The fast food market - United States

1.2 The global market

After a year **** marked by the health crisis with a significant number of temporary closures of establishments, the global Fast Food market was valued in **** at *** billion USD, and is expected to grow with a compound annual growth rate of *.**% to reach a value of **** billion USD in ****.

Global Fast Food Market World, ****-****, USD billion Source: ****

over USD ** billion

The ** largest fast food brands in the world World, ****, USD billion Source: ****

1.3 The American market

The U.S. fast food market was estimated at USD ***.* billion in ****.

The constant growth observed since **** was abruptly interrupted by the health crisis, with a decrease of nearly **% from **** to ****. Nevertheless, a recovery is observed from ****, confirmed in ****.

US fast food restaurant market United States, ****-****, in USD billion Source: ****

over USD ** billion

The ** largest fast food chains in the US United States, ****, in billion USD Source: ****

2.1 Determinants of US demand

If we first look at the age of American adults who consume Fast Food, we can see that the share of the population consuming it is greater in the youngest categories.

Indeed, while nearly **% of the American population aged ** to ** years old consumes Fast Food, only **.*% of the population over ** years old consumes it.

Percentage of adults consuming Fast Food by age United States, ****, in percent Source: ****

If we then look at the share of consumers by income bracket, we see that the share of fast food consumers increases with income. Thus, the part of the population with the highest incomes is proportionally the part that consumes the most Fast Food.

Fast food consumption by income level United States, ****, in percent Source: ****

Finally, we observe that U.S. demand is primarily geared toward lunch and dinner, with smaller shares of consumers for breakfast and snacks. 

Fast food consumption by meal type United States, ****, in percent Source: ****

2.2 Demand by segment

The Top Agency website offers data on the patronage of major fast food chains in the United States.

If we distinguish the segments of the sector via their category of offer, it is possible to identify trends in demand by type of Fast Food.

For example, the following chart shows the trend in patronage of the major fast food chains by segment from January **** to June ****. It can be seen that while the pizza and Mexican food segments show positive trends in terms of patronage, the burger segment shows a more mixed picture as Burger King saw a significant decline in traffic, and the fried chicken segment was even more worrisome, with Chick-fil-A and KFC seeing a *% decline in traffic.

Evolution of fast food chains by segment United States, January to June ****, in percent Source: ****

The success of regional chains such as In-N-Out, leader in * western states, or Church's Chicken, leader in the states of New York and New Jersey, can be noticed.

If we look at the distribution of demand by segment, we note that burger-based chains are the most present among the leaders in patronage (***). If we rank the leading chains in more than two states, we get the ...

2.3 Popularity of delivery and take-out

The health crisis has led to an increase in the popularity of take-out food. In fact, **% of the U.S. population would have had food delivered to them by early ****. It is also interesting to note that Americans eat **% more packaged food than fresh food and that more than one in four Americans eat the same type of fast food every day. [***]

Most popular types of takeout in the U.S United States, ****, in % Source: ****

Food delivery revenues in the United States United States, ****-****, USD billion Source: ****

3.1 Main market players

The most important players in the market are the established fast food chains. The following graph shows the leaders in terms of establishments.

It can be seen that the leaders in terms of establishments differ from the leaders in terms of turnover. Indeed, while Subway is the chain with the largest number of establishments, the company has only the seventh highest turnover.

Fast food chains with the largest presence in the US United States, ****, in thousands of locations Source: ****

the majority of these establishments are franchises

If we calculate the proportion of franchised restaurants among the establishments of the ** companies listed above, we note that nearly **% of them are in fact franchised.

Share of franchised restaurants of the ** most present fast food chains in the US United States, ****, in percent Source: ****

3.2 Operation of fast food chains

The American fast food market is mostly composed of chains. 

These chains offer mostly highly processed and industrially produced foods. The final product is prepared with standard ingredients and standardized cooking methods. Thus, menu items are prepared in a central supply center in large quantities to exploit economies of scale and are then shipped to individual stores, which store them in large freezers. The stores are generally not equipped with sophisticated equipment or highly skilled labor to keep costs down. When a customer orders a menu item, it is quickly reheated, cooked or assembled and served in cartons, bags or plastic wrap. This process ensures a consistent level of quality and product offering, so that customers ordering the same dishes in the same area are sure to always receive the same product.

