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Food Service: Background and Overview
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The food service industry accounts for a major portion of the American economy.  With over 800,000 locations in operation, major waste streams are generated from preparing and serving of 54 billion meals annually in the United States. The food service industry is guided by the same environmental regulations that affect manufacturers, such as solid and hazardous waste rules and water and air quality regulations. Environmental impacts from food service operations can be significant if improperly managed. For example, the U.S. EPA estimates that approximately 5 gallons of wastewater are generated during the preparation of a single meal.


17th and 18th Century

The earliest food service establishments in the United States began as public houses in 17th century colonial America. These gathering places provided primarily beer to their patrons but did serve a limited choice of food. By the 1700s, taverns had become more abundant. New York City was home to the Tavern Kitchen that regularly sent meals to George Washington?s quarters nearby.

19th Century

Food service changed dramatically in the next century with the transition from the public house-style taverns to full service restaurants. Eating out had taken on a new definition and meaning. The American public now had a variety of commercial eateries from which to choose. The choices ranged from fine dining to cafeterias, to even something as simple as a soda fountain drink.

20th Century

At the start of the 20th century, lunch wagons had become so numerous that in some areas they blocked city streets. Laws were passed which required them to be out of traffic by mid-morning. These mobile food providers soon became parked ? and the American diner was born. Restaurant franchises then began to emerge, with Howard Johnson’s 150 eateries operating under his specifications and selling his products from New England to Florida. The fast food business concept soon started with Richard and Maurice McDonald who pared down their old menu from 25 items to only hamburgers, French fries and shakes. These brothers added the trademark "golden arches" to the design of their restaurant and launched a multimillion-dollar empire.

Food Service Economic Profile

Food service in the United States has grown to a trillion dollar per year business that includes agriculture, transportation, wholesale trade and food manufacturing.  In 1998, the average annual household expenditure for food prepared away from home was $2,030 ? or $812 per person. 

On a typical day, sales reach 1 billion dollars from over 800,000 locations employing about 11 million people, or 8.6 percent of the U.S. workforce. The U.S. food retail industry also includes roughly 130,000 grocery stores that employ approximately 3.5 million people, or about 2.7 percent of the U.S. workforce.  Food service is the nation?s largest employer besides government. 

Food stores and food service establishments provide food products, prepared food and meals to consumers. Food stores, which encompass supermarkets, superettes (small grocery stores), convenience stores and specialized food stores account for 82 percent of all food sold in retail stores. Food service organizations, including both sit-down and fast food restaurants, cafeterias and other related institutions account for 84 percent of prepared food and meals sold.

Food store sales amounted to $458.3 billion in 1999. Supermarkets accounted for 70 percent of the total, while superette and convenience stores accounted for 15 percent and 10 percent respectively. Food service establishments had sales of $339 billion in 1999. Commercial food service operators, such as sit-down and fast food restaurants, accounted for 81 percent of the total, with noncommercial and institutional food service organizations ? such as schools, colleges, hospitals, company cafeterias and correctional facilities ? making up the remaining 19 percent. Figures 1 and 2 summarize the 1999 sales figures for food stores and food service establishments.

Figure 1. Food Store Sales Figures (1999)

Figure 2. Food Service Sales Figures (1999)

Food Service Sector Industrial Classification

The majority of food service operations have historically been classified under the 1987 Standard Industrial Classification (SIC) system codes 4400, 5400 and 5800, 7200. Table 1 provides a detailed description of those industry classifications.


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Hub Last Updated: 3/18/2009