Food services industry to grow at 8% CAGR to ₹7.76-lakh crore by 2028, dining-out growing rapidly: NRAI

The Indian food services industry is projected to grow at a compound annual growth rate (CAGR) of 8.1%, reaching ₹7.76-lakh crore by 2028 from the current ₹5.69-lakh crore, according to a report by the National Restaurant Association of India (NRAI).

This growth will make India the third-largest food services market globally, surpassing Japan, and the second fastest-growing market. The organized segment is expected to expand more rapidly, with a 13.2% CAGR, overtaking the unorganized segment in the next 3-4 years to reach ₹4.10-lakh crore, thereby increasing its contribution to 52.9% from the current 43.8%.

Kabir Suri, President of NRAI and Co-Founder and Director of Azure Hospitality, highlighted the sector’s resilience post-Covid-19, driven by rising incomes, demand from tier-2 and tier-3 markets, rapid urbanization, and a young population.

The industry now employs 8.55 million people, a number expected to grow by 20% by 2028, and contributes ₹33,809 crore to the Indian exchequer. The frequency of dining out has increased to about eight times per month in FY24 from 6.6 times per month in 2018-19.

Nitin Saluja, Founder of Chaayos and Chairman of the NRAI Report Steering Committee, noted that dining out remains popular despite the rise of food delivery services, as home-cooking declines due to urbanization and busier lifestyles.

For FY25, the industry is expected to maintain an 8% CAGR, with top cities driving much of this growth. The organized segment is led by casual dining restaurants, followed by quick service restaurants (QSR), cloud kitchens, and cafes, which are anticipated to be the fastest-growing formats from 2024-28.

NRAI has called on the government to grant industry status to the food-services sector, simplify and standardize licensing, and allow longer operating hours. Additionally, they advocate for a fair e-commerce policy, reasonable caps on aggregator commissions, and two GST slab options: 12% with input tax credit and 5% without it.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest Articles

Sign Up for CXO Digital Pulse Newsletters

Sign Up for CXO Digital Pulse Newsletters to Download the Research Report

Sign Up for CXO Digital Pulse Newsletters to Download the Coffee Table Book

Sign Up for CXO Digital Pulse Newsletters to Download the Vision 2023 Research Report

Download 8 Key Insights for Manufacturing for 2023 Report

Sign Up for CISO Handbook 2023

Download India’s Cybersecurity Outlook 2023 Report

Unlock Exclusive Insights: Access the article

Download CIO VISION 2024 Report