Our mouths are getting hotter.
Say what?
According to a recent report by IBISWorld, one of the top 10 industries (in terms of growth and economic contribution) is none other than hot sauce production. Over the past 10 years, the industry has seen an average revenue growth of 9.3% per year, and is projected to grow at an average annual rate of 4.1% over the next five. By 2017, Americans will be breathing fire.
But zesting up our food isn’t all we’re doing. The hot sauce sector is just part of the overall booming foodservice industry (NAICS 722). In February 2012, the National Restaurant Association (NRA) announced that foodservice sales were expected to hit a record $632 billion this year. The second largest private sector employer, the restaurant industry is also projected to enjoy more robust hiring growth in 2012 than the economy as a whole.
Happy about the inch work we’ve made climbing out of the recession? Less excited about cooking at home? Whatever the reason, it seems that more and more of us are eating out (4.8 meals a week, it would seem) or having the food brought in, because catering services are definitely going up as well.
Let’s take a closer look.
OVERVIEW
Over 9 million jobs are packed into the foodservice industry which, since 2009, has grown just over 4%. A few sub-industries have grown even more, such as food service contractors at 10% (includes everything from McDonalds to Piggly Wiggly) and mobile food services at 14% (think Schwan’s).
Here’s a quick breakdown of the industry, along with each sub-industry’s growth since 2009:
| NAICS Code | Description | 2009 Jobs | 2012 Jobs | Change | % Change | 2011 Wages & Salaries | 2011 Supplements | 2011 Earnings |
|---|---|---|---|---|---|---|---|---|
| Source: EMSI Covered Employment - 2012.1 | ||||||||
| 722110 | Full-Service Restaurants | 4,440,274 | 4,622,486 | 182,212 | 4% | $16,940 | $2,604 | $19,544 |
| 722211 | Limited-Service Restaurants | 3,431,512 | 3,552,636 | 121,124 | 4% | $13,425 | $2,055 | $15,480 |
| 722212 | Cafeterias, Grill Buffets, and Buffets | 125,880 | 132,649 | 6,769 | 5% | $16,264 | $2,473 | $18,737 |
| 722213 | Snack and Nonalcoholic Beverage Bars | 469,034 | 491,022 | 21,988 | 5% | $14,370 | $2,247 | $16,617 |
| 722310 | Food Service Contractors | 368,522 | 404,417 | 35,895 | 10% | $23,334 | $3,614 | $26,948 |
| 722320 | Caterers | 146,099 | 149,600 | 3,501 | 2% | $18,686 | $2,917 | $21,603 |
| 722330 | Mobile Food Services | 7,510 | 8,564 | 1,054 | 14% | $16,502 | $2,527 | $19,029 |
| 722410 | Drinking Places (Alcoholic Beverages) | 344,987 | 347,693 | 2,706 | 1% | $14,039 | $2,168 | $16,207 |
Average annual wages for the foodservice industry are $15,767 (no big surprises here). And keep in mind that many of the workers are also part-timers. Most of the workers, which are split pretty evenly male/female, are ages 19-24 (29%) or 25-44 (38%), although 12% is still pretty significant for ages 14-18. We’re picturing a lot of high school kids flipping burgers and washing dishes at those handy summer jobs.
REGIONAL BREAKDOWN
- The industry has the most jobs in states like California (1 million+), Texas (819,000+), Florida (600,000+), and New York (514,000+). Jobs are comparatively scarce in Wyoming (16,249), Vermont (18,385), and Alaska (20,142).
- Alaska (16%), Nevada (11%), and New Hampshire (10%) have the strongest proportionate growth since 2009. Wyoming (-3%) and Wisconsin, Michigan, and West Virginia (all -1%) have gone backwards.
- Wages are highest in Washington, D.C. ($23,873), New York ($19,788), Nevada ($19,344), and Alaska ($18,792). They’re lowest in Iowa ($11,895), Wisconsin ($11,984), and South Dakota ($12,254).
- The industry enjoys the greatest concentration (or specialization) in South Carolina (2009 location quotient 1.21), Hawaii (ditto), Rhode Island (1.13), and Florida (1.12), while Washington, D. C. (0.72), Alaska (0.74), and New Jersey (0.8) have concentrations below the national average. (So what does location quotient tell us exactly? Putting it simply, any location quotient (LQ) above 1.0 tells us that the there is a higher density of jobs per capita in that industry. You can get more info on LQ over here.)
