Food services sector to grow by 8.1% CAGR between 2024 and 2028

  • India’s food services industry is expected to reach 7.76 trillion by 2028 from the current 5.69 trillion, growing at a CAGR of 8.1%, according to the India Food Services Report 2024

Varuni Khosla
First Published9 Jul 2024, 06:22 PM IST
Rising income levels have led to a shift in consumer behaviour, with higher consumption driven by millennials and Gen Z buyers being major contributors to the expected growth. (Photo: Mint)
Rising income levels have led to a shift in consumer behaviour, with higher consumption driven by millennials and Gen Z buyers being major contributors to the expected growth. (Photo: Mint)

New Delhi: India’s food services industry is expected to reach 7.76 trillion by 2028 from the current 5.69 trillion,  growing at a CAGR of 8.1% due to expanding market opportunities and improving economic conditions. The rising income levels have led to a shift in consumer behaviour, with higher consumption driven by millennials and Gen Z buyers being major contributors to this expected growth. This segment includes catering and delivery services but not the hotel industry. The sector has now recovered from its post-covid slump when the industry had decreased to 2 trillion. Pre-covid in 2019, the sector was at 4.23 trillion, according to the India Food Services Report 2024 by the National Restaurant Association of India, released today in association with market research agency Kantar.

In 2024, the sector was the third-largest industry in India, following retail and insurance, at 5.7 trillion. The retail sector, of course, stood at a far larger amount at 62.9 trillion, and insurance at about 7.9 trillion. The organised sector is growing faster than the unorganised sector. In 2024, the organised segment was valued at 3.66 trillion, while the unorganized segment stood at 3.2 trillion. By 2028, these figures are projected to grow significantly, with the organised segment expected to reach 7.76 trillion, while the unorganised segment is projected to grow to 5.69 trillion.

Read | Liquor firms in a twist over permit rollout in Punjab

Additionally, in 2024, the organised segment held 52.9% of the market share, compared to the unorganised segment's 47.1%. By 2028, the organised segment's share is projected to increase to 57.7%, while the share of the unorganised segment is anticipated to decrease to 42.3%. This indicates a notable shift towards the organised sector over the next few years.

"The industry is very large now and is 1.9% of the entire GDP and contributes about 1.4% of the entire GDP collected," said Nitin Saluja, co-founder of cafe chain Chaayos and chairperson of the report steering committee of the association. The employment dynamics within this significant industry indicate substantial growth and its role as a major employer. In 2024, the industry employed 85.5 lakh individuals, a figure projected to increase to 103.21 lakh by 2028. This growth underscores the sector's expanding importance in providing employment opportunities across various roles and skill levels. It has also said it is the second-largest in terms of employment in the country and will have an increase from 85.5 lakh jobs at present to 103.21 lakh employees over the four-year period.

Saluja said the financial year will also have a similar 8% growth for the sector and the top nine cities will contribute to 60% of the revenue generated by the food and services sector. “The food delivery market is also growing robustly at about 22%,” he said.

Also | Luxury brands Hublot, Baccarat, others pull out all stops for an Indian festival

The sector is advocating for a dedicated ministry focused on its needs to push for an agenda for faster growth and to better appreciate the challenges it faces and is asking for 'industry status' for the food services sector, which would further boost it and encourage enterprise and entrepreneurship. The industry is also proposing two options for GST slabs, one at a 12% GST rate with an input tax credit, and the current 5% GST rate without an input tax credit. With the credit available, restaurants will be able to pass on the benefit to customers.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
First Published:9 Jul 2024, 06:22 PM IST
HomeNewsIndiaFood services sector to grow by 8.1% CAGR between 2024 and 2028

Most Active Stocks

Indian Oil Corporation

173.95
12:26 PM | 11 JUL 2024
2 (1.16%)

Tata Steel

169.90
12:27 PM | 11 JUL 2024
1.9 (1.13%)

Bharat Petroleum Corporation

304.75
12:27 PM | 11 JUL 2024
4.4 (1.46%)

Oil & Natural Gas Corporation

303.60
12:27 PM | 11 JUL 2024
5.55 (1.86%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Great Eastern Shipping Company

1,476.40
12:11 PM | 11 JUL 2024
114.65 (8.42%)

Gujarat Pipavav Port

236.15
12:11 PM | 11 JUL 2024
16.4 (7.46%)

Sona Blw Precision Forgings

734.00
12:11 PM | 11 JUL 2024
44.7 (6.48%)

Engineers India

278.15
12:11 PM | 11 JUL 2024
15.9 (6.06%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K

    Fuel Price

    • Petrol
    • Diesel
    OPEN IN APP
    HomeMarketsPremiumInstant LoanMint Shorts