As your Townies do things, be it mining, farming, or just standing around, they get hungry. If they are not fed, their movement speed will slow down and eventually they'll starve.
Food is used to keep your Townies going at top speed. Each food item has a particular percentage value of Hunger it restores as well as a time for how long it takes to eat that Food. Food's effectiveness at eleminating Hunger ranges from Eggs (5%) to Roasts (150%)