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 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 out of a single location, employs 106 workers, and generates about $14-15 million annually.
- The food service contracting industry consists of about 3,400 companies that employ about 363,900 workers and generate about $49 billion annually.
- The industry is highly concentrated; the top 20 firms account for about 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. Small companies generate less than $100 million annually.
Industry Forecast
Food Service Contractors Industry Growth

Recent Developments
Mar 13, 2023 - Bill Would Put Whole Milk Back on School Lunch Menu
- A federal bill introduced in February would allow schools participating in the National School Lunch Program to serve whole milk, Food Service Director (FSD) reports. The bill, H.R. 1147, would enable both flavored and unflavored whole milk to be served to students. Currently, the Healthy, Hunger-Free Kids Act, passed in 2010, mandates that the National School Breakfast and Lunch Programs allow schools to only serve low fat and fat free white and flavored milk. Also in February, a federal bill that would allow schools to serve flavored milk was revived in Congress. Meanwhile, the US Department of Agriculture has proposed revisions to the milk requirements in school meals, one of which would limit flavored milks to high schools. The authors of H.R. 1147 argue that a wider array of milk options could increase students’ intake.
- After a couple of volatile years, performance of the food service industry appears to have leveled off in terms of overall sales and what operators may spend in the coming years, according to Foodservice Equipment & Supplies. The National Restaurant Association projects total industry sales will hit $997 billion in 2023, a 1.1% increase in real terms from 2022. The association’s growth projections vary slightly by segment but not widely. At the low end are full-service restaurants with a 0.9% projected growth rate, while limited-service restaurants will see sales grow by 1.4%. (The umbrella category labeled “all other foodservice establishments,” which includes lodging, grocery stories and managed services, among others, is expected to grow by 1.5%.) Moreover, operators will spend $297.4 billion in 2023, per the International Foodservice Manufacturers Association 2023 Forecast. IFMA projects lodging will increase its spend by 3.1% this year.
- Plant-based meals now are the default option at 11 public hospitals operated by NYC Health + Hospitals, Food Service Director (FSD) reported in February. Between last March and the end of 2022 almost 350,000 plant-based meals had been served to patients and medical staff. Food service provider Sodexo began offering Meatless Mondays to patients in 2019 and debuted plant-based lunches by default last March. It began rolling out plant-based dinners in September, and all hospitals were on board by December, according to FSD . Sodexo credits the successful rollout to a gradual, well-coordinated education and marketing campaign to gain patient acceptance that involved chefs and dietitians, among others. Some 50% to 60% of patients have opted for plant-based dishes – which cost about 59 cents less per patient meal – and satisfaction is "well over 90%," according to Samantha Morgenstern, senior director of nutrition services for acute care at Sodexo.
- Effective January 1, 2023, foods containing sesame are subject to all US Food and Drug Administration requirements applicable to major food allergens, including labeling and manufacturing requirements, according to the agency. Sesame is the ninth most common food allergy among children and adults, according to Food Allergy Research and Education. Other major allergens include shellfish, peanuts, wheat and soybeans. In response to growing awareness of food allergies, food service providers have worked to make dining more inclusive. For example, food management company SAGE Dining in the fall debuted a new concept that is free of the 12 most common food allergens, and Stanford University has introduced allergen-free stations in each of its dining halls, FSD reports.
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