The Indian food services market is expected to double to about ₹9 lakh crore to ₹10 lakh crore, growing at 10-12 per cent year-on-year over the next seven years, a report released by Swiggy and Bain & Company noted. The market is currently pegged at about ₹5-lakh crore. At the same time, the online food delivery segment is expected to grow to 2.12 lakh crore by 2030, growing at a faster clip of 18 per cent year-on-year from the current ₹66,000 crore, it added.
The growth of the food service segment will be fuelled by robust fundamentals, which include an expansion of the customer base, a higher proportion of Gen Z consumers, growth in consumption occasions, and a rise in the number of restaurants. The number of eating occasions is expected to grow to 90-95 per annum (from the current 60-65 per annum). However, India is expected to continue to be a value-conscious segment, and spends will hover around ₹230-250 per order compared to the current average order spend of ₹220-240, the report added.
Rohit Kapoor, CEO, Food Marketplace, Swiggy, pointed out that higher disposable incomes, digitisation, improved customer experience, and an inclination to try new experiences will continue to fuel the growth of the food services industry. Speaking to reporters on Wednesday, he pointed out that there is a large headroom for growth in terms of the addition of new restaurants given the lower restaurant density in India compared to developed markets. “China has four times the number of restaurants per million urban population compared to India. Markets such as Brazil, the US and the UK also have a higher number of restaurants per million urban population,” he added
Nearly 70 per cent food services consumption as of 2023 was 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, said Navneet Chahal, Partner, Bain & Company. Incremental growth is expected to come from other Tier 2 and beyond cities as well. “By 2030, the market is poised to serve an additional 110 million customers, gradually shifting eating out from special events into a convenient lifestyle,” she added.
Stating that eating out occasions are expected to increase, Kapoor added that factors such as experimentation with new cuisines, enhanced convenience, the growing influence of social media platforms, and growing trends of indulgence, among others, will fuel the growth of the sector.
“Online food delivery has steadily increased, with penetration rising from 8 per cent to 12 per cent between 2019 and 2023.There remains significant growth potential when compared to markets like the US and China, which have double the penetration rates of India. Driven by the higher adoption of digitization in customer journeys and greater accessibility, online food delivery penetration is expected to increase from the current 12 per cent to around 20 per cent by 2030,” Kapoor added.
The study also pointed out that convenience-led formats—QSRs and cloud kitchens with propositions such as quick service, simplified menus, value for money, etc. — are expected to grow 40 per cent faster than the overall market from 2023 to 2030.