India’s food services market size will grow to $125 billion by 2030, with the organised segment growing at 2x that of the unorganised segment, said foodtech giant Swiggy in its annual report titled “How India Eats” in partnership with Kearney. This market is currently pegged at $78 billion with the unorganised players having more than 50% share.
The organised segment, according to the report, will drive over 60% of the overall growth in food services, overtaking the unorganised segment.
It added that food services present massive headroom for growth with a contribution of 1.9% to GDP in India as against 5% in China and 6% in Brazil. Rising incomes, digital adoption and growing appetite for convenience will comprise the macro story behind this growth.
“In a span of just over a decade, the industry has seen disproportionate evolution. Expectations on speed are being shaped by quick commerce; for instance, our 10-minute food delivery service Bolt contributes over 10% of platform orders,” said Rohit Kapoor, CEO at Swiggy Food Marketplace.
Rajat Tuli, Partner, F&B Lead, QSR Asia Lead at Kearney, said that growth is no longer concentrated in a few metros and dining-out growth beyond the top eight cities is 2x that of the top eight cities, with corporate, industrial, education and tourist hubs leading the charge.
“The next wave of leadership in food services will come from players who understand these new markets and consumers. Additionally, in food delivery, packaging innovation will substitute for format in dining-out,” added Tuli.
The report also highlighted unique trends in the food service market. For example, late-night meals are growing 3x that of dinner, with pizzas, cakes and soft drinks seeing the highest growth in consumption beyond 11 PM. Healthy and better-for-you meals are growing at 2.3x of overall orders, focused on increasing protein intake, watching calories and cutting down on added sugar.
The report also points to how India is seeing exciting frontiers of growth in food services by rediscovering its hyper-regional cuisines like Goan, Bihari and Pahari, which are growing at 2-8x of mainstream cuisines.
Korean, Vietnamese and Mexican cuisines are becoming mainstream with growth indices of 17x, 6x and 3.7x. Even Peruvian and Ethiopian food have made their debut. Boba tea and matcha tea have seen an 11x and 4x surge in search volumes, respectively, in the last five years.
To effectively address these trends, food services players will need to balance multiple priorities and deliver, focusing on speed, affordability and experience. The report estimates that restaurants are spending 75%+ of their marketing budgets on digital channels especially to tap younger consumers.
“On one hand, consumers are demanding affordability in familiar cuisines like Indian and Italian, and on the other hand, adopting matcha and boba tea like never before. And our restaurant partners are keeping pace, with QSRs and cloud kitchens projected to grow at a CAGR of 17%+, nearly 1.5x of organised food services growth,” said Kapoor.