India’s food services market set to nearly double to ₹9 trillion by 2030: report

Mumbai: Indian’s love for dining out and ordering in is expected to grow to epic proportions in the coming years.

According to a report released by food aggregator Swiggy and Bain & Company on Wednesday, the market for eating out and ordering in is set to nearly double by the end of the decade to touch ₹9 trillion, from the current ₹5.5 trillion.

The growth is coming on the back of an expanding customer base, growing consumption occasions, and a jump in the number of new eateries in the market.

Additionally, online food delivery is expected to grow at a faster rate of 18% compound annual growth rate (CAGR), contributing 20% to the overall food services market by 2030, up from the current 8%.

Also read: In runup to Swiggy’s IPO, Baron marks up food-delivery firm’s value to $15.1 bn

“Higher incomes, digitization, improved customer experience and an inclination to try new experiences have all contributed to this growth. We are very upbeat about the growth in the coming years. For instance, China has four times the number of restaurants per million urban population, as compared to India,” said Rohit Kapoor, CEO, Food Marketplace, Swiggy.

To be sure, India’s food services market has undergone significant shifts over the past decade, with the rise of fast-food chains and the entry of online food delivery platforms.

Although the frequency of people eating out still remains low in India at about 5 times a month, the market is set to grow with a rise in disposable incomes.

A growing menu

According to the study, around 70% of the total food services consumption in the country happens across India's top 50 cities, and among upper-middle and high-income segments. These cities are expected to remain demand hotspots even in the medium term.

However, incremental growth is expected to come from other tier 2 cities and beyond as well.

Additionally, the addressable customer base for the Indian food services market is expected to expand by 110 million, growing from the current 320–340 million to approximately 430–450 million by 2030. This surge will be supported by macroeconomic tailwinds including rapid urbanization and a rise in affluence.

“Eating out is a special event for Indian consumers with an average of 5 times per month, which is expected to increase to 7–8 times by 2030,” the report noted.

Also read: Zomato launches ‘cool new’ real-time order counter, Deepinder Goyal reveals massive 250,000 orders by 11am

“This gradual shift will point to a transition in the way eating out will be perceived, moving from special occasions to a matter of convenience, with new occasions (e.g., mid-meal dayparts) and greater access (expansion of organized supply, food delivery growth). A trend that mirrors developed markets like the US and China, where eating out is convenience-led and the monthly eating out frequency is 25–30, thus indicating massive headroom to drive new occasions in India,” it added.

Dessert and coffee

The report highlights how the market for eating out has evolved over time. Online aggregators are driving the shift to home deliveries, while fine-dining chains are mushrooming across the country to cater to the demands of affluent consumers.

An interesting trend the report highlighted is the number of times and variety of cuisines customers order in a year.

Each customer, on average, orders more than three cuisines from over six restaurants on an online platform in a year, according to the report, suggesting that Indian consumers seek variety in their dining experiences across different occasions.

Swiggy's Kapoor also pointed towards the large headroom to grow on the supply side, as well as the significantly lower restaurant density versus developed markets. “China has four times the number of restaurants per million urban population, as compared to India,” said Kapoor.

This signals an opportunity to open more restaurants across the country.

A walk in the park, after food

Amid this growth, the penetration of online food delivery has risen from 8% to 12% between 2019 and 2023, representing a growth of 2.8 times in online food delivery compared to overall food services. This rise was accelerated by the pandemic.

“Driven by the higher adoption of digitization in customer journeys and greater accessibility, online food delivery is estimated to grow at approximately 18% year-on-year, reaching ₹212,000 crore ( ₹2.12 trillion) over the next seven years. Its market penetration is expected to increase from the current 12% to around 20% by 203,” the report added.

Furthermore, convenience-led formats—called quick service restaurants (QSR), coupled with cloud kitchens, are expected to grow 40% faster than the overall market between 2023 and 2030.

Also read: Zomato vs DoorDash: Homegrown food delivery platform performs better than US major

“The Indian food services market stands at the cusp of transformation. The sector’s dynamic nature, characterized by shifting consumer behaviours, digitization, and regional diversity, offers immense growth potential. As we look toward the next decade, with an estimated growth rate of 10%–12% annually, exciting opportunities loom on both the demand and supply fronts," said Navneet Chahal, partner at Bain & Company and co-author of the report.

“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,” he added.