Food Services Market In India Expected To Reach Rs 10 Lakh Cr By 2030: Report

The food services market in India, encompassing dining out and online ordering, is poised for significant growth. Currently valued at Rs Rs 5.5 lakh crore, the market is expected to expand at an annual rate of 10 per cent–12 per cent, reaching Rs 9 to 10 lakh crore by 2030. This optimistic projection is driven by an expanding customer base, increased consumption occasions, and a rise in supply.

The recent study ‘How India Eats’, released by Bain & Company and Swiggy, provides detailed insights into the Indian food services market. According to Rohit Kapoor, CEO of Food Marketplace at Swiggy, the sector has seen significant growth due to higher incomes, digitisation, improved customer experiences, and a willingness to try new experiences. Kapoor highlighted that India has considerable potential for growth, with the number of restaurants per million urban population being only a quarter of that in China.

Navneet Chahal, Partner and co-author of the report, emphasised that the food services market in India is at the cusp of a transformation. The sector’s dynamic nature, characterised by shifting consumer behaviours, digitisation, and regional diversity, offers immense growth potential. By 2030, the market is expected to serve an additional 110 million customers, making eating out a convenient lifestyle choice rather than a special event.

Online Food Delivery on the Rise
Online food delivery is projected to grow even faster, with an estimated compound annual growth rate (CAGR) of 18 per cent. By 2030, online food delivery is anticipated to contribute 20 per cent to the overall food services market, up from the current 12 per cent in 2023.

Hyperlocal Consumption Patterns
The study notes that approximately 70 per cent of food services consumption in 2023 was concentrated in the top 50 cities and among upper-middle and high-income segments. However, growth is expected from tier 2 and beyond cities as well. Gen-Z and younger cohorts, who currently comprise 40 per cent of consumption, show a higher propensity to eat out, a trend expected to grow as their purchasing power increases.

Market Projections and Growth Story
The addressable customer base for the Indian food services market is expected to grow from 320–340 million to approximately 430–450 million by 2030. This growth will be supported by rapid urbanisation and rising affluence. Eating out is anticipated to increase from an average of 5 times per month to 7–8 times by 2030, signalling a shift from special occasions to a matter of convenience.

Online Food Delivery Trends
Online food delivery has seen significant growth, with penetration rising from 8 per cent in 2019 to 12 per cent in 2023. This trend was accelerated by the COVID-19 pandemic, but there remains significant growth potential when compared to the US and China, which have double the penetration rates of India. Online food delivery is estimated to grow at 18 per cent annually, with market penetration increasing to around 20 per cent.

Future of Convenience-led Formats
The study indicates faster growth in convenience-led formats such as Quick Service Restaurants (QSRs) and cloud kitchens, which are expected to grow 40 per cent faster than the overall market from 2023 to 2030.

Key Trends Impacting 'Eating Out' in India
The Indian 'eating out' landscape is undergoing significant transformation, driven by trends such as 'Self-love', 'Experience Upgrade', 'Digitization', and 'Glocalization'. These trends are poised to reshape the industry dynamics profoundly.

The Indian food services market is set for a dynamic transformation, with both traditional dining and online delivery platforms experiencing substantial growth. The future looks promising as the market adapts to new consumer behaviours and technological advancements.