Getting Consumers to Eat Out vs. In Challenges Foodservice Industry

CHICAGO — The foodservice industry is still struggling with getting people out of their homes to eat vs. eating at home.

Foodservice spending was up 3 percent for the year ended April 2015, but the increased spending did not equate to a rise in foodservice visits, which were flat for the period, according to The NPD Group.

NPD’s ongoing food consumption market research shows that four out of five meals are prepared and consumed at home, and in-home meals have been on the rise for several years.

Historically, a restaurant meal typically costs three times more than an in-home meal, NPD reported. In 2014, the average cost of a restaurant meal per person was $6.96, compared to $2.31 for an in-home meal.

Young adults are typically the heaviest restaurant visitors, but since the Great Recession, millennials have cut back dramatically on their visits and spending at restaurants. Millennials ate eight more meals at home last year compared to the prior year, while all others ate one additional meal at home.

Older millennials, aged 25-34, who are more likely to have families, have cut back the most on restaurant visits, making 50 fewer visits per person per year over the past several years. Younger millennials, aged 18-24, made 33 fewer visits per person per year in 2014 than they made in 2007.

NPD’s latest research report also noted that:

• Consumer spending on food at home vs. food away from home has been close to a 50/50 split for several years.
• Foodservice spending is up due to price increases, like rising food and operation costs.
• Despite lower gas prices, foodservice visit growth remained stagnant in the year ended April 2015. Traffic has been declining or flat for the past several years.
• Foodservice visits annually per capita are 190, which is three fewer visits per person per year compared to 2013.

“It’s a battle for share within the foodservice industry and a battle for food dollars between in-home and away-from-home dining,” said Bonnie Riggs, NPD's restaurant industry analyst. “In order to grow, foodservice manufacturers and operators need to have a clear understanding of consumer expectations and then they need to meet those expectations. If they don’t, someone else will.”  

The NPD Group provides market information and business solutions intended to drive better decision-making and better results.