Synopsis

India's food services market is set to reach USD 150 billion by FY31. Online food delivery will capture an increasing market share, rising to eighteen percent. Rising consumer spending and convenience fuel this market's expansion. Organized food service brands are expected to grow faster than the unorganized sector. Snacks, desserts, and beverages present attractive growth opportunities for companies.

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New Delhi [India]: India's food services market is expected to grow from around USD 90 billion in FY26 to USD 150 billion by FY31, with online food delivery continuing to gain a larger share of the market, according to a report by Redseer Consulting.

The report said the online segment's share in the food services market is projected to increase from 11 per cent in FY26 to 18 per cent by FY31, reflecting changing consumer preferences and growing adoption of food delivery platforms.

According to the report, India's food services market has already expanded significantly over the past five years. The market size increased from USD 56 billion in FY21 to around USD 90 billion in FY26, while the online share rose from 4 per cent to 11 per cent during the same period.

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It stated, "India's food services market is growing steadily, with online acting as a key accelerator, while profitability needs a playbook as new opportunities arise".

The report also added that the market continues to benefit from rising consumer spending on convenience, increasing preference for eating outside the home and the rapid growth of organised food service brands.

The report noted that consumers, particularly younger people in metro and Tier-1 cities, are increasingly choosing outside meals not only for convenience but also for social gatherings and celebrations. At the same time, higher spending on leisure and convenience is driving greater consumption of non-home-cooked food.

The report also highlighted that the organised food services segment now accounts for 45-50 per cent of the overall market and is expected to grow faster than the unorganised sector.

Despite the presence of around 1,000-1,500 organised food service companies, the report said only about 2 per cent have achieved revenues of more than Rs 500 crore, indicating significant headroom for expansion. Around 89-90 per cent of organised brands generate annual revenues below Rs 50 crore, while 7-8 per cent fall in the Rs 50 crore to Rs 500 crore category.

Online food delivery is emerging as a key growth driver for the sector. Food delivery transactions in metro cities increased from around 30 crore in FY21 to approximately 106 crore in FY26, reflecting a growing preference for ordering meals from outside.

Among various food categories, snacks, desserts and beverages are emerging as the most attractive growth opportunities for food service companies. The report said shakes, juices and cakes are among the fastest-growing categories because they are well suited for online delivery.

In the beverages segment, premium tea and coffee are the fastest-growing categories, with premium-positioned brands witnessing stronger margins and better store-level growth.