The Indian Food Service Industry

In the recent past, the Indian food service industry has seen unprecedented growth due to the changing demographics, increase in disposable incomes of the Indian Middle Class, women in workforce, increasing urbanization and families eating out more often.

The US$50-billion food service industry is currently dominated by the unorganized sector and while this is not likely to change in the near future, there will be a steady decline in the share of unorganized food sector over the next 4-5 years.

At the same time, the market for organized food service industry stands at US$15 billion of the total market and is expected to grow at a CAGR of 17% to reach US$33 billion by 2020, capturing 36% of the total market.

Within the organized food service industry, one segment that is growing the fastest is the Quick Service Restaurants (QSRs), which is a price sensitive segment, and caters to majorly the youth. Increasing disposable incomes, the shift in consumer preferences to increasingly eat out, and greater hygiene consciousness are some of the factors contributing to the rise of QSRs. In India, QSRs have a significant opportunity to grow, despite the fact that the chains of both Indian and MNC brands are still confined to certain growth centers only.

The QSR segment in India is slated to grow at a CAGR of 18% to reach US$4.13 Billion by 2020 from US$2.13 Billion in 2016.

The QSR segment has seen the entry of foreign players such as Wendys, CarlsJr, Johnny Rockets and some domestic companies like GoliVadaPav and the VC-backed Burger Singh also form part of it.

The CMR Initial Market Guidance report on the food sector, with its key focus on QSR, provides the big picture on all aspects of the food service industry, and captures current demand and supply drivers; opportunities and challenges.

Digital is impacting all aspects of the food service industry, as seen with the emergence of new business models: restaurant aggregators, online food delivery, and cloud-based kitchens that back amateur home cooks.

Technology will influence all aspects of the food business–from sourcing to advance reservations, from check-in to on-demand delivery.

Digital is contributing to a new breed of consumers with an increasing demand for gourmet and specialized food.

Food order delivery duration in India stands at approx. 45 minutes/order. We are seeing early signs of disruption here, with startups promising delivery in <30 minutes/order.

For any new QSR entrant to the India market, the real challenge is always getting the homework right on consumer tastes and preferences. It is prudent to not go by mere gut feel, but having the company strategy right backed by actionable research insights.

Download the (IMG) Initial Market Guidance Report on Food Service Industry at the following link


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