As per the Food Service and Restaurant Business Report 2022–23, published by Francorp and restaurantindia.in, India’s food service market is expected to reach USD 79.65 billion by 2028, growing at a CAGR of 11.19 percent from USD 41.1 billion in 2022.
The report said that, though over 20 lakh jobs were lost during the peak of the COVID-19 pandemic, the industry is expected to reach employment figures of 1 crore by 2025.
The restaurant and food service market in the country is divided into two segments, with the unorganised segment accounting for the major share, but the organised sector also grew at a strong rate between 2014 and 2020.
So the good thing is that 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, and the quick service restaurant (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 expected to be the fastest-growing subsegment in the entire food service market, not just the chain market, with a CAGR of 23%.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.
According to the report, the annual spending of middle-class households on fast food restaurants in India’s Tier II and III cities has grown by 108 percent in the last two years, from Rs. 2,500 to Rs. 5,400. In terms of employment, the report said the food services industry in India had a total of about 7.3 million employees in 2021.
The report also pointed out that due to inflation, nearly 51 percent of consumers are either dining out less or ordering less frequently, while nearly 40 percent of them are ordering 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 percent of operators experienced in 2021 and are likely to continue in 2022–23, it added.