Current Trends and Challenges to Watch Out for in the Fast-Food Industry

August 9, 2024

Author: Selina

What Constitutes Fast Food?

Fast food is mass-produced food products designed for quick and efficient preparation and distribution, which are sold by certain restaurants, concession stands, and convenience stores. It is generally associated with chain restaurants, including prominent brands such as McDonald’s, Burger King, and Taco Bell, which typically offer take-out and drive-through services, as convenience and speed are prioritized. Common fast foods include hamburgers, hot dogs, French fries, pizza, tacos, burritos, salads, and sandwiches.

Modern commercial fast food is often ultra-processed food and prepared in an industrial fashion, i.e., on a large scale using standard ingredients and standardized cooking and production methods. It is usually rapidly served in cartons or bags or plastic wrapping, in a fashion that minimizes costs. To supply all restaurants with the same quality and standards, fast food operations make food from processed ingredients at a central supply facility and then ship it to restaurants where it is prepared.

History of Fast Food

The term “fast food” first appeared in the Merriam-Webster dictionary in 1951, but its roots are much older. From ancient times till now, street vendors have sold ready-to-eat foods, mainly to cater to those with no money or those who have fallen on hard times. For instance, a text from the 2nd century Han Dynasty (in China) talks about noodle stands that stayed open all night. In the Middle Ages, street vendors in Europe sold pies, pasties, flans, waffles, wafers, pancakes, and cooked meats. All these people and places sold their food to those who couldn’t cook it, like poor people and travelers. Many street vendors and fast food restaurants do the same at present. For instance, a text from the 2nd century Han Dynasty tells about noodle stands that stayed open all night. In the Middle Ages, larger towns in Europe had street vendors who sold pies, pasties, flans, waffles, wafers, pancakes, and cooked meats. All these people and places sold their food to those who couldn’t cook it, like poor people and travelers. The first fast-food chain that sold hamburgers was White Castle, which opened in Wichita, Kansas, US in 1921. On the other hand, drive-in restaurants had their beginnings when automobiles became more popular and carhops started wearing roller skates to serve customers in cars in the 1940s.

Different Types of Fast Foods

Hamburgers

These can be made with traditional ingredients like beef, chicken, and pork. Recent innovations include plant-based meat substitutes. Companies are now making burger patties made of insects. Mealworm burgers are getting increasingly popular.

French fries

Plain French fries are considered passé. They are now served with several types of delicious sauces, including cheese sauce, peri-peri sauce, and others. Also, the standard cut of French fries (the battonette cut) has undergone changes, with new types like steak fries, waffle fries, and others.

Fried chicken

The most famous of these is Kentucky Fried Chicken, which was started by Colonel Sanders and Pete Harman in Salt Lake City, Utah, US. It is the world's second-largest restaurant chain after McDonald's, with over 30,000 locations globally in 150 countries as of April 2024.

Fish and chips

This quintessential British staple is now popular across the world. It first appeared in the 19th century with the development of trawler fishing, and the first “fish and chips” shop opened in 1860 at Tommyfield Market in Oldham.

Chinese food

Within China, fast food refers to on-the-street pancake vendors and night market delicacies, which include skewered goat meat, calamari, and finger foods. Outside China, Chinese fast foods differ from country to country. For instance, in India, it includes different types of noodles, fried rice, momos, spring rolls, and others, made to suit Indian palates.

Sandwiches and pitas

Sandwiches include gooey cheese, vegetarian, and non-vegetarian options. Pita is a family of yeast-leavened round flatbreads baked from wheat flour, common in the Mediterranean and Levant regions. It is also called a pocket sandwich, as the filling is placed in between the layers of the pita bread.

Pizza

Pizza is one of the most popular types of fast food. Pizza traces its roots back to the flatbreads with toppings that were popular with ancient Egyptians, Greeks, and Romans. Modern pizza, the flatbreads with tomato sauce, cheese, and toppings, was born along the western coast of Italy, in the city of Naples in Italy.

Others

Other types of fast foods include chicken nuggets, tacos, hot dogs, and others. Tacos have been made famous by Taco Bell, which was started by Glen Bell, and he opened the first Taco Bell restaurant back in 1962 in Downey, California, US.

