Revenue for U.S. foodservice contractors industry expected to rise 4.4% in 2012 amid increase in consumer spending, research report says

Nevin Barich

Nevin Barich

Apr 4, 2012 – PRWeb

LOS ANGELES , April 4, 2012 (press release) – Over the five years to 2012, IBISWorld estimates revenue for the Food Service Contractors industry to grow at a marginal average annual rate of 0.4% to $32.6 billion. After a disappointing 2009, when revenue declined 4.3% due to the struggling economy, revenue climbed back up 1.4% in 2010 and 3.1% in 2011. During 2011, health, correctional, educational and sports facilities outsourced their catering functions to industry firms, driving revenue growth. Revenue is expected to increase an additional 4.4% in 2012. In 2009, the declining domestic economy and rising unemployment rate forced people to become more selective regarding how they spent their disposable incomes. As a result, consumer spending fell. According to IBISWorld industry analyst Nima Samadi, as people cut spending, they were less likely to spend money on nonessential activities like eating out at restaurants and cafeterias, causing demand for industry services to suffer. However, consumer spending rose in 2010 and 2011, leading to greater demand for food service contractors. Consumer spending is forecast to rise again in 2012.

The Food Service Contractors industry has a very high level of concentration. Major companies in this industry include Compass Group PLC, Aramark Corporation, Sodexo and Delaware North Companies Inc. While a small number of very large national and global trading enterprises exist, there are also a large number of small and medium-size operators. Over time, the industry's concentration has increased. Recently, Aramark merged with RMK Acquisition Corporation. Other players, such as Compass and Sodexo, have also been very active in acquisitions. The recent increase in acquisitions indicates that companies are making a concerted effort to increase profitability by claiming larger portions of market share, says Samadi.

With the economy having improved since 2010, and some recessionary fears subsiding, consumers are treating themselves to meals at cafeterias, sporting events and other industry-served facilities more frequently. This trend is expected to result in increased demand for food service contractors going forward. The outsourcing of catering services by correctional, education and healthcare (including elderly care) facilities will provide continued growth prospects for operators. Bundling food services within broader facilities-management contracts for clients will also drive growth. Over the five years to 2017, industry employment is expected to grow. During the same period, IBISWorld anticipates that the number of establishments will grow. The growth in employees and establishments will be driven by the anticipated growth in revenue and the expansion of some service contracts. Over the five years to 2017, industry revenue is forecast to grow. For more information, visit IBISWorld’s Food Service Contractors report in the US industry page.

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IBISWorld industry Report Key Topics

Industry companies provide food services at institutional, governmental, commercial or industrial locations. Examples of facilities where food services are provided include airports, food courts, college and university cafeterias and recreation and sports venues.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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