Food Service Contractors NAICS 722310
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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
Jan 20, 2026 - New Dietary Guidelines
- The newly-released 2025–2030 Dietary Guidelines for Americans (DGA) will impact the future of school meals and trigger a new USDA rulemaking process that will reshape school nutrition standards, Food Service Director reports. While specifics are not yet defined, food service contractors should expect potential shifts around highly-processed foods, added sugar limits, and scratch‑made meal expectations. The DGA’s new emphasis on limiting processed foods raises questions about menu feasibility, labor needs, and cost structures. Added‑sugar caps, already being phased in through 2027–28, may tighten further, requiring reformulation of breakfast items, beverages, and packaged snacks. For food service contractors, 2026 will require menu planning flexibility, supply chain adjustments, and proactive engagement in the rulemaking process to manage operational and financial impacts.
- Increases in food prices are outpacing overall inflation, according to the latest Food Price Outlook report from the USDA’s Economic Research Service (ERS). While the Consumer Price Index rose 2.9% on an annual basis in August 2025, the CPI for all food increased 3.2% year over year. Broken out, the food-at-home (grocery store or supermarket food purchases) CPI increased 2.7% YoY, while the food-away-from-home (restaurant and other food service purchases) CPI rose 3.9% over the same period. In 2025, overall food prices are anticipated to rise 3%, faster than the historical average, per ERS projections. By comparison, in 2026, overall food prices are expected to increase more slowly. Prices for all food are predicted to increase 2.7% next year, while food-at-home prices are predicted to increase 2.3% and food-away-from-home prices are predicted to rise 3.3%, per the ERS report.
- 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.
- As the pace of hiring slowed this summer, employment by food service contractors shrank 2.6% in August compared to a year ago, while the average industry wage declined 1.3% over the same period to $21.14 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. Sales for the US food service contractors industry are forecast to grow at a 4.98% compounded annual rate from 2025 to 2029, faster than the growth of the overall economy, according to the latest forecast by the Interindustry Economic Research Fund.
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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