India Packaged Food Market Outlook to 2028

India Packages Food Market Overview

The India Packaged Food market is valued at USD 76 billion, driven by rapid urbanization, evolving consumer preferences, and an increasing demand for convenience-oriented food products. This market has witnessed robust growth, underpinned by the expansion of modern retail outlets, government investments in food processing, and rising disposable incomes. The sectors diversification, from traditional foods to ready-to-eat meals and snacks, has further accelerated growth.

Major cities, such as Delhi, Mumbai, and Bengaluru, dominate the market due to their dense urban populations, higher income levels, and a well-established retail infrastructure. These cities lead in the consumption of packaged foods, largely because of the busy lifestyles of urban dwellers, which spur demand for ready-to-eat and processed foods. Moreover, these urban centers also act as innovation hubs, driving new product launches.

The National Food Processing Policy, launched in 2023, aims to increase food processing levels from 10% to 20% by 2027, contributing to the growth of the packaged food sector. By 2024, the government has already approved investments worth INR 8,000 crore under this policy for setting up new processing units and upgrading existing facilities, which will help packaged food manufacturers scale operations and introduce more products into the market.

India Packaged Food Market Segmentation

By Product Type: The market is segmented by product type into dairy products, bakery and confectionery, snacks and nutritional bars, ready-to-eat meals, beverages, and processed meats. Among these, dairy products hold a dominant market share, fueled by the strong presence of established brands and high demand for products such as milk, yogurt, and cheese. The Indian diet traditionally emphasizes dairy, making it a staple product.

By Distribution Channel: The market is also segmented by distribution channels into supermarkets & hypermarkets, convenience stores, online retail, and specialty stores. Supermarkets and hypermarkets account for the largest market share, owing to their widespread reach, ability to offer discounts, and the availability of a variety of packaged food options under one roof. These outlets have become increasingly popular as they cater to the needs of urban consumers who seek both variety and convenience.

India Packages Food Market Competitive Landscape

The market is highly competitive, with several key players dominating the landscape. These companies leverage strong brand recognition, extensive distribution networks, and continuous product innovation to maintain their market positions.

Company Name

Established

Headquarters

Key Product Portfolio

Revenue (USD Bn)

Market Share (%)

Distribution Reach

Sustainability Initiatives

Recent Developments

Nestle India Ltd

1961

Gurgaon, Haryana

Britannia Industries Ltd

1892

Kolkata, West Bengal

ITC Limited

1910

Kolkata, West Bengal

Hindustan Foods Ltd

1984

Mumbai, Maharashtra

Parle Products Pvt Ltd

1929

Mumbai, Maharashtra

India Packages Food Market Analysis

Market Growth Drivers

Increasing Health- Consciousness Among Consumers: In 2024, over 250 million Indian consumers are shifting towards healthier packaged food options, driven by rising concerns over lifestyle diseases such as diabetes and obesity. This trend is particularly evident in the demand for low-sugar, low-fat, and organic products, which are gaining traction in urban and rural markets alike. The Indian packaged food sector is seeing an influx of new product launches tailored to these preferences.

Expanding E-commerce Penetration in Rural and Tier-2, Tier-3 Cities: The growth of e-commerce platforms has given packaged food brands unprecedented access to a broader consumer base across India. In 2024, it is estimated that over 120 million rural households are engaging with e-commerce platforms, helping packaged food products reach previously untapped markets.

Favorable Government Policies Promoting Food Processing: The Government of India's Pradhan Mantri Kisan Sampada Yojana (PMKSY), with an investment outlay of INR 6,000 crore, is a key growth driver for the packaged food industry. By 2024, it is expected that the food processing capacity will increase by 200% under this scheme.

Market Challenges

Stringent Food Safety Regulations: With the Food Safety and Standards Authority of India (FSSAI) introducing more stringent labeling and food safety standards in 2024, packaged food companies face challenges in compliance. Over 200 companies have been fined or issued notices for failing to meet new packaging standards regarding nutritional content, ingredient lists, and safety certifications.

High Competition from Unorganized Sector: Despite the growth of organized packaged food brands, the unorganized sector continues to dominate, with local brands holding over 40% of the market share in 2024. Small and regional players, operating with lower overheads and reduced marketing costs, often offer products at significantly lower prices compared to larger companies.

India Packages Food Market Future Outlook

Over the next five years, the India Packaged Food industry is expected to experience sustained growth, driven by increasing demand for convenience foods, expanding urbanization, and the rise of e-commerce.

Future Market Opportunities

Expansion of Private Label Packaged Foods: The next five years will see a rise in the sale of private-label packaged food products, especially through large e-commerce platforms like Amazon and Flipkart. By 2029, private label sales in the packaged food market are expected to reach INR 50,000 crore, driven by competitive pricing and growing consumer trust in retailer-owned brands.

Growth in Plant- Based Packaged Foods: The plant-based food movement is projected to gain substantial traction in India over the next five years, with an estimated 20 million Indian consumers incorporating plant-based packaged food products into their diets by 2029.
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