Published Report | EVERSTONE

India’s GDP per capita is one-sixteenth that of high-income economies, yet per capita food consumption is only one-fifth. We expect India’s food market to nearly double to $427bn over the next decade, making it the third largest food market globally by 2025, up from fifth place currently.

While India’s consumption levels are catching up quickly to other countries, the food basket reflects two extremes: at one end, convergence with global food patterns; while at the other end, deepening traditional taste preferences. For example, we expect that processed foods and pulses will not only co-exist, but both will be the fastest growing segments over the next decade.

In this paper, we map India’s detailed food consumption patterns out to 2025. We expect India’s food market to grow at 5.1% yoy in real terms through 2025-26. At the state level, Uttar Pradesh, Maharashtra, Andhra Pradesh and Tamil Nadu account for 40% of overall food consumption, while the largest urban markets are in Maharashtra, Tamil Nadu and Gujarat.

One of the paradoxes in India’s food debate is that while spending on food is rising, average caloric intake is not improving significantly. A major cause is that Indian consumers are moving rapidly towards more expensive calories in value-added food categories. Added to this, Indian households choose to purchase discretionary assets such as mobile phones or spend on festivals before raising caloric levels to basic nourishment levels. India is a case in point that increases in income per capita alone do not translate into improved nutrition levels; awareness about health outcomes, for example, also plays a significant role in evolving consumption patterns.