This table ranks the states according to the number of foodservice jobs in 2012:
| State | 2009 Jobs | 2012 Jobs | % Change | 2011 Avg. Annual Wage | 2009 National LQ |
|---|---|---|---|---|---|
| California | 1,028,000 | 1,077,162 | 5% | $17,568 | 1.01 |
| Texas | 766,098 | 819,307 | 7% | $16,031 | 1.08 |
| Florida | 557,370 | 601,540 | 8% | $16,874 | 1.12 |
| New York | 473,782 | 514,552 | 9% | $19,788 | 0.82 |
| Illinois | 372,589 | 387,165 | 4% | $16,489 | 0.97 |
| Ohio | 366,940 | 369,306 | 1% | $13,372 | 1.07 |
| Pennsylvania | 340,213 | 354,742 | 4% | $14,474 | 0.90 |
| North Carolina | 292,495 | 310,410 | 6% | $14,254 | 1.07 |
| Georgia | 294,069 | 296,473 | 1% | $15,608 | 1.10 |
| Michigan | 272,642 | 269,566 | (1%) | $13,640 | 1.04 |
| Virginia | 249,024 | 252,555 | 1% | $15,574 | 0.98 |
| Massachusetts | 212,892 | 228,665 | 7% | $17,929 | 0.98 |
| New Jersey | 210,045 | 218,425 | 4% | $17,364 | 0.80 |
| Indiana | 204,362 | 204,726 | 0% | $13,087 | 1.09 |
| Tennessee | 198,023 | 204,024 | 3% | $15,098 | 1.11 |
| Missouri | 196,208 | 196,444 | 0% | $14,006 | 1.08 |
| Washington | 183,891 | 191,782 | 4% | $16,994 | 0.92 |
| Arizona | 173,339 | 184,280 | 6% | $16,124 | 1.04 |
| Colorado | 169,934 | 180,497 | 6% | $16,278 | 1.10 |
| Minnesota | 162,287 | 165,882 | 2% | $14,150 | 0.91 |
| Maryland | 166,073 | 165,540 | 0% | $16,788 | 0.95 |
| Wisconsin | 166,986 | 164,840 | (1%) | $11,984 | 0.91 |
| South Carolina | 150,941 | 154,036 | 2% | $14,275 | 1.21 |
| Kentucky | 132,380 | 139,188 | 5% | $13,545 | 1.09 |
| Louisiana | 132,375 | 138,107 | 4% | $15,144 | 1.02 |
| Alabama | 135,238 | 135,845 | 0% | $13,552 | 1.05 |
| Oregon | 114,730 | 119,728 | 4% | $15,788 | 1.03 |
| Oklahoma | 111,059 | 116,863 | 5% | $13,768 | 1.05 |
| Connecticut | 96,992 | 99,033 | 2% | $17,758 | 0.87 |
| Nevada | 84,340 | 94,025 | 11% | $19,344 | 1.07 |
| Iowa | 88,546 | 92,166 | 4% | $11,895 | 0.88 |
| Kansas | 87,046 | 86,868 | 0% | $13,020 | 0.93 |
| Arkansas | 77,706 | 79,588 | 2% | $12,821 | 0.98 |
| Utah | 73,386 | 78,455 | 7% | $13,359 | 0.91 |
| Mississippi | 77,109 | 78,215 | 1% | $12,635 | 1.01 |
| New Mexico | 60,305 | 63,054 | 5% | $14,579 | 1.08 |
| Nebraska | 56,993 | 58,877 | 3% | $12,317 | 0.90 |
| Hawaii | 53,928 | 55,844 | 4% | $18,649 | 1.21 |
| West Virginia | 49,270 | 48,997 | (1%) | $12,952 | 1.02 |
| New Hampshire | 42,375 | 46,690 | 10% | $16,284 | 1.01 |
| Maine | 39,712 | 41,356 | 4% | $15,044 | 0.98 |
| Idaho | 39,731 | 39,547 | 0% | $13,008 | 0.92 |
| District of Columbia | 34,453 | 36,740 | 7% | $23,873 | 0.72 |
| Rhode Island | 35,235 | 35,348 | 0% | $15,647 | 1.13 |
| Delaware | 29,762 | 31,385 | 5% | $16,532 | 1.05 |
| Montana | 30,157 | 30,799 | 2% | $13,071 | 1.01 |
| South Dakota | 25,564 | 25,741 | 1% | $12,254 | 0.93 |
| North Dakota | 21,425 | 22,218 | 4% | $13,103 | 0.85 |
| Alaska | 17,301 | 20,142 | 16% | $18,792 | 0.74 |
| Vermont | 16,820 | 18,385 | 9% | $15,774 | 0.82 |
| Wyoming | 16,689 | 16,249 | (3%) | $14,027 | 0.85 |
STAFFING PATTERNS
The 10 occupations that make up the greatest bulk in the foodservice industry are all related to food preparation and serving (SOC code 35). Note the growth in the top two jobs comprises nearly 50% of the industry: combined food preparation & serving workers (+123,646 jobs, 6%) and waiters & waitresses (+72,174, 4%). As is commonly known, most of the jobs are low-skilled, low-wage.
