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 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.
Recent Developments
May 20, 2025 - Farm to School Funding Cut
- 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 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.
- Employment by food service contractors inched up 0.6% in March compared to a year ago, while the average industry wage fell 5.7% over the same period to $20.32 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 14.3% over the past three years. Average industry wages have retreated as wage inflation has cooled.
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 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
Industry Forecast
Food Service Contractors Industry Growth
Source: Vertical IQ and Inforum
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