Food Service Contractors NAICS 722310

        Food Service Contractors

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Industry Summary

The 3,500 food service contractors in the US provide food and beverage services to institutional, governmental, commercial, or industrial locations on a contract basis. Companies typically serve customers under long-term contracts, although some provide catering services for one-time events. Key customer segments include colleges, hospitals, long-term care facilities, schools, business and industrial (B&I), correctional facilities, recreational facilities, and military facilities. The industry is highly concentrated; the top 20 firms account for nearly 80% of industry sales.

Variable Costs

Food service contractors are vulnerable to variations in input costs, particularly food and labor expenses.

Sustainability

Food service providers are embracing environmental responsibility through a variety of methods, including local sourcing and waste reduction programs.


Recent Developments

Sep 20, 2025 - California to Ban UPFs in Schools
  • California lawmakers have passed a bill that seeks to identify and ban certain ultra-processed foods (UPFs) in school meals, Food Service Director reports. The bill (AB-1264: Pupil nutrition) would direct the California Office of Environmental Health Hazard Assessment to define UPFs and identify which ones are particularly harmful to children’s health. Once identified, schools would be required to begin phasing out those UPFs from their nutrition programs by July 1, 2029 and would have until July 1, 2035 to eliminate them. Beginning July 1, 2032, the bill would prohibit a vendor from offering restricted school foods and ultra-processed foods of concern to a school. The legislation Governor Newsom’s signature. Earlier this year, he signed a law banning certain food dyes from school meals beginning December 31, 2027. Other states, including West Virginia and Virginia, have also introduced and passed similar legislation.
  • A nationwide coalition of farmers, school superintendents, nutritionists, child advocates, and many others, is pushing back against the elimination of 2025 funding for the farm-to-school program, which supplied locally-grown produce and other local ingredients to school meal programs, Food Service Director reports. In a letter to House Speaker Mike Johnson and lawmakers the group urged the USDA to reinstate federal funding for the Local Food for Schools (LFS) program (established by the Biden administration) and the Patrick Leahy Farm to School Program. In March, the USDA terminated some $660 million in funding that helped bring local food to schools and child care programs. Critics of the cuts argue they hurt children and farmers. In April, a group of lawmakers petitioned Secretary of Agriculture Brooke Rollins to reinstate USDA funding the Patrick Leahy Farm to School grant program, established in 2014.
  • Legislators in Utah introduced a bill that would ban certain food additives in school meals, Food Service Director reports. A similar bill in Florida (SB 1826) that would have banned potassium bromate, propylparaben, titanium dioxide, and yellow dye No. 5 from being served in school food died in committee. Utah’s HB 402 would prohibit certain additives and ultra-processed foods from being served in school meals, including potassium bromate, and red dye No. 3. Florida and Utah are the latest states to act to eliminate certain additives from school menus. Arizona, New York, and Texas all have introduced bills that would ban dyes and other additives. Overhauling school programs is a focus of Health and Human Services Secretary RFK Jr.’s Make America Healthy Again Commission. Referring to school lunches, he tweeted “We shouldn’t be subsidizing people to eat poison.”
  • As the pace of hiring slowed this summer, employment by food service contractors dipped 0.5% in July compared to a year ago, while the average industry wage was flat over the same period at $22.01 per hour, according to the latest US Bureau of Labor Statistics data. Average wages at food service contractors – historically a low-paying field – peaked in mid-2024 at $22.33 per hour and are up 22% over the past three years. Notably, average industry wages have been trending upward since March.

Industry Revenue

Food Service Contractors


Industry Structure

Industry size & Structure

The average food service contractor operates multiple locations, employs 160 workers, and generates about $13.5 million annually.

    • The food service contracting industry comprises about 3,500 companies, employs about 559,900 workers, and generates about $47.2 billion annually.
    • The industry is highly concentrated; the top 20 firms account for about 80% of industry sales.
    • Large companies include Compass Group, Sodexo, and Aramark. Some large companies are owned by foreign corporations, have global operations, and generate revenue in the billions of dollars. Medium-size companies generate between $100 million and $1 billion annually, while small companies generate less than $100 million annually.

                                      Industry Forecast

                                      Industry Forecast
                                      Food Service Contractors Industry Growth
                                      Source: Vertical IQ and Inforum

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