Quick, convenient foods are becoming more popular once again because people feel busier than ever. Who wants to cook after putting in a long day at work? If cooking isn’t an option, but you don’t want to spend half you day’s wages on dinner at a restaurant, then the fast food industry provides a quick alternative to get a meal.
Fast Food Industry Facts
Fast food sales hit $118 billion in 2013.
If you throw in sales at other locations that offer snacks and beverages, but not necessarily a full meal, then another $29 billion in sales was had in the previous year. This is a total increase of almost 5% over 2012. The global leader in the fast food industry is McDonald’s, but there are several competitors that are looking to take over that #1 spot in the near future.
Essential Facts About the Fast Food Industry
1. Chick-Fil-A had the highest average customer sale in the last year at $7.65 per transaction. McDonald’s was in second place, averaging $1.40 less per transaction.
2. 50% of respondents in a recent survey by the NPD Group said they would replace a visit to a fast food establishment with a visit to a food truck.
3. There are over 200,000 fast food providers in the United States alone.
Takeaway: People aren’t just looking for convenience. They’re also looking for value! That’s why half of people would be willing to go to a food truck over the typical service location like McDonald’s, Wendy’s, or Burger King. Innovation has to go beyond making a hamburger bun from pretzel dough or deciding to serve chicken wings. It has to include healthy, tasty options that are within the same price range for the typical consumer of fast food: a family with less than $50k per year of income.
Essential Facts About the Fast Food Industry
1. Food and beverage inputs account for 33% of the total product cost within this industry as of 2013.
2. Market saturation is greatly affecting the market share of each company in this industry. There’s a McDonald’s in just about every town in the United States and several around the world.
3. The average profit margin in this industry is 10% on each product sale.
4. The strongest growth in this industry around the world was seen in Russia, which saw a 7% total growth in sales in the last year.
5. Fast food establishments are adding more protein-laden items to their menus because 78% of consumers believe that high protein intake is necessary for a healthy diet.
6. Independent fast food establishments are less likely to charge more for premium items than a national chain.
7. More than 12.5 million breakfast visits were made in the United States to a fast food establishment.
8. More than 3.7 million people are employed by the fast food industry nationwide.
Takeaway: There will always be a place for fast food, especially in the United States. The key to making this industry become robustly successful is to bridge innovation with healthy food at an affordable price. The growth of Chipotle, for example, is proof that people are willing to pay a little more for something that tastes good and is healthier than a hamburger that has a week’s worth of salt in it.
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