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Indian food services market projected to hit $144-152 bn by 2030: Report

Consumers in metro and Tier-I cities are increasingly opting to order in and dine out, driven by convenience and a desire for a break from routine

Food market

Peerzada Abrar Bengaluru

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The Indian food services market, valued at $80 billion in 2024, is expected to grow to $144-152 billion by 2030, according to Redseer Strategy Consultants’ new report, The Big Bite: Scaling Success in India’s Food Services. The projections indicate a compound annual growth rate (CAGR) of 10-11 per cent through 2030.
 
The report highlights how multi-brand companies and cloud kitchens are well-positioned to capitalise on this opportunity. They have disrupted traditional dining models, offering scalability and flexibility to adapt to the different needs of various demographics.
 
"The plug-and-play model of cloud kitchens facilitates scalability, with new brands reaching Rs 100 crore in revenue in as little as two to three years, significantly faster than the six to ten years typically taken by dine-in-focused brands,” said Rohan Agarwal, partner, Redseer Strategy Consultants. “By reducing the time and investment required to scale, cloud kitchens empower businesses to unlock higher margins while staying flexible and efficient in a competitive landscape. It is imperative that businesses focus on agility, operational excellence, and innovation to succeed and lead the next wave of growth in this exciting sector,” added Agarwal.
   
The report said the organised food services market, currently constituting half of the overall sector, is outpacing the unorganised segment. This is driven by online food delivery and brand influx. 
 
Consumers in metro and Tier-I cities are increasingly opting to order in and dine out, driven by convenience and a desire for a break from routine. Additionally, outside meals are increasingly viewed as a social activity, offering opportunities to spend quality time with loved ones and celebrate various occasions. Social media, pop culture, and the demand for variety have fuelled the rise of niche cuisines, contributing to the increasing frequency of eating out.
 
Rise of cloud kitchens
 
The report said multi-brand strategies have proven to be a winning formula. This is enabling businesses to diversify portfolios, mitigate risks, and scale efficiently across various customer segments and meal slots. Globally, multi-brand companies are increasingly leveraging acquisitions to broaden their offerings and cater to a wider audience across different meal slots.
 
Among multi-brand companies, the cloud kitchen model is giving tough competition to dine-in setups. This is resulting in higher revenue per kitchen and optimising shared resources. It is also enabling brands to scale two to three times faster than traditional restaurant models.
 
The report said cloud kitchens grow faster and operate more efficiently by utilising shared kitchen spaces that significantly reduce capital expenditure (capex) and overhead costs. This centralised approach enables companies to optimise production, ensure consistent quality across multiple brands, and allow higher adaptability to market demands. It also facilitates the launch and scaling of new brands. These cloud kitchens provide a cost-effective and agile growth platform for brands in the food service industry.
 
Challenges
 
While traditional single-brand models are experiencing growth plateaus as customers demand more variety and unique experiences, the report reveals that multi-brand players, driven by acquisitions, collaborations, and innovative cloud kitchen models, are uniquely positioned to capture a larger market share.
 
Notably, only 1-2 per cent of companies in India have scaled beyond Rs 500 crore, with most of this success driven by the multi-brand approach. However, even for these companies, rapidly expanding the number of stores alone to drive scale can lead to diminishing returns, especially as the market diversifies with new cuisines and service models, according to the report.

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First Published: Jan 30 2025 | 7:31 PM IST

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