The Indian food services market is valued at $80 billion in 2024 and is expected to grow at 10-11% CAGR to reach $144-152 billion by 2030, says a report on Wednesday. The organised food services market which is half of the overall market is growing faster than the unorganised segment driven by online food delivery and brand influx, says the report by Redseer Strategy Consultants.
Cloud kitchens by leveraging shared infrastructure and resources to operate multiple brands are scaling brands in the market. They have disrupted the traditional dining models, offering scalability and flexibility to adapt to different demographics.
Cloud kitchens grow faster and operate more efficiently by using shared kitchen spaces which reduces capex and overhead costs.
"The plug-and-play model of cloud kitchens allows for scalability, new brands can reach Rs 100 crore in 2-3 years, much faster than 6-10 years for dine-in focused brands,” said Rohan Agarwal, Partner at Redseer Strategy Consultancy.
Consumers in metro and tier 1 cities are ordering in and dining out more, driven by convenience and a break from routine.
Also, outside meals are seen as a social activity, where one can spend time with loved ones and celebrate all occasions, the report said.
Social media, pop culture and variety demand have driven the rise of niche cuisines, frequency is rising.
“Multi-brand strategy is the winning formula, businesses can diversify portfolio, mitigate risks and scale across different customer segments and meal slots,” said the report.
Notably only 1-2% of companies in India have scaled beyond Rs 500 crore, and most of this has been driven by multi-brand approach.
But even for them expanding number of stores alone will not drive scale, as the market gets more diverse with new cuisines and service models, the report said.
