How does the school lunch program work?

now i know that the government gives money to the states to use towards education....is there a percentage of that allotted towards food? once the schools get the money is the individuals schools that purchase the food or do THEY HAVE GET IT FROM CERTAIN VENDOR/DISTRIBUTORS? Also do the schools take into account the demographics of the area and the students overall needs Ex: lets say a prominently Muslim, Jewish, Hindu, Buddhists communities.