When was the last time you ordered food from outside? Maybe three days ago, two days ago, or perhaps just a few hours back? Or you’re savoring your culinary delight as you read this? Metro and Tier-1 consumers are embracing the joy of ordering in and dining out, combining convenience with a refreshing escape from the everyday grind. Outside meals have become more than just food—they’re now social events, perfect for quality time with loved ones or celebrating all little and big moments!
Valued at approximately $80 billion in 2024, the Indian food market is projected to expand at a CAGR of 10-11% through 2030, with the organized sector leading the charge. In our latest report Cloud Kitchens: Scaling up in India’s Food sector, we highlight how multi-brand companies and cloud kitchens are well-positioned to capitalize on this opportunity.
The Rise of Organized Food Services
The organized sector currently constitutes approximately half of the overall food services market but is growing significantly faster than the unorganized segment. This expansion is fuelled by two key drivers:
- Surge in online food delivery – Rising benefits on online platforms, including delivery-only brands, menus, cuisines, etc. Is fuelling online traction
- Growth of organized dine-in establishments – Rapid growth of restaurant chains, coupled with rising consumer preference for dining out, is expected to further drive the expansion of the organized dining market
The Multi-Brand Advantage
This shift in consumer preferences has fuelled substantial brand creation, as evidenced by the surge in the number of companies over the past few decades. Brands that can adapt and innovate to cater to these evolving tastes stand to scale successfully, with only 1-2% of companies in India having scaled beyond INR 500 crore.
Multi-brand companies have emerged as the winning formula in this race for scalability and profitability. In contrast, larger single-brand companies often experience growth plateaus, relying heavily on new store additions to expand revenue. Multi-brand players, by diversifying their portfolios, through acquisitions and collaborations secure steady revenue streams, mitigate risks, and enhance consumer engagement with broader offerings.
The Rise of Cloud Kitchens
Among these multi-brand companies, cloud kitchens have been a game-changer for the Indian food services market. Unlike traditional restaurants, cloud kitchens operate without a dine-in setup, focusing solely on delivery. By operating multiple brands within a shared infrastructure, they unlock higher operational efficiency, optimize resource utilization, and accelerate time-to-market for new concepts, giving them a significant edge in the competitive food services landscape by catering to a broader customer base. This approach not only ensures higher kitchen utilization across all meal slots but also drives revenue growth by offering diverse cuisine options from the same setup.
Faster Time to Scale
Cloud kitchens have also emerged as leaders in achieving faster revenue milestones compared to traditional restaurant models.
Many brands have reached the INR 100 crore revenue mark within 2-3 years by leveraging shared resources and a plug-and-play model for launching new offerings.
This agility has been particularly beneficial in responding to evolving consumer preferences. By rapidly introducing new brands or cuisines, cloud kitchen operators can capitalize on emerging trends and ensure sustained growth.
Pathways to Future Growth
To capitalize on the immense potential of the Indian food services market, companies must focus on three critical imperatives:
- Diversity in offerings: Companies must cater to the evolving tastes of consumers by introducing new cuisines, meal options, and dining formats
- Agility in Launching Brands: The ability to rapidly launch and scale new brands in response to market trends ensures first-mover advantages and sustained growth.
- Operational Efficiency: Leveraging shared kitchens, cloud kitchens, and streamlined supply chains can significantly reduce costs while improving margins.
These three pathways position cloud kitchens as the ideal model to drive growth and capture the future of the food services sector in India.
At Redseer Strategy Consultants, we specialize in empowering businesses from various sectors to scale effectively and achieve their growth ambitions. Whether you are operating in India’s food services sector- be it a consumer food industry brand or a quick commerce or e-commerce leader, or any other sector, our expertise in market entry strategy due diligence and network optimization would enable you to capture new opportunities in these regions.
Through our strategic frameworks and actionable recommendations, we help companies navigate complex challenges and seize emerging opportunities. Our comprehensive research & data, along with a bespoke solution would ensure that you are set apart in a competitive market. Reach out today to partner with us and accelerate your journey to success.
Download the full report here for more information!
