India’s organized food services market may grow at about 10.5 percent CAGR to $37 billion over during FY20-25, said a report by Kotak Institutional Equities.
Within the organized segment, chains can potentially grow at 13 percent CAGR to $9.5 billion, capturing a 12 per cent share in the overall food services market from 9 percent at present.
“We expect India’s organized food services market to grow at about 10.5 percent CAGR to $37 billion over FY2020-25E, garnering 46 percent market share from 40 percent at present,” it said.
“Our bottom-up analysis of the market opportunity for western QSRs (quick service restaurants) across 541 districts in India indicates potential for over 50 per cent store growth by FY2025E.”
As per Kotak’s city-wise forecast, factors include purchasing power, addressable population, palate preferences, extant QSR penetration, cluster-based expansion, and economic viability. Even as western QSRs are widely accepted in India, their penetration and share of the food services market at 3-4 percent is much lower than in developed markets (over 15-20 percent), it added.