Q4 Trends Report: Catering Orders Surge with New Digital Ordering Channels, Food & Alcohol Insights & Tipping Data

The Q4 2023 Restaurant Trends report looks into catering activity around the holidays, large events, cold-weather food and alcohol preferences, and weekly tipping trends.

Mar 7, 2024 - 08:22
Mar 7, 2024 - 08:23
Q4 Trends Report: Catering Orders Surge with New Digital Ordering Channels, Food & Alcohol Insights & Tipping Data
Q4 Trends Report: Catering Orders Surge with New Digital Ordering Channels, Food & Alcohol Insights & Tipping Data

Toast (NYSE: TOST) today announced its Q4 2023 Restaurant Trends Report, providing insight into the overall state of the U.S. restaurant industry through an analysis of aggregated data from selected cohorts of restaurants and in select U.S. metropolitan areas on the Toast platform, which serves approximately 106,000 restaurant locations as of December 31, 2023. Read more details about our methodology below.

This report looks into catering and large event transactions on the Toast platform, trends in 27 food types and nine alcohol categories, weekly tipping trends, and tips in all 50 U.S. States, from Q4 2023.

Food & Alcohol Trends

To better understand food and alcohol trends in Q4 2023, Toast analyzed order counts for 27 restaurant dishes and nine alcohol types. Toast then compared the Q4 2023 average of these categories to the average for the remaining quarters in 2023 to determine which foods and drinks guests ordered more frequently as the year ended.1

Spoiler: It isn’t salads or hard seltzers.

Cold weather associated with Q4 seemed to drive many consumer food trends — guests ordered warm comfort foods more than the average of Q1 through Q3. Soups/stews saw the largest increase, with +25% more orders than the average for the first three quarters of the year, followed by ramen/noodles (+13%), curry (+12%), dumplings (+8%), steak (+5%), and rice (+5%).1

On the other end of the spectrum, salads saw the most significant decrease in orders, compared to the average for the first three quarters of the year, followed by bowls, nachos, hot dogs (-7%), and tacos (-6%). Interestingly, data suggest that some food categories, like desserts and enchiladas, had no significant change in orders in Q4 compared to the average for Q1 through Q3.

So what did restaurant guests drink with their meals and order at bars in 2023? Whiskey orders were up +21% in Q4 compared to the average of Q1 through Q3, followed by wine (+13%), vodka (+12%), rum (+11%), gin (+10%), tequila (+9%), and beer (+5%).2

Overall, restaurant and bar guests drank approximately +11% more alcohol in Q4 2023 compared to the average of Q1 through Q3.

’Tis the Season for Catering

With so many holidays and end-of-year parties jammed into Q4, it’s no surprise that it’s a busy time for catering and large parties.

Same-store catering transactions increased by +71% in Q4 2023 compared to Q4 2022, and approximately 30% of that increase came through Catering Online Ordering, which launched in Q3 2023. Restaurants serving bakery items, coffees, teas, and desserts had the most catering transactions in Q4 2023, which accounted for approximately 32% of all transactions.3

On average, catering order ticket sizes in Q4 2023 were $160. Tips on catering orders were much lower than other service channels. However, those who did choose to tip on a card or digital payment typically tipped 13% — up +1.3% from Q4 2022. Guests really showed their holiday spirit on New Year’s Eve, where tips on catering orders averaged 23.2%.

The State of Tipping in America

Overall, tips remained generally flat in Q4 2023 compared to Q3 2023, which is good news for restaurant employees. Total tips averaged 18.9% in Q4 2023, the same as Q3 2023. Full-service restaurant tips also remained flat at 19.4%. Quick-service restaurant tips dipped just .1% from Q3 2023 to 16%. 4

View the full report here.

Methodology:

1Methodology: Toast analyzed transactions on the Toast platform from January 1, 2023, to December 31, 2023, to determine the popularity of dishes labeled “salads, bowls, nachos, tacos, burgers, chicken tenders, roast chicken, fries, quesadillas, sandwiches, sushi, BBQ, burritos, desserts, enchiladas, pizza, cheese, omelette, pasta, wings, rice, steaks, dumplings, curry, ramen/noodles, and soups/stews.” Toast then compared the Q4 2023 average volume with the average volume for the other quarters in 2023.

2Methodology: Toast analyzed transactions on the Toast platform from January 1, 2023, to December 31, 2023, to determine the popularity of beverages containing “hard seltzer, hard cider, beer, tequila, gin, rum, vodka, wine, and whiskey.” Toast then compared the Q4 2023 average volume with the average volume for the other quarters in 2023.

3Methodology: Toast analyzed catering transactions from a cohort of restaurants on the Toast Catering & Events platform in Q4 2022 and Q4 2023. Toast used a cohort of same-store customers on the platform since Q3 2022.

4Methodology: Data from applicable restaurants on the Toast platform where a tip was added to the order via a card or digital payment from October 1, 2023, to December 31, 2023. Cash tips are not included in the analysis.