing product, improving process efficiencies, or uncovering a solution that helps them launch a first-to-market innovation.
The Coca Cola Company
The Coca-Cola Company (NYSE: KO) is a total beverage company, offering over 500 brands in more than 200 countries and territories. In addition to the company’s Coca-Cola brands, their portfolio includes some of the world’s most valuable beverage brands, such as AdeS soy-based beverages, Ayataka green tea, Dasani waters, Del Valle juices and nectars, Fanta, Georgia coffee, Gold Peak teas and coffees, Honest Tea, innocent smoothies and juices, Minute Maid juices, Powerade sports drinks, Simply Juices, Smartwater, Sprite, vitaminwater and ZICO coconut water. Coca Cola is constantly transforming their portfolio, from reducing sugar in their drinks to bringing innovative new products to market. Coca Cola is also working to reduce their environmental impact by replenishing water and promoting recycling.
Mondelez International, Inc
Mondelēz International empowers people to snack right in over 150 countries around the world. We're leading the future of snacking with iconic global and local brands such as Oreo, belVita and LU biscuits; Cadbury Dairy Milk, Milka and Toblerone chocolate; Sour Patch Kids candy and Trident gum. They are one of the largest snack companies in the world with global net revenues of $25.9 billion and net earnings of $3.4 billion in 2018. They make and sell primarily snacks, including biscuits (cookies, crackers, and salted snacks), chocolate, gum & candy as well as various cheese & grocery and powdered beverage products. They have operations in more than 80 countries and employ around 80,000 in our factories, offices, research & development facilities, and distribution activities around the world.
Regulations and policy
Industry operators are also subject to food safety regulation by the US Food and Drug Administration (FDA) and the US Department of Agriculture (USDA). Stores that sell dairy, meat products of eggs must comply with proper handling and foodborne illness prevention standards set by the FDA, Centers for Disease Control and Prevention (CDC) and other agencies.
Supermarkets & Grocery Stores
Under the US Department of Labour, the Occupational Safety and Health Administration (OSHA) provides various guidelines for grocery stores. For instance, OSHA has guidelines regarding how grocery stores must train their employees, check out items and stock products. Grocery stores that do not follow mandatory OSHA guidelines are subject to penalties. Operators in this industry are also subject to regulation by the US Food and Drug Administration, the US Department of Agriculture, the Environment Protection Agency, and other federal, state, and local agencies.
Restaurant industry
There are regulations covering a range of areas, from food safety and standards to labour conditions. Most regulation is enacted and enforced at the state level, but many federal laws also apply. The main agency responsible for providing guidance and regulation is the US Food and Drug Administration's (FDA). The FDA's Model Food Code, which is a best practice guide to food handling and presentation, applies to this industry and is updated each year.
Industry resources
Food and drink industry associations
Association of Food Industries (AFI) is a non-profit trade association for U.S. food importers and exporters to the U.S. AFI is committed to developing programs for food companies. AFI pro-actively monitors regulatory changes affecting the food import trade, and holds an annual convention, town meetings and many networking opportunities each year.
The mission of the Specialty Food Association is to champion, nurture and connect members to deliver innovative products and expand consumption of specialty foods.
SNAC International is the leading international trade association of the global snack industry, representing snack producers and suppliers. “SNAC” stands for snacking, nutrition, and convenience–three key elements research shows reflect the habits of today’s consumer. Founded in 1937, SNAC has over 400 member companies worldwide.
National Grocers Association (NGA) is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry. Also represented are affiliated associations, manufacturers, and service suppliers, as well as other entrepreneurial companies that support NGA’s Mission and Philosophy.
The National Restaurant Association is the largest foodservice trade association in the world. The National Restaurant Association represents and advocates on behalf of more than 500,000 restaurant businesses.
American Beverage Association (ABA) is the trade association that represents America's non-alcoholic beverage industry. ABA was founded in 1919 as the American Bottlers of Carbonated Beverages and renamed the National Soft Drink Association in 1966. Today the ABA represents hundreds of beverage producers, distributors, franchise companies and support industries.
