India's food service market to reach $79.65 bn by 2028, says report
New Delhi: India's food service market is expected to reach USD 79.65 billion by 2028, growing at a CAGR of 11.19 per cent from USD 41.1 billion in 2022, according to a report.
Despite over 20 lakh jobs lost during the peak of the COVID-19 pandemic, the industry is expected to reach employment figures of 1 crore by 2025, as per the Food Service and Restaurant Business Report 2022-23, by Francorp and restaurantindia.in.
The restaurants and food service market in the country is divided into two segments with the unorganised segment accounting for the major share, the report said, adding that the organised sector also grew at a strong rate between 2014 and 2020.
"India's food service market is anticipated to project robust growth in the forecast period with an impressive CAGR of 11.19 per cent and reach USD 79.65 billion by 2028," it said.
It further said that the country's quick service restaurants (QSR) market is estimated to be USD 690.21 million in 2022 and is expected to reach USD 1069.3 million by 2027, growing at a CAGR of 9.15 per cent.
Over FY20-25, the QSR chain market is estimated to be the highest-growing sub-segment -- at 23 per cent CAGR -- in the entire food service market, not just the chain market.
This will be on the back of large food service chains such as McDonald's, Burger King, and Domino's, among others, deepening their reach in India's smaller cities and benefiting from a younger demographic.
The report pointed out that the annual spending of middle class households on fast food restaurants in India's Tier II and III cities has grown by 108 per cent in the last two years, from Rs 2,500 to Rs 5,400.
In terms employment, the report said the food services industry in India had a total of about over 7.3 million in 2021.
"Despite over two million jobs lost during the peak of the COVID-19 pandemic, the industry is expected to reach 10 million by 2025," it said.
The report also pointed out that due to inflation, nearly 51 per cent of consumers are either dining out less or ordering less frequently, while nearly 40 per cent of them are ordering fewer items or ordering less expensive items in their order.
The main challenges for the sector continue to be supply delays or shortages of key food or beverage items which 96 per cent of operators experienced in 2021 and are likely to continue in 2022-23, it added.
