Datassential: 2025 Foodservice Economic Forecast

The market research company looked at the economy to predict what’s coming in foodservice.

October 03, 2024

The foodservice industry is expected to see real growth of 1.0% in 2025, which is on top of dollar growth due to inflationary price increases, according to Datassential’s 2025 Industry Report, created in partnership with IFMA.

The increase is expected to come from gross domestic product growth and a continued strong labor market. “Inflation has started to fall, and we expect that by 2025, it will have leveled out. This means that nominal growth for the industry overall will be the smallest we have seen since the pandemic,” Datassential reported.

According to the report, “Consumer spending on prepared food and non-alcoholic beverages is projected to reach $921.7 billion in 2025, from $895.1 billion in 2024. By segment, a bulk of that—$323.7 billion—is projected to be spent in QSR. The next-highest segment spending is forecast in casual dining, at $153.8 billion, followed by fast-casual at $81.5 billion.”

The market research company also predicted that in 2025, food-away-from-home inflation will begin to subside, though the prices are expected to remain higher than food-at-home rates. Datassential recommended that operators continue to “innovate and tap into experiences and unique offerings to not lose margin and keep patrons coming in the door.”

The industry report also noted that growth is likely to be uneven between brands because “customers are pickier than ever.” To connect with today’s consumers, Datassential said that operators should have a strong sense of their own identity, carve out their niche, and focus on what they do best, therefore promoting a sense of authenticity.

Other 2025 predictions from Datassential in the report include:

  • High costs that may limit growth, specifically with building new locations.
  • Consumers want to treat themselves and are likely to do so with foodservice.
  • Consumers want value, and as menu prices shift with deals, it changed how consumers think about eating out—they’re more open to a wider range of foodservice outlets.
  • As demographics shift (lifestyle changes for Boomers and Millennials, immigration, etc.), offerings may need to change to reflect a more diverse population.

In the October 2024 edition of NACS Magazine, NACS discussed how to cater to Gen Z shoppers and what they want in terms of foodservice, snacks, and drinks. Read more here.