Forecasting Slow Growth & Positive Future for Food Away from Home

At IFMA’s recent virtual Marketing & Sales Conference, attendees could attend a session on the association’s latest 2024 and 2025 Food Away-From-Home (FAFH) Industry and Segment Projections.

IFMA began this year projecting that the entire FAFH industry would grow 0.9%, on a real basis. That calculation balances the industry’s on-site segments (like colleges & universities and healthcare foodservice with their built-in clientele) that look to remain traditionally steady, with the more volatile restaurant segment.

Collectively, on-site segments in 2024 are projected to grow 2%, largely because their recovery from 2020 was slower than that of restaurants. The College & University and Lodging segments are expected to lead on-site growth at 2.0 and 2.8%, respectively. The Business and Industry segment continues a slow recovery, its overall volume is still well below pre-pandemic levels.

Looking more closely at specific segments and what they can expect, there are particular “headwinds” and “tailwinds” for each:

In K-12 Schools (2024: 1.0%; 2025: 0.8%), challenges include decreases in enrollment, limits in facility prep areas, menu planning challenges, and labor shortages. On the plus side, the segment sees increases in breakfast and lunch participation, local food partnerships/school garden programs, and the fact that the category is largely recession-proof.

For Colleges & Universities (2024: 2.0%; 2025: 0.0%), it’s an uphill climb against decreased usage of meal plans (some due to more online education options), supply chain challenges, more off-campus living, and increased food insecurity among students. That is weighed against the positives of the growth in types of dining formats like retail grab-and-go options, increasing menu variety/options that appeal to a more diverse student population, and ongoing technology improvements.

Much of the growth for the Business & Industry (2024: 0.9%; 2025: 0.6%) segment in the next few years is expected to come from white-collar rather than blue-collar locations. Employees are back at many offices, even if only for a few days a week. White-collar offices are also seeing continued increases in their catering and event businesses but, while growing, white-collar dollars are still below their pre-pandemic number. Blue-collar locations are making investments in micro-markets and vending which is keeping their growth positive (though a bit more muted than white collar).

In the Healthcare (2024: 0.9%; 2025: 0.8%) segment, operators saw moderate growth in 2023 and that is expected to continue in 2024 and 2025. This growth is led by the hospitals, with expected decline in healthcare segments such as long-term care and senior living. Within hospitals, patient numbers remain steady and have seen fewer fluctuations as COVID, RSV, and flu counts are no longer spiking. Many healthcare operators are leveraging programs like at-home food offerings or take-home meal kits to grow revenue. Notably, most hospital foodservice revenue comes from non-patient retail offerings and that continues to grow after pandemic-driven declines.

For the combined industry overall, when it comes to these last few months of 2024, we at IFMA feel confident in our February industry predictions. Overall, FAFH should see 0.9% growth for the year.

In February, IFMA will update its forecast with a look at the remainder of 2025. IFMA is proud to partner with Datassential, a leading foodservice research firm, who worked with IFMA to create the projections, as well as five IFMA Foodservice Leadership Councils, who validated them.

IFMA members can access all projections through the IFMA Scope® portal, which provides an interactive and immersive view of real-time segment and market demographic information to aid in business planning.

IFMA’s goal is to provide the most up-to-date, relevant insights and information for its membership and the community. The forecast presentation that was delivered at the 2024 IFMA Marketing & Sales Conference can be accessed through early November by conference attendees. Those who missed the conference can still access the platform and watch recordings of all three days’ worth of sessions. Check out the IFMA website for details at ifmaworld.com.