Fast food chains emphasize speed, consistency and low cost, as most consumers are looking for a quick and inexpensive meal. To make the supply chain work as efficiently as possible, the setup resembles an assembly line. Simplification, division of labor and standardization are three key variables.

In addition, the interior design of the stores plays a distinctive role. These are standardized and do not change based on location or ...

3.3 Workers in the sector

The Bureau of Labor offers statistics on fast food or counter workers in the United States. Their total number was estimated at *,***,***, with *,***,*** working in the restaurant industry.

The leading states in terms of absolute numbers of workers are.

California: ***,*** workers Texas: ***,*** workers Florida: ***,*** workers New York: ***,*** workers Pennsylvania: ***,*** workers

Wages were highest in the following states: District of Columbia, Washington, California, Massachusetts, and Arizona.

4.1 Current offer and prices of the main players

The fast food market is characterized by intense competition and high product substitutability, which makes price a powerful weapon to wage war. The initial success of the fast food business model is based on a dual variable: price and speed. These two elements are closely linked, because in order to make significant profits, companies must sell a large quantity of product.

The following graph shows the evolution of the average price of an item in the main American chains. In particular, we can see that the average price decreased by almost *% from September **** to May ****.

Average price of a Fast Food item United States, ****-****, in USD Source: ****

Source: ****

4.2 A healthy fast food offer

Development of a lower-calorie offer

There is a development of a healthy fast food offer from the main fast food chains.

In fact, since ****, restaurants that are part of a chain with ** or more locations must offer nutritional information on their products including the calorie count of their options.[***]

These guidelines have caused these chains to develop a healthy offering with a reduced calorie count.

Barbend provides an overview of this offering among the major players in the different segments of the American fast food industry:

Burgers McDonald's Hamburger - *** calories McDouble (***) - *** calories Wendy's Jr. burger - *** calories Jr.Cheeseburger - *** calories Chicken Chick-Fil-A Grilled Chicken Sandwich - *** calories Chicken Tortilla Soup - *** calories KFC Chicken Little & Green Beans - *** calories Snack-Size KFC Famous Bowl - *** calories Pizza Domino's Thin Crust Veggie Pizza (***) - *** calories Chicken Parmesan Sandwich - *** calories Pizza Hut Veggie Lovers Thin n' Crispy Pizza - *** calories Chicken Garden Salad (***) - *** calories Soup, Salad and Sandwiches Subway *-Inch Oven Roast Turkey & Swiss Sub - *** calories *-Inch Veggie Delight with Provolone - *** calories panera Bread Mediterranean Veggie Sandwich on Tomato Basil Bread - *** calories Green Goddess Cobb Salad with Chicken (***) & Apple - *** calories Other Taco Bell Power Menu ...

5.1 US regulations

OSHA Guidelines

OSHA (***) also details the safety rules necessary for any restaurant to include :

Keeping floors clean and dry, Handle food properly, Maintaining fire safety, Maintaining optimal working conditions, Maintain age limits.

Source: ****

FDA Guidelines

When it comes to food, the Food and Drug Administration (***) aims to ensure food safety in large franchise stores and small fast food outlets, with the following measures, among others:

Food Handling: Workers must be trained to recognize the leading causes of foodborne illness, such as salmonella and E. coli. Owners must ensure that employees wash their hands before handling food, separate different types of food to avoid contamination between them, cook all food to the required temperatures and refrigerate leftovers immediately. Preparation: Food preparation surfaces must undergo routine cleaning and must be thoroughly rinsed to remove any residue from used cleaning fluids. Storage: The FDA also proposes rules governing the temperature, humidity and barometric pressure of storage areas for various foods, such as eggs, which must be dried and refrigerated at controlled temperatures.for example, eggs must be dried and refrigerated at temperatures below ** degrees Fahrenheit to prevent the growth of Salmonella Enteritidis bacteria. Nutrition: The FDA requires fast food restaurants to display nutritional information ...

6.1 Segmentation

• McDonald's
• Chick-fil-A
• Taco Bell
• Chipotle Mexican Grill
• Subway
• Pizza Hut USA
• Burger King
• Starbucks Coffee