Global Contract Catering Market - Focused Insights 2024-2029

MARKET INSIGHTS

The global contract catering market was valued at USD 215.48 billion in 2023 and is projected to reach USD 285.19 billion by 2029, growing at a CAGR of 4.78% during the forecast period. The market is growing significantly due to the rise of fresh food subscriptions, rising demand for customized food, and technology integration. The increasing collaboration between contract caterers and events & exhibition vendors and the emergence of a new age of outsourcing facilities are also leading to the growth of the market.

MARKET TRENDS & DRIVERS

Rise of Fresh Food Subscriptions

Fresh food subscription is one of the major trends in the global contract catering market. Various factors, including an increased focus on health & wellness, sustainability concerns, demand for flexibility & convenience, logistic improvements, and increased trend of customization drive this. As the businesses rise, there is a huge demand for nutritious & healthy meals. The demand for fresh food from K-12 schools is growing significantly, as there is increasing awareness about maintaining infants' and children's health with high-quality nutritional diets and its long-term impact on their physical and mental health. The B&I industries are making contracts with contract caterers to offer high-quality fresh food at breakfast and lunchtime to their employees. Contract catering companies offer subscriptions through their apps or special cards. Thus, there is a huge opportunity to offer fresh food subscriptions during office hours for lunch and after office hours for takeaway.

Technology Integration

Technology integration is a significant trend in the global contract catering market due to several factors, including enhanced customer experience, data-driven insights, improved operational efficiency, and the rise of contactless ordering, and improved operational efficiency. Some of the examples in this trend include mobile ordering & payment apps, AI-powered menu planning, self-service kiosks, automation in kitchens, food waste tracking, and inventory management systems. Due to internet penetration, digitization across various sectors has boomed in the last few years. Contract catering companies are adopting various possible ways of digitization to grow their business by gaining customer bases and expanding activities across Europe. For taking online contract catering orders and maintaining the data and scheduling of orders, the contract catering companies have started adopting a catering management system (CMS) in their system. Several contract catering companies are offering online menu selection and pre-booking options. Due to digitalization, by just tapping the subscription card on the machine, the customer can easily pay and take their meals.

Emergence of Cloud Kitchens

The emergence of cloud kitchens is a significant driver in the global contract catering market and is driven by several factors, including scalability & flexibility, efficiency & cost-effectiveness, innovative menu options, and expanding reach. Cloud kitchens have the advantage of the ability to quickly adapt to changing demand and lower overhead costs. They can offer increased scalability and flexibility in contract catering services. Cloud kitchens have specialized and niche food concepts. Thus, they can offer a wider range of unique and exciting menu options, enhancing their value proposition. Cloud kitchens can easily expand their reach with the help of delivery services to new clients and locations. After the pandemic, the offices and industries started at full capacity. Thus, cloud kitchens have increased across the globe. The business owners understood the future opportunity of cloud kitchens in the contract catering services. Cloud kitchens are known for safety & hygienic services, and there is no need for a waiter or any staff. Thus, they offer food at low prices and can take bulk orders. Food services & restaurants are collaborating with such cloud kitchens, which offer high-quality food to the customer without disturbing their existing kitchen system.

INDUSTRY RESTRAINTS

Rising Preference for Street Food and Grab 'N' Go Outlets

Rising preference for street food and Grab 'N' Go outlets is a major challenge in the global contract catering market. This is due to several factors, including competition for consumer spending, shifting dining habits, perception of value, and changing consumer expectations. Street food and grab-and-go outlets offer affordable, diverse, and convenient food options. This directly competes with traditional contract catering services in various sectors like events or corporate catering, where attendees have more choices. The street food vendors and grab-and-go outlets often offer customized options, flexibility, and unique culinary experience. This may put pressure on contract caterers to adapt and innovate menus. Due to the hybrid work models, people's habits have changed, and many people prefer convenient and quick options. It may hinder the market growth during the forecast period.

