Despite Contractors’ Claims, Outsourcing School Food Programs Does Not Save School Districts Money

Diana Polson, Claire Kovach, Stephen Herzenberg |

Meeting students’ basic food and nutrition requirements is an essential role of public schools and critical to student learning. Yet, as with other support services in schools – such as transportation and janitorial services – school boards and school administrators who are worried about the bottom line may turn to outside companies to manage or replace in-house district school food programs. Already, fewer than half of Pennsylvania school districts (47%) self-operate their food service programs, down from 70% back in 2004.

As school districts develop their 2023-24 budgets, and in some cases consider outsourcing food services, they should know that the facts contradict contractors’ claims of significant school district savings. Earlier in June, we released a report with rigorous statistical analysis showing that, over the period 2004 to 2019, outsourcing school lunch programs did not benefit school districts financially. In fact, districts who switched to using a contractor saw total revenue from food services drop by $40,000 on average, compared to years they didn’t contract out. We separately examined districts in which (a) food service management is contracted out versus (b) those where the entire food services function, including staff, is outsourced.

  • Food service companies that only manage a cafeteria, and rely on district-employed staff, have higher expenditures than fully in-house programs.
  • Food service management companies that have their own cafeteria staff do have lower costs (likely because they pay lower wages and benefits). But a decline in food service revenue when districts outsource their entire food program wipes out any financial benefit to districts.

Along with crunching the numbers, we also conducted interviews with food service directors in districts that self-provide services and who are members of the Pittsburgh Regional Food Service Directors (PRFSD), a network of self-operated food service program directors. These directors reported that their network organizes bulk purchasing that achieves prices as low or lower than available to food service contractors. The network also promotes peer learning including about how to meet constantly changing nutritional requirements. Most fundamentally, these directors reported that their basic mission is serving children and public schools. By contrast, private food service companies are in business to make a profit. The additional costs required to extract a profit are one of the reasons that contracting out doesn’t benefit districts financially.

Martin Lorenzo, a member of PRFSD and food service director at Gateway in Monroeville, reflected on the benefits of being a part of a self-operated network like the PRFSD. “There is no room in school food service for profit,” he said. “Self-operated school food directors typically prioritize the nutrition and well-being of their students, without having to consider the priorities of an outside company. Any profits that we see are reinvested right back into the program so that they may yield continuous improvements that pay dividends in maintaining a fiscally solvent operation for years to come.”

Check out the full report.