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USDA: Full-Service Growth ExpectedTo Outpace Fast Food by 2020

WASHINGTON, DC - A forward-looking study released this week by the Economic Research Service of the U.S. Department of Agriculture says that full-service restaurants' growth should outpace fast food over the next two decades.

"Simulations indicate that, between 2000 and 2020, per capita spending could rise by about 18% at full-service restaurants, versus about 6% for fast food. In other words, both segments are likely to grow, but trends favor full-service restaurants relative to fast food establishments. This suggests that while consumers will value convenience, they will also want meals with more variety, amenities and recreation traditionally associated with full-service restaurants," the study's authors wrote.

In analyzing the study's results, the authors noted that increased incomes will impact the away-from-home market. They wrote that consumers with higher incomes spend more money away from home, especially on full-service dining environments that offer greater variety and amenities. Furthermore, the changing structure of households will also have a major impact on eating away from home. The study pointed out that the aging of the American population will dampen the demand for fast food.

The USDA study said a sustained shift in consumer demands appears to be the primary force behind the evolution of the foodservice industry. "A change in demand can alter the competitive dynamics of a market. If consumer demand is shifting in favor of foods and services traditionally offered by full-service restaurants, full-service restaurant companies will be encouraged to operate more outlets offering more variety and dining amenities. Fast food restaurants might also introduce many of these same foods and services themselves," the study concluded.

However, the demographics of America bode ill for fast food. These demands will not only affect the quality of consumers' diets, health and well being, but the structure of the foodservice industry as well. "Restaurant companies and their suppliers will be encouraged to cooperate to ensure the variety of foods and services demanded by consumers," the study suggested.

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