Contract Catering Market Size, Share, Industry, Forecast and Outlook (2024-2031)

Global Contract Catering Market is Segmented By Type (Fixed Price Contracts, Cost-Plus Contracts), By Modes of Contract (Outsourced, Self-Operated), By End User (Business and Industry, Education, Healthcare and Senior Care, Defence and Offshore, Sports and Leisure, Airports, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Contract Catering Market Overview

The Global Contract Catering Market is forecast to reach at a high CAGR during the forecast period (2024-2031). A catering contract is a service agreement between a caterer and their client which is suitable for catering services covering one or more events or hiring a regular catering service. It gives a detailed understanding of timeliness, menu, beverages, staff requirements, and payment expectations for contractors and clients. Increasing demand for food-away-from-home across the globe due to the rising millennial and working population is expected to drive the growth of the contract catering market.

Contract Catering Market Summary

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Contract Catering Market Dynamics and Trends

Increasing focus on health by consumers rise demand for contract catering

The increasing focus on wellbeing and health by several businesses, hospitals, education institutions and aged care centres is driving the growth of the contract catering market. The growing awareness of better health encourages consumers to change their eating habits. The growing popularity of home meal replacements and new food subscriptions encourages companies to launch new catering services. The increasing study of sustainability is encouraging contract caterers to align their values with their customers and help their clients achieve their sustainability objectives. These efforts to ensure an ethical supply chain and resource management will boost the development of the contract catering market.

The workplace is continuously changing to create a healthy environment for employees to spend time. Contract caterers need to try new recipes and provide healthier snacks for their customers. Many customers are concerned with fewer calories, lower sugar, less salt, and low carbs. Future contract catering can consider small food proportions that can be bought and heated up at home for a later meal or in a microwave at work for lunch.

The increasing popularity of online catering is one of the major factors driving the growth of catering services. Online catering helps consumers select food items from the prescribed menu on the website and subsequently place an order. Also, these online channels allow customers to create personal accounts to make future ordering convenient as these accounts record customers' preferences and show results based on them.       

Contract Catering Market Segmentation Analysis

Fixed price contracts segment held highest market revenue share of XX% in the year 2021

Fixed-price contracts are also known as lump sum contracts or firm price contracts. It is an agreement between seller and client that stipulates the service that will be provided and the price that will be paid for them. This is opposed to a cost-plus contract, which is intended to cover the costs incurred by the contractor plus an additional amount for profit. Fixed-price contracts may be inflexible or may stipulate circumstances under which adjustments may be made. The primary advantage of fixed-price contracts is certainty in terms of accounting. Once the contract is signed, all parties understand the products or services to be delivered or performed and the amount of money that will exchange hands.

Contract Catering Market Geographical Share

Europe is expected to dominate the global contract catering market in the year 2021

Increasing number of health-conscious people in Europe is expected to drive the contract catering market. Some of the major key players from Europe, like Elior, the third-largest catering group, announced its three-year strategic plan to boost revenue, profit growth and cash flow. The growth is attributed to the rising presence of contract caterers and their adoption of growth strategies such as providing a new venue, events solutions and mergers & acquisitions. For instance, in September 2019, CH&CO, one of the leading players in contract catering, headquartered in the U.K., launched a new venue and event solution called ‘eve.’ The combination of the company’s resources & network, venue and events are expected to help the company in gaining competitive advantages. Global companies such as Compass Group have a low presence in Europe and operate through joint ventures. For instance, Compass Group entered into a joint venture partnership with Abu Dhabi National Hotels (ADNH) in 2000, named ADNH Compass. Therefore, there is a high scope for market penetration in the Middle East & Africa region for global catering giants like Sodexho and Aramark.

After Europe, North America is expected to grow the market. North America is expected to be a lucrative region in the global contract catering market. The growth is mainly attributed to the increasing demand for contract catering from the corporate sector in North America. For instance, according to Compass Group’s annual report (2018), the corporate and industrial sector accounted for the largest revenue share of 31.0% of the total revenue generated in North America, with an operating profit of 8.1% in 2018.

Contract Catering Market Companies and Competitive Landscape

The contract catering market is fragmented due to a large number of established and regional players. Key companies, such as Compass Group, United Enterprises Co. Ltd., Elior Group, and Aramark, are prominent players. These players are focusing on increasing their production capacity to meet the global demand. In April 2021, Elior Group, the contract catering leader in France, announced the acquisition of the start-up Nestor. Elior has enhanced Nestor’s capabilities that will enable it to develop its customer portfolio and establish itself in large urban centers throughout France. Moreover, in April 2019, Elior Group announced that it had received a binding offer from PAI Partners to acquire its concession catering operations grouped within its Areas subsidiary, representing an enterprise value of €1,542 million. In the coming weeks, Elior Group will conduct the required information-consultation procedure with the Group’s employee representative bodies.

COVID-19 Impact on Contract Catering Market

Negative impact on the global contract catering market

The COVID-19 pandemic has forced the closure of many businesses and establishments, including restaurants and catering services. It has resulted in the loss of thousands of jobs. The strict government regulations, social distancing policy, and closure of restaurants and hotels negatively impacted the contract catering market. There are strict regulations on social gatherings, like marriages, only 50 people are allowed, and other social programs like Durga puja and Ganesh Chaturthi are strictly restricted to celebrating socially. Social eating is completely closed; most of the consumer-preferred cooking at home instead of participating in social gatherings. Schools, colleges and airports are closed for a certain time in Covid 19. Accordingly, catering orders are stopped from these end-users. People prefer online conferencing and arrange online meetings instead of social gatherings.