A report shows that of over 1,000 organised companies, 89 to 90 per cent are still in the early stages of scaling, with only around 2 per cent having scaled beyond Rs 500 crore
India’s food services market is set to grow from USD 90 billion today to around USD 150 billion by 2030, with organised players, online food delivery and digital-first brands reshaping the industry. Yet, scaling still remains the hardest nut to crack for Indian brands.
Of over 1,000 organised companies, 89 to 90 per cent are still in the early stages of scaling, with only around 2 per cent having scaled beyond Rs 500 crore, a report by Redseer Strategy Consultants has revealed. The organised market has 7 to 8 per cent brands which operate within the Rs 50 to 500 crore range. The brands pulling ahead share a common approach: online-first operations, focused menus and premium positioning working together as a single playbook.
The report showed that brands that have followed this formula are already hitting Ebitda profitability.
Growth Drivers In Food Services Market
The report mentioned that the organised players are growing at 17 to 18 per cent compound annual growth rate (CAGR). The organised market comprises 45 to 50 per cent of the total market and is expected to grow faster than the unorganised market. Online food delivery is becoming an increasingly important channel, with its share of the food services market expected to rise from 11 per cent in FY26 to 18 per cent by FY31.
Tier 2 plus food delivery transactions have nearly tripled since FY21, increasing from around 6 crore in FY21 to around 18 crore in FY26, driven by expanding platform reach and digital adoption.
Sustainable profitability is being achieved through a combination of cloud kitchen-led operations, focused menus, and premium brand positioning, enabling brands to improve margins while continuing to scale.
The report added that India’s USD 90 billion food services market remains significantly under-capitalised. China has around 11 publicly listed restaurant/food service companies with a combined market cap of around USD 39 billion, within a USD 550 to USD 600 billion food services market as of 2026.
New-age Brands
New-age food brands are rebounding strongly, with revenues expected to grow by 25 to 30 per cent in FY26, almost 1.5x the organised market growth rate. The growth is driven by digital-first models, store expansion and deeper penetration into tier 2 cities.
Digital-first brands now derive around 90 per cent of their revenues online, compared to roughly 50 per cent for legacy restaurant chains, highlighting the structural shift towards online-first food businesses.
Snacks, desserts and beverages are emerging as the most attractive growth categories, with products such as shakes, juices, cakes, premium tea and premium coffee benefiting from higher online delivery suitability and stronger consumer demand. Premium tea and coffee segments are expected to significantly outpace mass-market offerings, with premium coffee projected to grow at 15 to 18 per cent CAGR through 2030.
With the market still relatively under-capitalised despite its strong growth potential, the report sees significant headroom for investment, consolidation and public market participation.
