Food Tech Market in India 2023

Food Tech Market in India 2023

Food Tech refers to businesses and initiatives that, among other things, use the Internet of Things (IoT), big data, and Artificial Intelligence (AI) to make the agrifood industry a more contemporary, sustainable, and effective sector at all its stages, from food preparation to distribution and consumption. Online food delivery service providers supply cooked meals and food items that are ordered online, mainly through mobile apps, for direct consumption whereas online grocery services can be provided by supermarkets, hypermarkets, e-commerce platforms and brick-and-mortar stores.

Market insights:

The food tech market in India was valued at INR 959.16 Bn in 2022 and is expected to reach INR 3,509.50 Bn by 2027, expanding at a compound annual growth rate (CAGR) of ~29.53% during the 2023 – 2027 period. Increasing adoption of technology and the ease of getting food at the doorstep have propelled the growth of the market. However, low-cost food and retail products offered by local unorganized players in tier II and tier III cities and villages restrict the growth of organized players.

Segment insights:

Based on product type, the food tech market in India is broadly categorized into two segments – online food delivery and online grocery. In 2022, the online food delivery segment dominated the foodtech market, accounting for 60.66% of the overall revenue. The online grocery segment is expected to witness promising growth during the forecast period and is likely to dominate the market by the end of the forecast period accounting for ~42.73% market share in 2027.

COVID-19 impact analysis:

The nationwide lockdowns due to the COVID-19 pandemic initially caused some disruptions in the growth of the online food delivery market. However, it has positively impacted the market fulfilling people’s urge to eat outside while still complying with social distancing norms. Several families restricted the entry of domestic helps who use public transport and work in multiple houses. These families relied mostly on home deliveries. With safety concerns around the coronavirus and a sizable portion of the population working from home, customers' reliance on internet platforms has grown dramatically, creating many potential prospects.