India Food Report 2016 published by IMAGES Research pegs the market size of India’s Food & Grocery retail (F&G) retail at INR 23,00,500 crore ($ 383 billion).
The market is growing at 15 per cent per annum, and is expected to cross Rs 35,60,000 crore ($ 593 billion) by 2017. By 2020, it is estimated to grow to twice its current size.
The modern F&G retail market, which is currently less than two per cent of the total market, is expected to grow at 20–25 per cent per annum. With the same growth rate, the modern F&G retail market is well poised to grow even triple its present size by 2020.
The findings of IMAGES Research reveal that the Indian food market, sixth-largest food market in the world at present, is valued at INR 25,13,00 crore (25.13 billion rupees), and is expected to cross INR 61,00,000 crore (61 billion rupees) by 2020.
Food is the largest retail consumption category in India, accounting for 33 per cent of overall consumption expenditure. Indians spend more on food than on any other consumption category and this is expected to continue in the coming decade. In the year 2014-15, the share of total household sector expenditure going into food was around 43 per cent.
There has been a steep decline in this share over the last two decades from 62 per cent in 1993-94 to 50 per cent in 2000-05. More than half of the total household sector spending on food is expected to come from rural India in the coming decade.
Food demand is expected to more than double by 2025. There has been average growth of 12-13 per cent every year in food consumption in value terms. Recent data released by CSO finds that consumption expenditure on food items is on the rise. For the period from 2004–05 to 2012–13, food expenditure grew at a CAGR of 12.5 per cent.
Along with the rising demand for food and its growing consumption, there is an evolution of dietary habits as well. Indians are becoming more welcoming towards processed, Western food options like noodles, corn flakes, juices and oats – something which was very nascent until 10 years ago.
Factors like increasing awareness and health consciousness, changing lifestyles and time poverty, increasing drift towards convenience and improving availability of convenience foods are increasing the share of processed and packaged foods (including ready to eat / ready to cook traditional and westerns food options, snacking etc.) in the consumer’s food basket.