The market, which is currently growing at 17% each year, should reach INR42 lakh crore (US$683bn) by 2020—almost doubling its INR23 lakh crore in 2014.
Speaking at an industry event in Mumbai, Rohit Ramesh, Boston Consulting’s principal in India, said the growth comes in tandem with a threefold increase in average household income from 2010-20, marking a move towards premium products.
“Indian food habits have been evolving over the years with an increase in the consumption of fresh dairy products, protein and healthy foods,” Ramesh said.
Food expenditure is now perceived to be second to health expenditure in India, said the report, with higher disposable income, women working and the urbanisation of people is increasing the consumption level in the country.
However, in spite of the nation’s greater affluence, Indian tastes are only moving gradually towards new product categories—a far cry from China, where preferences have notably become more western in their outlook.
Ramesh added: “The market is comprised of 41% fresh perishable dairy, 34% staples and 15% on beverages and foods.” Fresh dairy and protein foods have risen appreciably, he said.
Food Bazaar chief executive Devendra Chawla said consumers are quickly evolving and are developing a taste for multi-grain, multi-vitamin and low-calorie foods.
“While supermarkets have aided Indian housewives, retail trends indicate that convenience is gaining a premium, while health and hygiene have gained prominence in the food segment,” said Chawla.