Here are the details of the top 10 occupations in the foodservice industry:
| SOC Code | Occupation | Employed in Industry Group (2009) | Employed in Industry Group (2011) | Employed in Industry Group (2012) | Change | % Change | % of the Total Jobs in Industry Group (2011) | Median Hourly Earnings | Education Level |
|---|---|---|---|---|---|---|---|---|---|
| 35-3021 | Combined Food Preparation and Serving Workers, Including Fast Food | 2,164,065 | 2,231,826 | 2,287,711 | 123,646 | 6% | 24.3% | $8.20 | Short-term on-the-job training |
| 35-3031 | Waiters and Waitresses | 1,897,560 | 1,932,912 | 1,969,734 | 72,174 | 4% | 21.0% | $8.66 | Short-term on-the-job training |
| 35-2014 | Cooks, Restaurant | 767,079 | 783,079 | 798,794 | 31,715 | 4% | 8.5% | $10.70 | Long-term on-the-job training |
| 35-1012 | First-Line Supervisors/Managers of Food Preparation and Serving Workers | 568,572 | 578,493 | 588,802 | 20,230 | 4% | 6.3% | $14.22 | Work experience in a related occupation |
| 35-2011 | Cooks, Fast Food | 500,895 | 508,854 | 518,703 | 17,808 | 4% | 5.5% | $8.40 | Short-term on-the-job training |
| 35-2021 | Food Preparation Workers | 425,965 | 432,404 | 437,912 | 11,947 | 3% | 4.7% | $9.16 | Short-term on-the-job training |
| 35-9021 | Dishwashers | 400,082 | 413,896 | 424,096 | 24,014 | 6% | 4.5% | $8.48 | Short-term on-the-job training |
| 35-3022 | Counter Attendants, Cafeteria, Food Concession, and Coffee Shop | 308,327 | 317,526 | 323,245 | 14,918 | 5% | 3.5% | $8.60 | Short-term on-the-job training |
| 35-9031 | Hosts and Hostesses, Restaurant, Lounge, and Coffee Shop | 294,496 | 300,504 | 306,774 | 12,278 | 4% | 3.3% | $8.70 | Short-term on-the-job training |
| 35-9011 | Dining Room and Cafeteria Attendants and Bartender Helpers | 277,740 | 283,070 | 287,659 | 9,919 | 4% | 3.1% | $8.40 | Short-term on-the-job training |
CONCLUSION
The foodservice industry has become “an economic juggernaut,” according to Hudson Riehle, the senior vice president of the NRA. Food costs, building and maintaining sales volume, and of course the economy remain the biggest challenges, but thanks to both savvy business owners and hungry Americans driving this pent-up demand for eating out (even through the recession), the foodservice industry is certainly squaring these obstacles off.
Data and analysis come from Analyst, EMSI’s web-based labor market tool. If you would like to learn more, please contact us. Find out more about EMSI and our data here. You can reach us via Twitter @DesktopEcon or by emailing Rob Sentz (rob@economicmodeling.com).