Top Fast-Food Trends and Industry Challenges

  1. 1
    Healthy fast food

    Fast food chains are reinventing classic staples and making them healthier by changing ingredients or improving existing cooking methods.

  2. 2
    Celebrity collaborations

    Collaborations with celebrities and McDonald’s have proven highly successful, resulting in really good menu items worth trying.

  3. 3
    AI-powered customization

    AI in the fast food industry enables enhanced operational efficiency, improved customer experiences, and mitigated labor challenges.

  4. 4
    Driverless food trucks

    Contactless handling of food ensures improved hygiene and cleanliness, enabling companies to comply with related regulations on food safety.

  5. 5
    Bug burgers

    Companies are now making burger patties made of insects; Mealworm Burgers are getting increasingly popular.

“Healthy” Fast Food

Fast food chains are trending towards reinventing classic fast food staples and making them healthier by switching up their ingredients or changing their cooking methods. While menu items like plant-based burgers or veggie pizzas have existed before, companies like Pizza Hut, Taco Bell, and even Wendy’s are looking to expand their offerings and provide customers with healthier alternatives to typical fast food.

More Celebrity Collaborations

Rappers like Travis Scott and Saweetie both had signature, limited-time meals with McDonald’s Even K-Pop groups like BTS and New Jeans collaborated with the fast food juggernaut. These all proved to be highly successful and gave birth to really good menu items that are actually worth trying. For instance, the Travis Scott Meal, named after the rapper, was a $6 combo including a Quarter Pounder with Cheese, bacon, and lettuce and served with medium fries, BBQ Sauce for dipping, and a Sprite.

AI-Powered Customization

While fast food chains like Subway already let customers personalize their food, the use of AI could customize your meal and get recommendations made specifically for you. AI is also making an impact in the highly competitive industry with robot servers and kitchen robots that can prepare certain foods. The fast food industry is increasingly turning to AI to enhance operational efficiency, improve customer experiences, and address labor challenges.

Driverless Food Trucks

China has witnessed the recent introduction of fully automated, self-driving food trucks that are completely unmanned, meaning that there are no humans involved when it comes to serving your food. The contactless handling of your food ensures that it’s safe and clean. It’s basically a futuristic vending machine with wheels.

Bug Burgers

Considered a great alternative source of protein, insects have found their way into flour and fitness bars. Now, companies are now making burger patties made of insects. Mealworm Burgers are getting increasingly popular so don’t be shocked if popular burger joints like Burger King or Shake Shack started offering bug burgers on their menu.

Fast Food Industry Challenges

ChallengeExplanationExample
Training and staff turnoverAbusive customers, long hours, low pay, and early morning working hours are among the major reasons for the high turnover rate in the fast food industry. The average turnover rate is as high as 150%. In India, a fifth of fast food restaurants don’t pay even minimum wages to employees. Therefore, an unmotivated workforce leads to high turnover rates. Fast food outlets generally fail to provide competitive working conditions and are unwilling to invest in training.Many fast food chains, like McDonald’s, face high staff turnover rates, which can disrupt operations and increase training costs. The COVID-19 pandemic exacerbated this issue, as new health regulations required additional training, further straining resources.
Digital transformationLike in all other industries, digital transformation impacts products, processes, and business models alike in the fast food industry. The main hindrances to digital transformation in the industry are unwillingness to change, lack of workers with the necessary technical skills, the presence of legacy systems, and risks related to data protection and security breachesTaco Bell has been aggressively pushing for digital sales, aiming to double them to $8 billion by 2023. This involves integrating mobile apps, curbside pickup, and personalized offers, which require significant investment in technology and staff training.
Supply chain disruptionsDisruptions in the supply chain, often exacerbated by global events, impact the fast food industry significantly. Disruptions in the supply of raw materials, ingredients, or packaging materials can lead to production delays or even halt production altogether. These can be caused by transportation issues, natural disasters, pricing fluctuations, and even a sudden spike in demand.  During the COVID-19 pandemic, many fast food chains experienced supply chain disruptions. For instance, KFC faced chicken shortages in the UK, forcing temporary closures of several outlets. This highlighted the vulnerability of global supply chains.
Health and nutrition concernsThis challenge has witnessed increased awareness in recent years. Many fast foods like hamburgers, chicken nuggets, and others are very high in sugar, salt, saturated or trans fats, and many processed preservatives and ingredients. It also lacks some beneficial nutrients. Besides leading to chronic ailments like hypertension and diabetes, the consumption of fast food encourages binge eating.Fast food chains like Burger King have been under pressure to offer healthier options. In response, the company introduced items like the Impossible Whopper, a plant-based burger, to cater to health-conscious consumers.
Changing consumer preferencesEvolving consumer preferences are shifting toward healthier and more sustainable food options, challenging traditional fast food offerings. This means that either fast food businesses lose customers and revenue to other companies that offer healthy food or change their menus, which requires substantial R&D in healthier food options like burgers, using healthier ingredients.Consumers are increasingly seeking sustainable and ethically sourced food. McDonald’s has responded by committing to sourcing 100% of its coffee, palm oil, and fish from sustainable sources.
Competition from fast casual chainsThe rise of fast-casual dining establishments has intensified competition in the industry. Fast food is typically lower quality and less expensive than fast-casual restaurants that offer consumers freshly prepared, higher-quality food in an informal setting, with counter service to keep things speedy. Furthermore, fast-casual establishments offer customizable options to customers and usually, have open kitchens where diners see how cooks prepare their meals.Fast casual chains like Chipotle offer higher-quality ingredients and customizable options, attracting customers who might otherwise choose traditional fast food. This competition has forced fast food chains to innovate and improve their offerings.

