A report states that India’s food consumption landscape is undergoing a dynamic transformation, driven by demographic shifts, rising affluence and evolving lifestyle aspirations.
While rural consumption is tilting towards beverages and processed foods from cereals, urban elites increasingly spend around 50 per cent of their food budget on packaged foods, dining out and deliveries, as highlighted by a report.
Highlighting that India’s agriculture and food processing landscape is at a pivotal juncture, the report by Deloitte and the Federation of Indian Chambers of Commerce and Industry (Ficci) noted that India’s food consumption landscape is undergoing a dynamic transformation, driven by demographic shifts, rising affluence and evolving lifestyle aspirations.
Consumers across income groups are moving beyond traditional staples towards more varied, protein-rich, processed diets. With higher-income consumers driving growth through demand for quality, convenience and indulgence, the report added that premiumisation is also an emerging trend.
Rural Consumption Driving Growth
Rural fast-moving consumer goods (FMCG) consumption outpaced urban growth in FY2024, with a six per cent volume growth in Q3, supported by increased rural coverage and innovation in smaller Stock Keeping Units (SKUs).
“India’s agri and food processing sector is on the brink of a transformative leap, where tradition meets cutting-edge technology to build a future-ready food ecosystem. Consumer demand is shifting towards clean-label, protein-rich and gut-friendly foods, driving a structural evolution in how India consumes food,” highlighted Anand Ramanathan, Partner and Consumer Industry Leader, Deloitte South Asia.
The report added that in line with changing consumer preferences, the food processing industry is undergoing rapid transformation, shaped by innovation, rural demand, sustainability imperatives, and commodity price pressures.
Food Processing Sector Gaining Momentum
Supported by rising rural demand, digital advancements and strong policy support, the agriculture and food processing sector represents nearly 30 per cent of the national food market. The report added that the food processing sector accounts for approximately 7.7 per cent of India’s total manufacturing GVA (gross value added).
Jyoti Vij, Director General, Ficci, stated, “ India’s food processing sector holds immense transformative potential, both as a driver of economic growth and as a catalyst for inclusive development. As evolving consumer preferences and health-conscious choices reshape food systems, the need for resilience, innovation and value addition has never been greater.”
The report noted that with consumption trends aligning across urban and rural India, tier-two and tier-three cities are fast becoming engines of economic growth.
Growing Demand For Health-conscious Products
Health and wellness concerns are becoming central to food choices. The report mentioned that there is a growing preference for high-protein, low-sugar, gut-friendly, organic and functional foods, reflected through the resurgence of traditional Indian super foods such as millets and makhana.
“The rise of clean-label products reflects a maturing preference for transparency and preventive nutrition. This health consciousness extends across urban and non-metro markets, indicating a more uniform behavioural shift,” the report explained.
The report also emphasised rising curiosity around global cuisines and regional flavours, marking a convergence of heritage and innovation in consumer preferences.
Strategic Imperatives To Realise Full Potential
With targeted investments and supportive policy frameworks, India can elevate its position as a global hub for high-quality, differentiated food products. While highlighting that India’s food processing sector is poised for growth, the report provides certain instructions to realise the full potential.
“Foster public-private collaboration to streamline regulations, support infrastructure development and provide targeted support to micro, small and medium enterprises (MSMEs) and startups. Boost food exports by enhancing value chains to meet global demand for wellness-focused, culturally rooted products, while strengthening India’s food brand,” it added.
The report stated that increasing rural market presence by offering affordable premium products, creating localised SKUs and establishing robust distribution networks based on regional insights and aspirations can aid the growth.
