Global catering companies are experiencing increased growth as more hospitals, schools, and businesses outsource food and facilities services for the first time. This emerging trend is expanding the market beyond the traditional competition for existing contracts, driven by rising food prices, labor challenges, and operational complexities.

Compass Group, the industry leader, reported on Tuesday that approximately half of its new contracts in the six months ending in March came from organizations adopting outsourcing for the first time. This figure has risen from 45 percent three years earlier, indicating a notable uptick in first-time outsourcing. The company attributed this growth partly to inflationary pressures, as well as to more demanding client expectations and the increasing complexity of managing food services.

Outsourcing providers are able to leverage their size to negotiate better prices, optimize supply chains, and use data analysis to adjust menus and purchasing strategies more efficiently than many in-house food operations. Morningstar analyst Ben Slupecki noted that while these advantages are always present, they become particularly significant during periods of rapid price increases.

Other major players in the sector are witnessing similar developments. Thierry Delaporte, Chief Executive of Sodexo, stated last week that about half of the French company’s new contracts come from first-time outsourcing clients, reflecting a global trend in the industry. American company Aramark also reported that opportunities for first-time outsourcing are currently higher than historical averages.

Healthcare and education sectors are seen as key areas for future expansion due to relatively low levels of existing outsourcing compared with more mature markets such as corporate offices and sports venues. A Sodexo spokesperson indicated that these segments are expected to be the fastest-growing within the company. Compass has also highlighted healthcare and education as significant sources of first-time outsourcing growth in its recent investor communications. Delaporte further emphasized the scale of the opportunity in the U.S. education market during a recent investor presentation.

This increased adoption of outsourcing offers a medium-term growth avenue for leading caterers by bringing new clients to the market rather than intensifying competition for current ones. Despite their prominence, the four largest global catering firms—Compass, Sodexo, Aramark, and Elior—still control less than 30 percent of the worldwide contract catering market, according to industry analysts.