Solutions to Overcome Challenges

  • Fast food chains can adapt by introducing healthier menu items, using locally sourced ingredients, and transparently communicating their efforts to meet consumer demands.
  • Fast food chains can provide nutritional information transparently, offer more balanced meal options, and engage in public awareness campaigns regarding their commitment to health.
  • Diversification of suppliers, local sourcing, and resilient supply chain management strategies can help mitigate supply chain disruptions.
  • Fast food brands can invest in robust digital platforms, mobile apps, and online delivery services to meet the demands of an increasingly digital-savvy consumer base.
  • Fast food brands can focus on enhancing their value propositions, such as speed, convenience, and affordability, while also considering menu innovations to stay competitive.
  • Implement comprehensive staff training programs, offer competitive wages and benefits, create a positive work culture, and provide opportunities for growth within the organization.

 Fast Food Industry: Interesting Facts

  • The fast food industry generated a whopping $907 billion (approx.) in 2023.
  • 37% of Americans consume fast food on a daily basis. In 2023, there were 805,500 franchise owners in the US.
  • The fast food industry heavily relies on genetically modified organisms (GMOs).
  • The fast food industry continues to expand globally, with emerging markets in Asia, Latin America, and Africa driving growth.
  • The production and consumption of fast food have significant environmental implications, from deforestation and habitat destruction for livestock grazing to carbon emissions from transportation and packaging waste.
  • Fast food companies employ a variety of marketing tactics to attract customers, including advertising campaigns, promotions, and sponsorships. They often target children and adolescents through appealing mascots, toys, etc.
  • Innovation is a driving force in the fast food industry, with companies constantly introducing new menu items, flavors, and formats to stay competitive.
  • The economic impact of the fast food industry extends beyond job creation to include supply chain management, franchising opportunities, and contributions to local economies.
  • Despite its reputation, the fast food industry has made efforts to offer healthier options to consumers, including salads, grilled proteins, and reduced-calorie meals.
  • Fast food has become intertwined with social norms and customs, influencing how people socialize, celebrate, and even mourn. Its ubiquity in popular culture, from movies and TV shows reflects its status as a cultural phenomenon.

Conclusion

The economic impact of the fast food industry extends beyond job creation to include supply chain management, franchising opportunities, and contributions to local economies. Though it may offer convenience and affordability, it comes with a host of considerations, from nutritional concerns and health risks to environmental impact and societal implications. By making informed and conscious choices, consumers can navigate the world of fast food more responsibly.

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FAQs

Several fast food restaurants have devised initiatives to reduce their carbon footprint so the environmental impacts of fast food can go down. Domino's has committed to achieving zero net emissions by 2050.

Disruptions in the supply of raw materials, ingredients, or packaging materials can lead to production delays or even halt production altogether.

Abusive customers, long hours, low pay, and early morning working hours are among the major reasons for the high turnover rate among fast food workers.

Yes, competition in the fast food industry is very high since newly entering brands must compete with the top well-established fast food brands.
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