Food Service Contractors

Report Page Length: 10-12
Last Quarterly Update: 11/2/2009
SIC Codes: 5812
NAICS Codes: 722310
Chapters Include:
Industry Overview Trends & Challenges Industry Forecast
Quarterly Industry Update Call Prep Questions Website & Media Links
Business Challenges Financial Information Glossary & Acronyms
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Industry Profile Excerpt

The food service contracting industry includes about 21,000 companies with combined annual revenue of $23 billion. Major companies include ARAMARK, Compass Group USA, Delaware North, and Sodexo, Inc. The industry is highly concentrated: the 50 largest companies account for about 90 percent of revenue.

Food service contractors provide cafeteria and restaurant services to businesses, government agencies, and institutions. Food distributors, which supply food to food service contractors as well as to grocery stores and restaurants, are covered in a separate industry profile.

COMPETITIVE LANDSCAPE

Demand is driven by employment trends and consumer tastes. The profitability of individual companies depends on efficient operations and food quality. Large companies have advantages in economies of scale in food and equipment purchasing, off-site food preparation, and distribution. Small companies can compete effectively by specializing in unique food products or local markets. The industry is labor-intensive: average annual revenue per worker is only $50,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products are meals consumed on-premises (65 percent of revenue) and take-out food (30 percent). Other products include alcoholic drinks and grocery food items. Meals can vary depending on the setting and client, but typically focus on breakfast, lunch, and dinner standards. Food includes pizza, Mexican and Asian cuisine, sandwiches, salad bars, chicken, and hamburgers. Beverages include soft drinks, tea, coffee, bottled water, and juice.

Food service contractors prepare and serve meals cafeteria-style; in bulk quantity to students, hospital patients, and prisoners; and in fast-casual ...

 
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