Foodservice disposables demand in the U.S. is projected to increase 3.8% annually to $16.6 billion in 2011. Growth will be fueled by rising disposable personal income and increased spending for food eaten or prepared away from home. Such spending will reflect consumer willingness to pay for convenience, along with interest in more sophisticated food choices. These and other trends are presented in "Foodservice Disposables," a new study from The Freedonia Group Inc., a Cleveland-based industry market research firm.

Fastest advances are anticipated for packaging products, which are forecast to increase at a 4.4% annual pace. Demand will be propelled by favorable growth for limited service restaurants, which account for nearly half of overall restaurant revenues. Continued solid growth of smaller limited service segments, such as fast casual and snack, bakery, and coffee shop restaurants, will also boost packaging demand. Lids and wraps are expected to post the strongest gains. Disposables made from degradable materials will post robust advances from a low base.

Demand for serviceware, including cups, dinnerware, utensils and other products, is projected to climb 3.5% yearly to $7.6 billion in 2011. Growth will be aided by increased carryout food and beverage sales from restaurants and retail stores, and ongoing demand in institutional and other markets. Also adding momentum will be the popularity of coffee houses, increased promotion of premium coffee by quick service restaurants and convenience stores, and increased catering activity by restaurants.

Eating and drinking places, which generated 66% of foodservice disposables demand in 2006, will remain the primary driver of growth in the industry, with above-average prospects also expected in the retail stores and vending market as stores expand and upgrade their prepared food offerings. Demand in eating and drinking places is forecast to expand 3.9% per year to $11 billion in 2011.