Driven by a large young population, growing economy and rising disposable income, the foodservice profit sector in India is forecast to grow from INR10.3 trillion (US$23.7bn) in 2018 to INR15.9 trillion (US$32bn) by 2023, registering a compound annual growth rate (CAGR) of 9.0%, says GlobalData, a leading data and analytics company.

GlobalData’s report, ‘India – The Future of Foodservice to 2023’, reveals that pub, club and bar was the largest foodservice profit sector channel by value in 2018, followed by Quick Service Restaurants (QSR), and Full Service Restaurants (FSR).

Tanumoy Chattopadhyay, Consumer Analyst at GlobalData, says: “With increasing number of young professionals and dual income households, Indian consumers are short on time and are inclined to eat outside or order online.”

All the channels in the profit sector registered sizable growth during 2016-2018, and are forecast to continue growing at positive CAGRs between 2018 and 2023. FSR and QSR channels led the profit sector in revenue terms through 2016-2018, posting CAGRs of 12.3% and 11.7%, respectively. Both the channels benefitted from consumer’s rising disposable income, which resulted in consumers trading up from mobile operators and street vendors to QSR and FSR.

The report states that the growth in the profit sector is expected to come mostly from increasing transactions number over transaction value, with consumers seeking new experiences and looking for new food items. The number of transactions is forecast to grow at a CAGR of 5.4% during 2018-2023. Meanwhile, outlet growth is forecast to remain comparatively weak, rising at a CAGR of 4.2% during the same period.

The report also indicates that independent operators and dine-in transactions contribute to majority of revenues in all major channels, although revenue generated by chain operators and takeaway transactions is forecast to grow at a faster rate by 2023, reflecting a shift towards both consolidation and an increased focus on convenience in the market.

Tanumoy concludes: “Foodservice market in India will continue to benefit from country’s rapidly growing urban population and evolving consumer lifestyles. Moreover, with benefits like time saving and convenience as well as influx of various apps and websites, online food ordering, online payments, self-ordering kiosk and online table reservation will continue to increase, improving every aspect of service, including speed and quality.”