CORRECTIONAL MARKETPLACE

Current best estimates are that there are about 2.3 million inmates on any given day in the US.

According to the Department of Justice on December 31, 2014, state and federal correctional authorities held 1,508,600 individuals sentenced to more than 1 year in prison and spent over $75 billion to keep those facilities running.   Prisons are long-term facilities run by the state or federal government.

As of June 30, 2009, the Bureau of Justice Statistics (BJS), a division of the U.S. Department of Justice found that there were an additional 767,620 detainees in local jails.  Jails are locally operated facilities that typically hold inmates for a shorter period of time than prisons.

The US Department of Justice statistics shows that, as of 2013, there were 133,000 state and federal prisoners housed in privately owned prisons in the US, constituting 8.4% of the overall US prison population.  19.1% of the federal prison population in the US is housed in private prisons and 6.8% of the state prison population is in private prisons.   Companies operating such facilities include publicly traded companies and took in over $5 billion in revenue in 2011.  Two of the biggest private prison companies in the country made $3.3 billion in annual revenue in 2012.  The two companies operated a combined 162 prisons at the end of 2012.

Texas has the most people incarcerated in any other state with 221,800 at the end of 2013 followed closely by California with 218,800 and Florida with 154,000.

Inmates can purchase snacks, clothes, cosmetics, toiletries and other items with funds they earn while working in the facilities or with money sent from people outside the facility.  In Texas alone, inmates spend about $100 million annually at the prison stores known as commissaries or canteens.  Inmates prefer to supplement the meals they are served with these items.

Inmates in Texas buy about $20 million in “chips and snacks” and another $15 million of “assorted drinks.”  Ramen noodles are a top seller with over 30 million packages sold annually in Texas facilities alone.   Items like stamps, envelopes and greeting cards are also big movers.  The ‘profits’ from these sales typically go into ‘inmate trust funds’ that are used to improve educational and recreational opportunities and purchase television equipment and other items that improve the inmates quality of life but for which taxpayers generally reject the funding.

These same Texas inmates purchased over $6.5 million in mail products, almost $6 million in grooming products, $2.8 million worth of clothing and just under $1 million of wellness products.

These numbers represent just one state’s commissary system which is items intended for resale.

National and regional foodservice companies battle it out to get to serve the institutionally prepared meals that the commissary supplements.   Every county and state bid this business out differently but the numbers here are staggering too and represent major opportunities for food companies.  The food service contract for the Florida Department of Corrections is worth approximately $145 million annually.  This is for one state and only for the facilities operated by the State of Florida.

The correctional marketplace represents a major opportunity for companies of all sizes.

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