Online delivery to make up 20% of food services market by FY31: Swiggy, Bain & Co report
An increase in eating out frequency, higher purchasing power and a growing customer base will drive the Indian food services market, according to a study by Swiggy and Bain & Company.
The Indian food services market is expected to reach a size of Rs 10 lakh crore by 2030, with online food delivery accounting for more than one-fifth of it, according to a study by Swiggy and Bain & Company.
The food service market, which includes both ordering in and dining out, is expected to grow at a compound annual growth rate (CAGR) of 10-12% driven by expanding customer base, growing consumption occasions and a rise in supply.
Market penetration for online food delivery is expected to grow to 20% by 2030 from the current 12% while the entire segment will reach Rs 2.12 lakh crore in the next seven years.
The addressable customer base is expected to grow and reach 45 crore by 2030 on account of urbanisation and rising affluence, according to the ‘How India Eats’ study by Bain & Company and Swiggy.
“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,” noted Rohit Kapoor, CEO of Food Marketplace at Swiggy.
The report highlighted changing eating trends, where eating out goes from a special event to a “convenient lifestyle” and the sector is set for buoyant growth backed by "shifting consumer behaviours, digitisation, and regional diversity, offers immense growth potential.”
“Eating out is a special event for Indian consumers with an average of five times per month, which is expected to increase to 7-8 times by 2030,” said the report.
The report also pointed out that 70% of food service demand is concentrated in the top 50 cities and around upper-middle and high-income segments. This segment is expected to continue bringing in demand in the medium term, along with incremental growth expected from Tier II and beyond cities as well.
Moreover, GenZ and younger groups comprise 40% of the consumption group and have a higher propensity to eat out. This trend is expected to grow further as their purchasing capacity grows, the report added.
Swiggy and Bain & Company's report noted a rise in culinary variety expectations by Indian users, as customers on average order more than three cuisines from over six restaurants on an online platform over a year.
Edited by Jyoti Narayan