India’s food services market is poised for its next phase of expansion, driven by the rapid growth of organised players, online food delivery, and digital-first brands, according to a new report titled “State of India’s Food Services Market” released by Redseer Strategy Consultants.
The report estimates that the country’s food services market, currently valued at around $90 billion in 2025, is expected to grow to nearly $150 billion by 2030. Organised players are projected to lead this growth, expanding at a compound annual growth rate (CAGR) of 17-18%, significantly outpacing the unorganised segment.
According to the study, online food delivery is emerging as a key growth driver for the industry. Its share of the overall food services market is expected to increase from 11% in FY26 to 18% by FY31. Meanwhile, food delivery transactions in Tier-2 and smaller cities have nearly tripled since FY21, reflecting rising adoption beyond metro markets.
The report also highlights the strong recovery of new-age food brands, whose revenues are projected to grow by 25-30% in FY26, around 1.5 times faster than the organised food services market. This growth is being fuelled by digital-first business models, continued store expansion, and deeper penetration into Tier-2 cities.
Digital channels are playing an increasingly significant role in the sector. Redseer noted that digital-first brands now generate around 90% of their revenues online, compared with nearly 50% for traditional restaurant chains, signalling a structural shift towards online-first food businesses.
Some of the growth drivers of the Food Service Market include:
- Increased spending on convenience
- Rising preference for outside meals
- Shift to organised led by new brands
Despite the industry’s strong growth prospects, profitability remains a key challenge. The report said brands are improving margins through cloud kitchen-led operations, streamlined menus, and premium brand positioning, allowing them to scale while maintaining sustainable profitability.
Looking ahead, Redseer identified snacks, desserts and beverages as the fastest-growing categories within the food services market. Products such as shakes, juices, cakes, premium tea and premium coffee are expected to benefit from their suitability for online delivery and increasing consumer demand.
Among beverage segments, premium tea and coffee are forecast to significantly outperform mass-market offerings, with the premium coffee category expected to register a CAGR of 15-18% through 2030.
As demand for convenience, premium experiences and food discovery rises across both metro and non-metro cities, the sector is expected to witness continued formalisation and stronger participation from scalable, technology-enabled food businesses over the next decade.
