Food and Beverage Industry Trends 2024: Key Challenges and Future Predictions

Driven by a diverse and exciting ecosystem of passionate, ambitious, and often young entrepreneurs, the Food & Beverage (F&B) sector is a highly competitive environment full of immense challenges and exciting opportunities.

Expert Market’s 2024 industry report, sponsored by Toast,  is informed by a survey of 522 U.S. food and beverage professionals, from restaurant owners to food service managers, providing insights into the real-time challenges and opportunities within the industry.

This year, labor shortages and operational efficiencies have emerged as two key areas of concern, amongst many other insights we’ve gleaned from our comprehensive data collection. To equip you with the necessary information to navigate this competitive landscape, read on for a detailed look at what’s driving the U.S. restaurant sector forward in 2024.

General Food and Beverage Statistics

The size of the industry

Featuring significant participation from small to medium-sized enterprises, the U.S. food and beverage industry is a vast and dynamic landscape. Our comprehensive survey captures a snapshot of the industry’s scale:

• Workforce Overview: The total U.S. restaurant and food service workforce stands at approximately 9.2 million individuals.
• Establishment Numbers: There are over 201,865 quick-service restaurants across the nation.
• Employment Distribution: Workforce distribution across different establishment sizes ranges from small teams (1-4 employees) in 750,000 locations to large staff numbers (250+ employees) in around 2,000 establishments.

• Business Size and Revenue: The majority of F&B establishments are categorized as small to medium, with 78% reporting annual revenues between $100,000 and $5 million. The average revenue per establishment is approximately $3,117,800.
• Management Diversity: About 42% of respondents work in full-service restaurants, with significant management diversity noted—52% manage a single establishment, while 44% oversee between 2 and 5.

The workforce

The F&B sector is bolstered by a deeply experienced workforce, with a significant proportion of individuals having over a decade of industry involvement. Here are the key facts:

• Longevity in the Industry: The average tenure of professionals within the industry is 10 years, with 55% of individuals surveyed having more than 8 years of experience, highlighting a seasoned workforce adept at navigating the complexities of the food service landscape.
• Ownership and Management Experience: Owners typically have a longer tenure, with 60% boasting more than 15 years of experience, compared to managers who often have shorter durations. The average tenure for owners and managers combined is 8.2 years. This level of experience is critical for maintaining operational continuity and fostering growth.
• Job Role Longevity: Bar and restaurant owners show the highest longevity of staff roles, with over 57% and 64% respectively having more than 15 years of experience. This indicates that the most enduring participants in the industry are those who have invested years in cultivating their businesses and expertise.

Challenges and Predictions for the Food and Beverage Industry

Our data highlights several significant challenges facing the Food and Beverage industry, some of which are related to broader societal concerns and others specific to industry operations.

Labor shortages

Labor remains a critical issue in the Food and Beverage industry with nearly a quarter (23%) of the industry expressing concern over shortages today, according to our survey.

Most striking is that a huge 82% of businesses are actively seeking new hires, highlighting the day-to-day and long-term difficulty of staff recruitment, retention, and training that almost half (47%) of the managers we interviewed stated as a primary pain point.

This is particularly acute in hiring skilled culinary roles like chefs and cooks who represent 30% of open roles across the industry.

And just over a quarter (26%) of those we interviewed believe staffing shortages will only worsen over the next 12 months, requiring strategic approaches to workforce management if Food and Beverage businesses want to avoid impacting their overall operational efficiency.

Economic instability and rising costs

Economic challenges are another major concern of those working in the Food and Beverage industry, with 47% worried about rising operational costs (27%) and general economic instability (20%) in the U.S. economy.

This is a primary concern of business owners, with 56% stating that managing operational costs and maintaining profitability is a core work-based challenge. Economic uncertainty is a shared worry of owners and managers alike, ranking second among all work-based challenges (52% of owners and 35% of managers respectively).

More specifically, those in the industry cite significant stresses over increases in rent (52%) and fluctuating ingredient costs (37%) as two of the leading financial concerns. Owners are also concerned by seasonality and fluctuations in business incomes (37%) across each financial year.

Those surveyed hope economic uncertainty will be slightly less of a concern in 2025, dropping from 20% to 16% of respondents believing it to be an operational risk this time next year. While that indicates some optimism within the Food and Beverage industry, overall financial pressures of operating are expected to remain a critical issue in 2025 and beyond.

Customer relations

Shifts in consumer behavior have required Food and Beverage businesses to adapt, marking the use of new strategies and tactics to keep customers on their side.

Namely, data from the U.S. Census Bureau (Advance Monthly Sales Food Services, 2024) suggests at least a 5% decline in footfall since last year. This has prompted a significant 45% increase in the adoption of loyalty program software since last year in efforts to increase customer retention, according to our survey.

