India Food Services Market to Reach Rs 10 Lakh Cr by 2030

New Delhi, Jul 3 (PTI) The food services market in India is expected to reach up to Rs 10 lakh crore by 2030 with the addressable customer base estimated to expand to up to 45 crore, according to a report.

The online food delivery segment is estimated to grow at 18 per cent CAGR (compound annual growth rate) and penetration is set to rise from 12 per cent in 2023 to 20 per cent by 2030, said the report titled 'How India Eats' by Bain & Company and Swiggy.

The food services market in India, which encompasses dining out and ordering in, is currently valued at Rs 5.5 lakh crore. The market is poised to grow at 10-?12 per cent annually over the next seven years, reaching Rs 9 lakh crore to Rs 10 lakh crore by 2030, it said.

"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 said.

Swiggy Food Marketplace CEO Rohit Kapoor said the Indian food services market, especially food delivery, has witnessed buoyant growth over the last few years.

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

Upbeat about the growth in the coming years, Kapoor said China has four times the number of restaurants per million urban population compared to India and the study highlights this headroom.

Bain & Company Partner and co-author of the report Navneet Chahal said the Indian food services market is at the cusp of transformation and the sector's dynamic nature, characterised by shifting consumer behaviours, digitisation, and regional diversity, offers immense growth potential.

"As we look toward the next decade, with an estimated growth rate of 10-12 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 into a convenient lifestyle," she said.

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

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

The study pointed out that approximately 70 per cent of food services consumption as of 2023 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 expected to come from other tier 2 and beyond cities as well," it added.

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 said.

"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," it added.