SEGMENTATION INSIGHTS

INSIGHTS BY INDUSTRY

The global contract catering market by industry is segmented into business & industries, education, healthcare & senior care, and others. The business & industry segment holds the largest market share in 2023. Several factors, including a rising focus on employee well-being, cost-effectiveness, and time constraints, drive the growth. B&I segment catering includes executive dining and cafeterias, as well as on-site coffee shops and vending machines. With the rising productivity and satisfaction needs in businesses and industries, the vendors are offering diverse menus to cater to different dietary needs in this segment. Companies recognize the advantage of offering appealing and nutritious food options, which increases the demand for contract catering services.

INSIGHTS BY CONTRACT

The global contract catering market by contract is categorized into fixed-price, cost-plus, and other segments. Other segment, which includes nil subsidy contract, concession contracts, and royalty contracts, showcases highet growth during the forecast period. The nil subsidy contract can be useful for cloud kitchen-based contract catering vendors as they can offer the food at their convenience. There is fluctuation in the price of the ingredients and raw materials required to make food. Due to the nil subsidy contract, the vendors can decide the cost of the food. The caterers can decide the gross profit based on the customer's spending on the food items. Such contracts are beneficial for construction sites, industrial areas, etc. It is expected to drive the demand for nil subsidy contract services in the construction sector and industries during the forecast period. In concession and royalty contracts, the caterer gives a percentage return to the clients. A concession contract is applicable for high street or retail, and a royalty contract is much more useful in large turnover operations.

INSIGHTS BY DELIVERY

Based on the delivery, the integrated facility management IFM accounted for the largest global contract catering market share. IFM is preferable for large organizations, such as those in the IT sector, manufacturing companies, etc. Maintaining employee experience with many suppliers for facility management is quite difficult for such organizations. Thus, there is a huge demand for IFM services from many businesses. The demand for exhibitions, conferences, trade shows, sports events, etc., is increasing significantly across the globe. Thus, the contract catering companies are offering IFM services to reduce conflict in facility management, including food services, cleaning, security, and other services. Thus, there is significant demand for contract catering services across the globe during the forecast period.

INSIGHTS BY FACILITY

Based on the facility, the on-premise segment dominates and has the largest global contract catering market share. On-premises caterers operate and cook the food at the venue. It is suitable for big organizations where a large volume of food is required. This segment is driven by various benefits such as customization, convenience, freshness & quality control, and cost-effectiveness. Its critical applications are educational institutions, corporate offices, business settings, healthcare facilities, Defence, and government establishments. In on-premises contract catering, the caterers can serve fresh food, as no transportation is required. Even the caterer can save transportation expenses and offer contract catering services at a lower price. The caterer can maintain the quality of the dietary needs of the consumer. The operations can be tailored to the specific requirements and preferences of clients.

GEOGRAPHICAL INSIGHTS

In 2023, APAC accounted for the largest share of the global contract catering market. Rapid economic growth in many APAC countries and rising urbanization are driving the number of education institutions, businesses, healthcare facilities, and other catering services requirements. Evolving dietary preferences and busy lifestyles are fueling demand for healthy and convenient food options. Many governments are promoting and taking initiatives to promote hygiene and food safety. The thriving hospitality and tourism industry in this region is driving the demand for contract catering services in resorts, restaurants, hotels, and other tourist destinations.

COMPETITIVE LANDSCAPE

The global contract catering market report consists of exclusive data on 70 vendors. Companies in this market are continuously focusing on acquisitions, partnerships, and mergers to expand their market reach. The year-on-year acquisitions in this market are rising significantly. Some of the vendors, such as Aramark Services, Avolta, Compass Group, Delaware North, Elior Group, ISS A/S, OCS Group Holdings Ltd., Ojaco S.à R.L., Sodexo, and Westbury Street Holdings, are the dominant players in the global contract catering market. They hold a significant market share. They are offering wider services across the globe. The market is witnessing increasing competition, driven by several factors, including growing consumer awareness of wellness & health, technological advancements, and outsourcing food services.