Market Overview of Food Catering Business in India
By Vishnu Sultania, Avinash Singh
Introduction
The food catering industry in India is a vibrant sector, offering a wide range of culinary services for events, from grand weddings to casual gatherings to airline catering among others, businesses are constantly innovating to meet diverse consumer tastes. With increasing urban disposable incomes, the demand for unique dining experiences is growing, this report explores the current landscape, trends, and opportunities within India’s catering market.
Structure of Industry
Catering industry can be categorized into the following:
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- On-Premises Catering – Refers to catering where food preparation, serving etc are done at the client location, examples of such are Weddings, Parties, Off-site functions, house events and others.
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- Off-Premises Catering – Refers to catering where food preparation is done at a central location/kitchen owned by the catering company and post preparation is delivered to multiple area/functions. Examples of such could be the central kitchen of IRCTC etc.
Regulations
The catering business in India is subject to various regulations to ensure food safety, hygiene, and compliance with local laws such as FSSAI License, Local Health and Safety Regulations etc.
Customers Profile
Festivals, Events, Corporates, Industrial, Hospitality, Healthcare, Educational, Sports & Leisure, and Others.
Industry Outlook
According to the NRAI IFSR 2024, the Indian food services industry is estimated to be valued at Rs 5,69,487 crores as of FY24. It is projected to grow to Rs 7,76,511 crores by FY28, achieving a CAGR of 8.1% overall, with the organised segment expected to grow at a CAGR of 13.2%
Urban Concentration
According to the Bain’s report, approximately 70% of food services consumption as of 2023 is concentrated in the top 50 cities and among upper-middle and high-income segments, which are expected to remain demand hotspots in the medium term. However, incremental growth is expected to come from other tier 2 and beyond cities as well.
Organised & Unorganised Segment
Currently the catering industry is led by many small and medium size businesses. While after the COVID 19, a shift is being observed. The organised food services market segment is projected to touch 51% ($36.46 billion) of the total $71-billion domestic food service market in 2025, while the unorganised segment will stand at 49%. This can also be observed as per the FSSAI data showing number food establishments in this sector:
| Catering sector | 2013 | 2016 | 2021 |
| Unorganized Market | 70 % | 67% | 59% |
| Organized Standalone | 22% | 23% | 28% |
| Chain Market | 5% | 7% | 10% |
| Restaurants in Hotel | 3% | 3% | 3% |
Major Players in India
India Catering Service market is fragmented with the manifestation of small, medium, and large corporations. Some of the major players includes Sodexo, Compass India, Box8, HungerBox, LSG Sky Chefs, Chartwells Higher Education Dining Services, Canteen.
Key Drivers of the Market
The Indian food and beverage industry has witnessed healthy growth over the recent years and has illustrated a forward moving approach, resulting in multiple factor that escalates consumption for F&B industry in India. The diagram below depicts the major factors that are contributing to the growth of this industry.
Major Challenges: Hampering the Growth of The Market
Emerging Segments
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- Office Catering: Many corporates, like Google, are providing lunch to employees as a part of their employee welfare initiatives.
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- Factory/Industrial Catering: Catering services tailored for factories and industrial establishments are gaining traction.
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- Cloud Kitchens: Like off-premises catering, cloud kitchens focus on delivery and takeout, reflecting changing consumer preferences. examples of such are IRCTC (railway catering), Akshaya Patra Kitchens (Mid-day meals for students).
Current Trends in Industry
The catering industry in India is evolving, with several key trends emerging are given below:
Conclusion
In summary, the catering industry in India is set for robust growth, fuelled by rising disposable incomes and evolving consumer preferences. With opportunities emerging in organized segments and innovative models like cloud kitchens, stakeholders can navigate challenges effectively to capitalize on this vibrant market.
Author (s)
Vishnu Sultania is the Managing Director at AKMV Consultants, and a financial advisor to United Nations UNDP | vishnu@akmv.co.in | +91 98100 25049 | +91 88519 31474
Avinash Singh is a qualified Chartered Accountant and serving as a Finance Analyst at AKMV Consultants | avinash.singh@akmv.co.in | +91 89291 04081
