Learning about India through its foodThe unorganized sector dominated the industry historically, and continues to do so despite lower growth rates. The slowdown can be attributed in part to the entry of multinational food-companies in the last two decades and the emergence of metros with food courts in shopping centers. This helped the organized segment expand significantly. The organized food service market occupied about 35 percent of the sector and was expected to continue growing. Within this segment, quick service restaurants accounted for the largest share.
With incomes continuing to rise, a burgeoning young population, and booming urban centers, affordable casual or fine dining had also carved a chunk of the market in recent years. Regional cuisine was increasingly a focus for this segment, highlighting traditional cuisines from different areas of the country. Ethnic food had also entered India’s cafes in recent development, and specifically, an increase in tea chains around the country.
Transforming food services through technologyThe use of tech changed operations for food services in the country. Accelerated by rapid internet adoption and consequent use of digital payments and mobile wallets, Indian food delivery services as well as cloud kitchens became increasingly popular. Zomato was one most popular meal delivery platforms in the Asia-Pacific area. In 2021, its mobile app received the most downloads, while Swiggy, a Bangalore-based startup ranked third during the same time.
This niche market, after experiencing a brief slowdown due to closures and acquisitions in 2015, rose to arguably become the most important service pillar during the COVID-19 lockdowns between 2020 and 2022. Online food delivery diversified into grocery delivery, and errand services during this time and continues to flourish.
Food-loving Indian consumersApart from discussing food as part of everyday polite small talk, the proof that Indians love to eat showed in their online spending. Affordable full-service restaurants, along with street food vendors at every corner, as well as the local chai-wala (tea seller) ensured a high frequency of eating out among Indians of all age groups. Despite countless varieties of global food, surveys showed a strong preference for local cuisine. During the pandemic lockdown, biriyani was the most ordered dish on Swiggy.
Even though parts of the market thrived despite the COVID-19 lockdown because of delivery and digitalization, the food and service industry overall saw a decline since 2020. Experts believed, however, that the path to post-pandemic recovery in India depended on improving finances towards operations and infrastructure, along with a focus on policy and regulation.