Food services market in India to reach Rs 10 lakh crore by 2030: Report

Food services market in India: The food services market in India is projected to reach Rs 10 lakh crore by 2030, with the addressable customer base expected to expand to 45 crore, according to a report.

The report, titled "How India Eats" by Bain & Company and Swiggy, states that the online food delivery segment is anticipated to grow at an 18 per cent compound annual growth rate (CAGR), with penetration rising from 12 per cent in 2023 to 20 per cent by 2030.

Currently valued at Rs 5.5 lakh crore, the food services market in India, which includes dining out and ordering in, is expected to grow at 10 to 12 per cent annually over the next seven years, reaching Rs 9 lakh crore to Rs 10 lakh crore by 2030.

"This growth trajectory will be driven by robust fundamentals, including an expanding customer base, growing consumption occasions, and a rise in supply. Additionally, online food delivery is expected to grow faster at around 18 per cent CAGR, contributing 20 per cent to the overall food services market by 2030," the report stated.

Swiggy Food Marketplace CEO Rohit Kapoor noted that the Indian food services market, especially food delivery, has experienced significant growth in recent years.

"Higher incomes, digitisation, improved customer experience, and an inclination to try new experiences have all contributed to this growth," Kapoor added.

Optimistic about future growth, Kapoor mentioned that China has four times the number of restaurants per million urban population compared to India, indicating significant potential for expansion.

Bain & Company Partner and co-author of the report Navneet Chahal highlighted that the Indian food services market is on the verge of transformation. The sector's dynamic nature, characterised by shifting consumer behaviours, digitisation, and regional diversity, offers substantial growth potential.

"As we look toward the next decade, with an estimated growth rate of 10 to 12 per cent annually, exciting opportunities loom on both the demand and supply fronts. By 2030, the market is poised to serve an additional 110 million customers, gradually shifting eating out from a special event to a convenient lifestyle," Chahal said.

The addressable customer base for the Indian food services market is expected to grow by 11 crore, increasing from the current 32 to 34 crore to approximately 43 to 45 crore by 2030.

"This surge will be supported by macroeconomic tailwinds, including rapid urbanisation and a rise in affluence," the report indicated.

As of 2023, approximately 70 per cent of food services consumption is concentrated in the top 50 cities and among upper-middle and high-income segments, which are expected to remain demand hotspots in the medium term. However, incremental growth is anticipated from tier 2 and beyond cities as well.

The online food delivery segment has steadily increased, with penetration rising from 8 per cent to 12 per cent between 2019 and 2023, representing a 2.8 times growth in online food delivery compared to overall food services, the report noted.

"This rise was accelerated by the Covid pandemic. Nevertheless, there remains significant growth potential when compared to markets like the US and China, which have double the penetration rates of India," the report added.

(With PTI inputs)