Businesses are also attempting to appeal to customers in other ways, such as implementing limited-time menu offerings (34% of those we surveyed), special promotions (41%), flexible pricing strategies (15%), and improving digital ordering and delivery options (29%).

As consumer preferences evolve, further adoption of digital solutions like CRM systems and online ordering will be critical. Businesses will need to leverage data-driven insights to dynamically adjust their service models and marketing strategies to enhance customer experiences and operational efficiency.

Expert Market’s View: Our Recommendations for Food and Beverage Businesses

Our analysis reveals that the Food & Beverage industry continues to be a complex landscape to navigate in 2024. However, despite being marked by fluctuating operational costs, economic uncertainties, and persistent staffing challenges, amongst other challenges, the sector remains robust, buoyed by businesses’ and employees’ resilience and adaptability.

By embracing an approach that prioritizes operational and financial efficiency, adaptable staffing retention strategies, and implementing modern technology, businesses should be able to withstand present conditions and set themselves up for future growth. Here are Expert Market’s recommendations for Food and Beverage businesses in full.

Improving operational efficiency

Notoriously tight on profit margins, effective cost management is crucial for a Food & Beverage business. Monitoring expenses related to ingredients, labor, utilities, rent, and equipment will help keep a lid on ballooning prices and unnecessary purchases.

What’s the best method to do so? We recommend adopting advanced inventory management systems that can predict and adapt to consumption patterns, reducing wastage and improving the efficiency of your purchases.

Integrating digital order management systems that track the number of sales, orders, stock, and fulfillments can streamline operations too, supporting smoother communication between the kitchen and front-of-house service.

Often these tools come as part of CRM (Customer Relations Management), POS (Point Of Sale), and KDS (Kitchen Display Systems) software packages. You’ll need technology solutions that seamlessly integrate with your current systems in-house and online, to ensure a unified service experience for employees and customers alike.

Strategic staffing solutions

Staff shortages are a significant bottleneck for the Food and Beverage industry, with high turnover rates and the demanding nature of Food and Beverage roles. Effective recruitment strategies should focus not just on filling positions, but on attracting and retaining talent aligned with the company’s culture and values.

This can be achieved through competitive compensation, robust training programs, and career development opportunities that emphasize the value of each employee’s contribution.

Emphasizing work-life balance by implementing flexible work arrangements – particularly for jobs with higher turnover rates – and recognizing staff efforts can also enhance job satisfaction and loyalty. Flexible staff scheduling can also be financially beneficial for your business, as during times of low footfall you can cut costs through small numbers of staff.

Building economic resilience

Given the industry’s sensitivity to economic shifts, businesses must develop strategies to maintain customer engagement even during downturns or out-of-season periods.

We suggest the strategic use of loyalty programs, which encourage repeat business through discounts, and special offers tailored to customer preferences. These programs not only foster customer loyalty but also provide valuable data to optimize marketing strategies and future inventory decisions around fast-evolving customer preferences.

Similarly, with the rise of food ordering and delivery services like Doordash, F&B businesses can benefit from enhancing their online presence. Digital interfaces that are user-friendly and mobile-compatible can significantly boost customer interactions and satisfaction, while multi-channel marketing strategies may engage customers across different platforms.

Supporting growth and creativity

For owners, particularly those driven by a passion for culinary creativity, the dual demands of creative and financial management can be challenging.

Implementing user-friendly financial management software can alleviate much of the administrative burden, simplifying various tasks including budgeting, payroll, and accounting. Additionally, offering targeted training in financial literacy specifically designed for the F&B sector can empower owners and managers with the skills needed to effectively oversee finances.

Methodology

Our methodology was designed to gather insights from the U.S. food and beverage industry, focusing on the perspectives of single-site or small multi-site chain operators managing fewer than 20 restaurants. The survey targeted industry professionals, including owners and managers of bars and restaurants, chain businesses, food and beverage industry operations, and food service businesses.

Population and sample size

We reached out to a broad spectrum of professionals within the specified categories to ensure diverse representation across different operational scales and geographic locations. A total of 522 respondents participated in the survey, providing a statistically robust sample that reflects the varied facets of the industry.

Data collection

The survey was conducted in January 2024, preceded by a pilot study aimed at identifying key industry themes. This preliminary phase helped refine the survey questions and ensure relevance to current industry challenges and trends.

Data collection was facilitated by a third-party panel company, which helped us reach an adequate number of participants and ensured the validity of the data collected.

Data analysis

Our analysis included segmentation and correlation techniques to dissect the data into clear business breakdowns: by establishment size, revenue, and other operational factors. This approach allowed us to identify patterns and relationships between different variables affecting industry dynamics.

For graphic representations, seen on this page and in the full Food & Beverage Trend Report document, results are presented in a format where unlabelled percentages on the Y axis represent the total percentage of responses from all surveyed participants, providing a clear, quantitative insight into the state of the industry.