Food Service Contractors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation 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 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 about 82% 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.
Industry size & Structure
The average food service contractor operates multiple locations, employs 156 workers, and generates about $13.8 million annually.
- The food service contracting industry comprises about 3,400 companies, employs about 531,000 workers, and generates about $47 billion annually.
- The industry is highly concentrated; the top 20 firms account for 82% 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
Food Service Contractors Industry Growth
Recent Developments
Mar 20, 2025 - Banning Additives From School Meals
- Legislators in Florida and Utah have introduced bills that would ban certain food additives in school meals, Food Service Director reports. If passed, Florida’s SB 1826 would ban potassium bromate, propylparaben, titanium dioxide, and yellow dye No. 5 from being served in school food and would go into effect at the start of July. Utah’s HB 402 would also 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.”
- New York’s governor wants to bring universal free school meals to the nation’s fourth-most-populous state, Food Service Director reports. Governor Kathy Hochul announced the initiative during her State of the State address in January. If enacted, it would provide free breakfast and lunch each day at school to the more than 2.7 million students in the state and NY would join California, Maine, Massachusetts and a handful of states and cities that already provide universal free school meals or are looking to do so. Hochul’s action is part of her efforts to make the NY state more affordable. New York City, the largest school district in the nation, already offers free meals to students. Oklahoma is also looking to expand access to universal free school meals, according to FSD.
- Food waste is a growing global crisis and problem for commercial food service operators, QSR reports, noting that the US alone generates 63 million tons of wasted food annually, with the vast majority of it ending up in landfills. One remedy for the food waste crisis is anaerobic digestion (AD), a technology that presents restaurants and food service operators with an opportunity to handle wasted food sustainably and cost effectively, while helping them to comply with organic waste regulations. AD is a natural process in which bacteria break down organic matter in the absence of oxygen. It begins with mechanically removing plastics and packaging – like clamshells and produce stickers – to produce a liquid slurry that’s then fed into a digester where energy is captured, and nutrients are extracted for reuse. The water used in this process can be repurposed for irrigation or treated to return safely to the environment.
- Employment by food service contractors rose 0.9% in January compared to a year ago, while the average industry wage fell 2.1% over the same period to $20.60 per hour, according to the latest US Bureau of Labor Statistics data. Average wages at food service contractors – historically a low-paying field – rose 33% between June 2021 and June 2024, to peak at $22.33 per hour. Average industry wages have retreated as wage inflation has cooled.
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