Some 120 million meals were served by private contractors in state-run nursery, primary and secondary schools during 2004, according to the British Hospitality Association's Food and Service Management Survey 2005.
And according to the Department for Education and Skills, catering in about 680 schools is now provided by contractors as part of wider private finance initiative schemes.
But figures from the Local Authority Caterers Association (LACA) show that private contractors remain in a minority, accounting for just 25% of the overall schools catering market.
Local authority in-house caterers provide some 2.5 million meals a day in nursery, primary, secondary and specialist schools across England alone, it adds, and employ about 75,000 workers.
Each meal on average costs pupils £1.45.
When it comes to private contractors, the schools market is dominated by three main players: Compass's Scolarest division, Initial Catering Services and Sodexho.
Scolarest contracts account for nearly half of the 4,529 state schools using contract caterers (out of about 23,000 schools in total) and Initial provides services to some 2,000 schools across 15 local authorities. Sodexho runs contracts for some 900 primary and secondary schools.
In 1991 contract caterers accounted for just 4.3% of the state education market but by 1996 this had shot up to 36.7%. But the trend since 2001 has been for a gradual decline in contract caterers' share of the market.
The introduction of Compulsory Competitive Tendering in the early 1990s led to a downward pressure on prices, argues LACA chairman Neil Porter. "It all became much more commercial and price-driven," he says.
That downward pressure, indirectly, has led to the biggest challenge the sector has faced for a decade and which can be summed up in two words: Jamie Oliver.
The celebrity chef's campaign to improve the quality of school meals and the amount spent on them has put the sector in the spotlight as never before, and led in March 2005 to the Government stumping up an extra £280m.
Along with the extra cash, the Government has set up a School Meals Review Panel to develop new nutritional standards.
For contract caterers, however, the sector currently provides little opportunity for growth and, perhaps now more than ever, even less scope for making money.
Indeed, when Compass in September 2004 warned that its operating profits would be down by £30m, one of the reasons given was that school meals' contracts awarded over the past couple of years had failed to deliver on their anticipated margins.
Nutrition, quality and cost are the three main issues facing the sector in the wake of the Oliver campaign.
In March 2005 a survey by the Soil Association, for example, found that 75% of primary schools were spending less than 50p per pupil on food. While some spent as much as 70p, others shelled out as little as 37p.
Sodexho and Scolarest have both now stopped bidding for contracts worth less than 55p a meal, but it is not simply a contract catering issue, stresses Bob Paine, chairman of Tricon Foodservice Consultants.
Parents and children need to be better educated about food and nutrition, and how to make wholesome food at home more appealing to youngsters so they will be more inclined to eat it in school, he says.
"But it is going to be a slow change. The most important thing is that food comes back on to the curriculum and there is more understanding about what we should be eating. There has to be an education process attached to food," he adds.
Schools, too, need to be better educated about the contract process, critically how they are specified or agreed so all sides are happy, argues LACA's Porter.
Even though the issues flagged up by Oliver have been valid, they do not reflect the situation across the country as a whole, claims Porter.
A lot of caterers, both private and public, are hugely committed to the nutritional issue and are working hard to improve matters, he adds.
While, thanks to Oliver, the message has clearly got through about what people want, it is going to have to be a collaborative effort to change things, suggests Porter.
"It is not fair if the finger is just pointed at caterers. Schools and local authorities also have an important role to play," he says.
Along with the quality of ingredients and training given, caterers will need to look closely at issues such as how food is served up and presented, argues Paine.
This might, for instance, mean working with schools that do not have a dining room to make sure there is somewhere where children can sit down to eat.
On top of this, much as elsewhere in contract catering, there are issues of skills shortages, high turnover and labour availability that need to be addressed.
But probably the biggest challenge for the future, argues Porter, is regaining trust between both sides, making it clear that caterers are pulling in the same direction as parents.
Since the Oliver furore, the take-up of school meals has declined by between 5-6%, he estimates, making the market even tougher.
"If you have a decline, it makes it much harder for the contract to remain viable. The biggest challenge now is to reverse the decline and get the positive message out there," he adds.