Consumers are treating themselves to meals at cafeterias, sporting events and other industry-served facilities more frequently
Los Angeles, CA (PRWEB) May 22, 2013
Over the five years to 2013, IBISWorld estimates revenue for the Food Service Contractors industry to grow at a marginal average annual rate of 2.5% to $39.0 billion. After a disappointing 2009, when revenue declined due to the struggling economy, revenue climbed back up at an annualized rate of 3.7% from year-end 2009 to 2012. According to IBISWorld Industry analyst Nima Samadi, “during those years, health, correctional, educational and sports facilities outsourced their catering functions to industry firms, driving revenue growth.” Revenue is expected to increase an additional 3.0% in 2013. In 2009, the declining domestic economy and rising unemployment rate forced people to become more selective regarding how they spent their disposable incomes. 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 from year-end 2009 to 2012, leading to greater demand for food service contractors.
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,” says Samadi. 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. An anticipated growth in revenue and the expansion of some service contracts is expected to drive growth in employees and establishments. Over the five years to 2018, industry revenue is forecast to grow.
In 2013, IBISWorld estimates that the Food Service Contractors industry has a very high level of market share concentration. 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, while 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. The top four companies are Compass Group, Aramark, Sodexo, and Delaware North Companies.
For more information, visit IBISWorld’s Food Service Contractors in the US industry report 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.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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 http://www.ibisworld.com or call 1-800-330-3772.