Technology is often the default standard-bearer for showing how much we’ve changed as a culture, from the portable delivery of music and movies to the ever-slimming size of what was once called a “telephone.”
But here’s another shift: For more than 40 years, we have increasingly become consumers of food that’s not made – or eaten – in our homes.
Dining out, whether for celebration or convenience is part of the American fabric, and the trend doesn’t appear to be reversing anytime soon.
The data behind the changing landscape shows how far we’ve come. In 1970, for example, 25.9% of all food spending was away from home; by 2012, that share rose to its highest level of 43.1%.1
Research by the US Department of Agriculture has pointed to a number of factors that have contributed to the trend of increased dining out since the 1970s, including a larger share of women employed outside the home, more two-earner households, higher incomes, more affordable and convenient fast food outlets, increased advertising and promotion by large foodservice chains, and the smaller size of US households.
Unsurprisingly, this evolution of consumer behavior has helped generate growth and increase the competition within the restaurant industry.
Between 1970 and 2013, food and drink sales in the US restaurant sales grew 15 times and in 2014 are expected to hit a record high, growing 3.6% year-over-year to $683.4 billion.2
For investors who expect the dining habits of consumers to continue to push future restaurant sales growth ahead, this motif may be an alternative worth exploring.
1US Department of Agriculture, Food Consumption and Demand, Nov. 22, 2013, http://www.ers.usda.gov/topics/food-choices-health/food-consumption-demand/food-away-from-home.aspx, (accessed May 28, 2014).
2National Restaurant Association, 2014 Restaurant Industry Forecast, https://www.restaurant.org/Downloads/PDFs/News-Research/research/2014Forecast-ExecSummary.pdf.