FMI Food Industry Association works with and on behalf of the entire industry to advance a safer, healthier, and more efficient consumer food supply chain. FMI brings together a wide range of members across the value chain — from retailers who sell to consumers, to producers who supply the food, as well as the wide variety of companies providing critical services.
Food and drink industry events
Americas Food & Beverage - This trade show offers an excellent opportunity for exhibiting companies to participate and explore opportunities to discover new markets and share innovative solutions with approximately 11,000 visitors. Held at the Miami Beach Convention Centre on an annual basis, the American Food & Beverage show is accessed by 450+ exhibitors.
Sweets and Snacks Expo - known as the largest confectionery, sweets & snacks trade event in North America, the trade show is held annually - with an estimated visitor count of 15000 and approximately 1045 exhibitors. It enables the exhibitors to explore the opportunities to grow their business by showcasing their brand products before your targeted prospect comprising influential business professionals, retailers, and end-users.
Winter Fancy Food Show – The Winter Fancy Food Show is where specialty food makers go to exhibit their newest and best products and where buyers go to find their next bestsellers. With thousands of industry professionals all under one roof, the Winter Fancy Food Show is three days of sampling, networking, and education designed to help grow your business.
The Summer Fancy Food Show - The Summer Fancy Food Show in New York is North America’s largest specialty food and beverage event. It displays a wide variety of innovative products and due to its interactive character, it offers great opportunities to network with industry experts.
SIAL - SIAL America connects the food industry by bringing together importers, distributors, retailers, and wholesalers, showcasing various food and beverage categories.
Private Label Manufacturer’s Association – The annual Private Label Trade Show is akin to the aisles of national supermarket, drug chain or mass merchandiser. Nearly every major category is on display for the thousands of visitors and buyers.
National Restaurant Association Show – Access exhibitors that cover a full range of products across 900+ categories. With over 1,800 exhibiting companies, the Show provides the quality suppliers needed to navigate the supply chain and keep up with customer demand.
Natural Products Expo West – Natural Products Expo West is the leading trade show in the natural, organic, and healthy products industry. Natural Products Expo provides a valuable opportunity for in-person discovery, drawing buyers from both big box and small independent retailers, who are seeking the hottest products in organic and natural foods, clean beauty and home products, and supplements and ingredients.
Food and Drink Industry Information
Institute of Food Technologists (IFT) – Since 1939, the Institute of Food Technologists (IFT) has been a forum for passionate science of food professionals and technologists to collaborate, learn, and contribute all with the goal of inspiring and transforming collective scientific knowledge into innovative solutions for the benefit of all people around the world.
Registrar Corp – Registrar Crop help companies comply with FDA regulations, including UK companies. They can assist with registering your facility, understand labelling requirements, specific forms, and more. Let us know if you would like a contact here to connect with, and I would be happy to write an introduction.
Ashbury Labelling - Ashbury is a leading provider of regulatory and technical advice for your specification, labelling, artwork, and product information challenges. Ashbury Labelling work collaboratively with clients to discover practical solutions that are tailored to their needs and help them to navigate the complex world of product information compliance so they can launch, expand, and protect their brand.
FDA Food Industry Resource – FDA resources available for the food industry.
Beverage Industry – Subscribers include beverage marketers, manufacturers, distributors, retailers of soft drinks, bottled water, beer, juice and juice drinks, wine/liquor, dairy, coffee and tea, and non-carbonated beverages of all type.
Food Processing – "The information source for Food and Beverage Manufacturers” a publication and resource available to food and drink companies.
Footnotes:
1 Single Location Full-Service Restaurants in the US, accessed April 2023 (sign in required)
2 Chain Restaurants Industry in the US, accessed April 2023 (sign in required)
3 Specialty Food Stores Industry in the US, accessed April 2023 (sign in required)
4 Supermarkets & Grocery Stores Industry in the US, accessed April 2023 (sign in required)
5 USDA Food spending as a share of income declines as income rises, accessed August 2023 (sign in required)
6 IFIC 2022 Food and Health Survey Report, accessed August 2023