Food and Beverage Industry in India 2025

This surge in the F&B industry not only signifies unprecedented economic opportunities but also has broader implications for various stakeholders.

India’s evolving economy with its rapid urbanization, technological advancements, spurring consumption and demand for branded products. It is driving growth across industries and creating a dynamic landscape of opportunities. 

This is a remarkable golden period for growth in the Indian food and beverages (F&B) industry. The sector is experiencing significant expansion, driven by quick commerce, on-demand delivery, and digitalization, which have enhanced accessibility for consumers. F&B products are essential items that customers increasingly expect to be available on demand. This trend is evident in the success of business models like Zomato, Swiggy, Instamart, Blinkit, and Zepto, which cater to this growing demand seamlessly.

Growth of Food and Beverage Industry in India

Here are key points illustrating the growth of the food and beverages (F&B) industry in India:

Market Expansion:

• FMCG market set to grow at 14.9 percent CAGR, reaching $220 billion by 2025. 
• India's economy forecasted to become the third-largest consumer market by 2030.
• India is expected to be the fastest growing among the top economies for the next five years.

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Quick Commerce Growth:

• The rise of quick commerce platforms like Blinkit and Zepto has transformed how consumers access everyday essentials.
  On-Demand Delivery Services:
• Platforms like Zomato and Swiggy have revolutionized food delivery, meeting the increasing demand for convenience.

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Digitalization:

• Technology adoption across the supply chain, from online ordering to AI-driven customer insights, has enhanced operational efficiency and customer experience.

Changing Consumer Preferences:

• Increased demand for healthy, organic, and premium F&B products.
• Growing interest in ready-to-eat and international cuisine.

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Innovation in Products:

The sector is seeing a surge in plant-based, sustainable, and functional food items catering to health-conscious consumers.

Rural and Urban Growth:

• Urbanization is driving demand for premium products, while rural markets are becoming new growth frontiers with improved infrastructure and connectivity.

Government Support:

Initiatives like “Make in India,” “Operation Greens,” and incentives for food processing have bolstered the industry.

Export Potential:

India is emerging as a global supplier of processed food and beverages, tapping into international markets.

Evolving Business Models:

The success of innovative models, such as hyperlocal delivery and cloud kitchens, underscores the dynamic growth of the industry.

Turning Point in Discretionary Consumer

Discretionary Consumer means individual who spends money on non-essential goods and services. which are not required for basic living but cater to lifestyle, luxury, or entertainment preferences. These purchases are influenced by the consumer's disposable income, economic conditions, and personal desires rather than necessity.

With this defination you can understand using this marketing approach food and beverage industry tric with consumer. This things we can see specially on festival seasons. People despit the necessety focuse on showcase. 

Common Discretionary F&B Categories

This food and beverage category consists of items such as breakfast cereals, coffee, confectionery, soft drinks, and sweet and savory snacks. These food and beverage product segments gain traction when a country's GDP per capita reaches USD 2,000–2,500.

New-age discretionary items

Products such as processed fruits, vegetables, seafood, meat, meat alternatives, and ready meals. Ready to eat (RTE) and ready to cook (RTC) categories are booming with innovative products and brands.

Staple items

Essential items like baked goods, bottled water, and edible oils are set for steady growth before hitting saturation.

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Shift in Food Categories Offers Companies a Chance to Capitalize on Growth

Innovation and New Product Launches Proliferation of brands and products

India’s F&B market is expected to reach nearly USD 350 – 400 billion by 2027 with a CAGR of 9% to 10%. More than 1,500 companies have invested into the food and beverage industry. Several startups of F&B industry have secured funding in the last 10 years, such as Country Delight, Curefoods, Paper Boat, Epigamia, Wow! Momo, and many other.

"In FY 20, the 15 to 24 age group in India ate out twice a month and ordered in once a month - As per Food Service & Restaurant Business Report 22-23."

Focus on health and indigenization

India's health food market to reach USD 30 billion by 2026 with the growth rate of 20 percent CAGR. People are double their spending on health-focused foods and beverages over the next five years. Tier 2 cities are increasingly health-conscious diets, leading to greater attention to nutritious and delicious food alternatives.

"Subway India has upgraded its protein flavors and menus nationwide, while traditional and contemporary brands are embracing ayurvedic superfoods such as turmeric and amla."

Digital transformation and innovation

The food and beverage industry has experienced a significant transformation driven by innovation, technological advancements, and changing consumer preferences.  The use of AI in the F&B industry is set to grow rapidly over next 5-10 years. 

Premiumization

"Premiumization means the process of enhancing a product or service to offer higher quality, exclusivity, or luxury, often at a higher price point. It involves appealing to consumers' desire for superior value, better craftsmanship, or prestige, driving them to pay more for a premium experience or product."

In India middle-class income is continues to rise. It is increasing the buying tendency for high-nutritional, sophisticated, and premium food products. The Indian gourmet food market is expanding across categories such as exotic sauces, olives, honey syrups, spreads, and cereals. This growth highlights changing taste preferences and a growing interest in premium offerings.

Premiumization in the Indian Food and Beverage industry is a response to the rising middle-class income and evolving consumer preferences. This shiftis a significant opportunity for the F&B industry to cater to the evolvingtastes and demands of the Indian consumer base.

Tailored route-to-market

Digital transformation in retail is on the rise. It is important to recognize the F&B market influenced by digital transformation and online grocery market growth.

Conclusion

The Food and Beverage (F&B) industry in India is poised for remarkable growth by 2025. The F&B sector is set to expand across categories such as ready-to-eat (RTE), ready-to-cook (RTC), health-focused foods, and traditional favorites. Emerging trends like sustainable packaging, plant-based diets, and regional flavors will continue to shape the market. With the right mix of innovation, quality, and affordability, businesses in this sector can capitalize on the immense opportunities ahead.