Community Food Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 3,400 community food services in the US collect, prepare, and deliver food for the needy. They include food banks, meal delivery programs, and soup kitchens. Food banks collect and distribute salvageable or donated food to individuals through other social service organizations. Meal delivery programs prepare and deliver meals to persons unable to prepare meals for themselves due to age, disability or illness. Soup kitchens prepare and serve meals at fixed or mobile locations.

Demand and Donations Dependent on Economic Conditions

Demand for community food services rises when the economy is weak and unemployment rises.

Dependence on Volunteers

Community food services are highly dependent on volunteers for many staff positions and for carrying out their work.

Industry size & Structure

The average community food service operates 1 or 2 locations, has 11-12 employees, and generates $3-4 million in annual revenue.

    • There are about 3,400 community food service organizations in the US employing 38,200 workers and generating $12.5 billion in annual revenue.
    • Nearly all community food services focus on the needs of a local market. However, they may belong to regional or national networks of food banks.
    • The largest national food bank network is Feeding America, with over 200 members.
    • In addition to dedicated community food service organizations, the US also has tens of thousands of food pantries operated by churches and other religious organizations to deliver food staples to the needy.
    • An estimated 10.5% of American households were food insecure at least some time during the year in 2020, meaning they lacked access to enough food for an active, healthy life for all household members.
                                  Industry Forecast
                                  Community Food Services Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 25, 2022 - Inflation Drives up Food Costs for Consumers, Food Banks
                                  • Demand for assistance from community food services may increase along with inflation. Prices in all food categories are expected to go up throughout the rest of 2022, according to the US Department of Agriculture. At least half of all categories will experience double-digit inflation. Food-at-home prices are expected to increase 3% to 4%.
                                  • Food banks are seeing another surge in need as pandemic assistance programs end, inflation increases, and many Americans struggle to make ends meet. Rates of reported hunger have been increasing since early August 2021, when nearly 8% of respondents said they “sometimes” or “often” did not have enough to eat, according to data from the Census Household Pulse Survey. About 10% of those polled in early February said that their household sometimes doesn’t have enough to eat. That uptick is more significant for households with children, rising to 13% although off from pandemic peaks.
                                  • About 35% of adults living in households with children said in late January and early February -- after child tax credit payments ended -- that they struggled to cover usual costs, according to census data.
                                  • Food banks offer more mobile, delivery, and drive-thru options to assist vulnerable populations and observe social distancing guidelines. Food banks experienced long lines of cars as people stayed in their vehicles to social distance and workers brought food to them. Food banks are asking for monetary donations to purchase food from distributors and commercial suppliers.
                                  • President Biden signed the $1.9 trillion American Rescue Plan Act in March 2021. The plan’s direct stimulus payments to consumers, further extensions of federal unemployment benefits, and advance child tax credit payments may have reduced the burden on community food services. Government aid programs aimed at helping Americans weather the COVID-19 pandemic cut poverty nearly in half for 2021. It reduced the proportion of people in poverty to record low levels, according to the New York Times reporting of analysis by the Urban Institute. The poverty reduction has been broad-based across ethnicities, age groups, and every US state. In mid-September, the US Census Bureau reported that the number of Americans living below the poverty line dropped from 11.8% in 2019 to 9.1% in 2020, offering further evidence that government assistance programs helped stave off poverty during the pandemic and economic downturn. However, the effects of government aid may be short-lived. Three key programs that helped put a dent in poverty - stimulus checks, supplementary federal unemployment benefits, and child tax credits – have run their course. As many as 4 million children may have fallen back into poverty in January after the child tax credit payments expired in December 2021, according to the Center on Poverty and Social Policy at Columbia University.
                                  • Congress allocated $850 million in food aid through two stimulus measures passed in March 2020. Stimulus efforts also included $3 billion for the Farmers to Families Food Box Program. The program – which was extended as part of the Consolidated Appropriations Act passed in December 2020 – aimed to help struggling farmers by paying them to provide produce, meats, and dairy products to the hungry. Citing inefficiencies and high costs, the USDA wound down the Farmers to Families Food Box program at the end of May 2021. It was replaced by a new USDA food box program that provides fresh produce through the Emergency Food Assistance Program (TEFAP) and is distributed to those in need by local food banks.
                                  • Individual communities use mapping software to help people locate food banks and provide information about hours of operation and how the food distribution process works. Such tools are helping community food aid organizations connect with people who have never used food banks before. By leveraging US Census and other data, mapping technology is also being used to pinpoint areas in a community with the greatest need for food aid. Mapping data can also help identify trends across distribution locations which can help solve complex logistics challenges like the best storage spots for various types of foods and demand cycles for different food items.
                                  • Google launched its Find Food Support search site in 2021. The site features a Google Maps tool that helps users find the nearest food bank, food pantry, or school lunch pick-up site. With input from No Kid Hungry, FoodFinder, and the USDA, Find Food Support includes 90,000 food resource locations in all 50 states. The site also has food aid hotlines, state-by-state benefit guides, and information for hard-hit communities, including military families, seniors, and families with children.
                                  • The COVID-19 pandemic resulted in a 79% increase in demand for existing food aid services, according to a recent study by anti-hunger nonprofit WhyHunger and Duke University. The study also found that more than 80% of hunger relief organizations served more first-time clients during the pandemic. More than half of food aid organizations were forced to suspend programs, including community meals and volunteer services. Organizations also struggled to implement many pandemic-related operational workarounds, including food delivery, contactless pickup, and virtual communications. The study found that the pandemic caused more food aid organizations to advocate for changes that can address the root causes of hunger, including living wages, universal school meals, and increasing Supplemental Nutrition Assistance Program (SNAP/food stamp) funding.
                                  • The Biden administration announced in August 2021 the largest permanent expansion of SNAP, or food stamps, in the program’s history, according to The New York Times. Under the expansion, which took effect in October, average benefits will increase by 25%. Expansion of SNAP is the result of legislation passed in 2018 that required the Agriculture Department to review basic program assumptions about the nutrition needed for a healthy diet. Throughout the pandemic, community food aid organizations have urged an expansion of SNAP to alleviate long-term food insecurity in the US.
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