The Indian food services industry is on the brink of tremendous growth and is headed towards a massive boost in the next few years. As per a recent report by Swiggy and Bain & Company, the industry is set to register ₹9-10 trillion by 2030. At present, the industry is valued at ₹5.5 trillion.
The report titled “”How India Eats” outlines the reasons for its surge, steered by technology integration, changing consumer behaviour, and rapid urbanization. The food services industry in India comprises two critical segments – dining out and food delivery. Interestingly, both these segments are undergoing remarkable evolution, all thanks to a blend of increasing disposable incomes, the influence of digitization, and a transition toward convenience-led dining.
According to the latest report, the industry is predicted to take giant growth leaps, registering 10-12% annual growth for the next seven years. This continued growth trajectory cements India’s position as a significant player in the global food services market, with a total market size potentially hitting the ₹9-10 trillion milestone by 2030.
Online food delivery has become the driving force of this growth, pushing the sector towards a fast track of growth. It is noteworthy that between 2019 and 2023, online food delivery services have penetrated the market. By registering 2.8 times the growth, online food delivery held a 12% market share in 2023 compared to 8% in 2019.
The COVID-19 pandemic, when India came to a standstill, significantly increased this sector’s upward momentum. During this period, many consumers explored and turned to food delivery options during lockdowns.
Tier 2 Cities to Drive Growth in India’s Food Delivery Market
According to the industry report, the online food delivery market will continue expanding at an impressive yearly growth rate of 18% to reach ₹2.1 trillion by 2030. At the same time, market penetration is expected to rise to 20%, reflecting the growing appetite for convenience among Indian consumers.
At present, India’s food services market is condensed around the country’s top 50 cities, which account for 70% of the total consumption. Home to the upper-middle and high-income groups, these cities will continue to exhibit a clear dominance in the near future as well.
However, the exciting fact to note here is the report’s emphasis on the tier 2 cities, which will play a pivotal role in the growth of this segment. The flourishing population with rising assets in tier 2 cities will be responsible for creating substantial expansion opportunities.
India has hundreds of cities with a population of more than one million and characteristics of larger metros, exhibiting a growth of assets and a fascination with contemporary comforts. Together, these factors will boost food delivery services, which will, in turn, propel the unconventional growth of the sector in the country. Food delivery aggregators such as Swiggy, Zomato, and Uber Eats will thrive in this flourishing atmosphere.
Microeconomic factors like rapid urbanization and increasing disposable income are two core factors that will actively contribute to this growth. The report further outlines that by 2030, the active consumer base for the Indian food services market is anticipated to grow by 110 million people, jumping from 320-340 million to approximately 430-450 million. The ever-increasing consumer base will take the market forward, converting dining out and food delivery from periodic luxuries into regular lifestyle choices.
Gen Z and Millennials Fuel India’s Growing Dining-out Culture
India’s younger population, especially Gen Z and millennials, is the pivot of this gigantic evolution of the food services industry. At present, the share of this group in food consumption is 40%. Interestingly, this group is open to exploring different cuisines and experiencing different dining
options, and they strongly tend to eat out regularly. Once their purchasing power increases, this group will exhibit an accelerated tendency to eat out, driving the sector to new heights.
As per the report, Indian consumers dine out about five times a month on average. However, this number is predicted to increase to 7-8 times per month by 2030. The fascination with dining out can be attributed to several factors, including emerging trends such as mid-day snacks and late-night meals—the presence of organized restaurant chains across the country is another reason for this growing trend. These shifts in eating preferences reflect the common trends among developed nations like the United States and China, where dining out is a standard practice. In the United States and China, on average, consumers visit restaurants to eat about 25-30 times per month.
Another interesting fact that has come to the fore with this report is the adventurous nature of Indian consumers. Indian consumers are becoming more experimental than ever in their culinary choices. The report captured this essence and highlighted that an average customer orders food online and selects from over six restaurants. At the same time, the same customer tries more than three distinct cuisines each year. The willingness to explore new food items and experience different palettes reflects the diverse tastes of Indian consumers, who do not shy away from enjoying a wide range of local and global flavours.
Regional Flavours Backed by Tech Integration
The report also highlights the lasting effect of regional tastes on India’s food consumption patterns, with each city exhibiting distinctive choices for distinct dishes and cuisines. For example, in Mumbai, the most popular dishes ordered online are dal khichdi and Margherita pizza. However, when it comes to Delhi, most consumers prefer McAloo Tikki burgers and Pizza McPuff. In Bengaluru, masala dosa and chicken biryani rule the food delivery scenario, while Kolkata showers its love on biryani—both chicken and mutton.
This diverse range of culinary delicacies underlines the massive opportunity for food delivery platforms to cater to localized flavours and offer consumers the prospect of exploring new cuisines. Mushrooming restaurants and cloud kitchens provide options to consumers and will continue to expand, further pushing the growth of this industry.
Adopting digital platforms is a game changer for India’s food services sector. Platforms like Swiggy and Zomato have altered the habits of Indians ordering food, making it easier than ever to enjoy a broad spectrum of dishes from the comfort of home. AI integration and AI-driven features, like personalized suggestions and real-time delivery tracking, have boosted the prevalent customer experience, facilitating more people’s adoption of online food delivery as a convenient and reliable option.
Technology has also significantly boosted the functional efficiency of restaurants and cloud kitchens, encouraging them to scale up quickly and meet increasing demand.
With the persistent advancement of digital solutions, the food services industry is predicted to become even more efficient, propelling profitability and further expansion. The food services market is headed for sustained growth over the next decade, with dining out and food delivery playing critical roles.
What’s in Hold for Convenience-driven Setups?
Convenience-driven setups like quick service restaurants (QSRs) and cloud kitchens are predicted to grow 40% faster than the prevailing market. By 2030, online food delivery is anticipated to become a mainstream alternative for millions of Indian customers, altering eating out from a periodic pleasure into a standard part of daily life.
It is fair to suggest that the Indian food services market is on track, steered for incredible growth, driven by redirecting consumer preferences, increasing affluence, and technological advancements.
As the market expands within India’s top cities and smaller urban centres, the country is poised to become a global leader in food services, offering enormous opportunities for businesses and investors.
With the market developing across India’s main cities and smaller towns, the country is positioned to become a global leader in the food services industry, offering significant prospects for businesses and investors.
Co-founder of Corpbiz, Narendra Kumar, said, “Our brand Corpbiz is working as a startup accelerator platform for business ventures. We have empowered the vision of thousands of entrepreneurs all over India, and we are willing to do so with a proactive approach. We are impressed by the potential that the Indian food services market holds, and we expect more business enthusiasts to come ahead and kickstart their food ventures. We will help them get their food business registered and also assist them with FSSAI registration to build their business credibility. We have helped around 10,000+ foodpreneurs in securing FSSAI licenses in India.” Narendra Kumar concluded with this statement.