How Consumer Research, Feasibility Studies and Market Analysis can help India’s Growing Branded F&B Businesses

The food and beverage (F&B) industry in India has been experiencing remarkable expansion. The branded café, bakery, and smoothie bar cluster was valued at USD 697 million in 2024, as per The India Watch Analysis. This market has grown at a CAGR of 25.6%, demonstrating its perseverance and growing significance to urban lives. Furthermore, within India's larger QSR ecosystem, the organized tea café sector is establishing a vibrant niche for itself. This vertical exhibited a strong 24% compound annual growth rate during the previous five years, reaching USD 103.7 million in 2024. By 2028, the market will reach a size of over USD 244 million, solidifying its standing as one of the most attractive investment possibilities in the F&B industry.

Strong macroeconomic and demographic factors are impacting these growth trends. With a median age of only 29, India's youthful customer base is changing the country's eating-out culture. Other factors contributing to this trend include growing disposable incomes, fast urbanization, the growing desire for upscale lifestyles and look out for trendy spaces that can facilitate meaningful conversation. 

In Tier 1 cities, what was formerly seen as a luxury is now a common consumption pattern that is swiftly expanding into Tier 2 and Tier 3 cities as well. Coffee shops, bakeries, QSRs, smoothie bars, and tea lounges are no longer confined to niche markets. They have now transformed into an essential part of the contemporary Indian consumer culture, reflecting changes in lifestyle preferences and socioeconomic trends.

  

Growth Drivers & Emerging Trends Powering the Indian F&B Boom:

ØThe café and QSR cultures are propelled by the rapid urbanization of places like Bangalore, Hyderabad, Pune and Delhi NCR. Consumers are spending more on QSRs, social gatherings, and fine dining. This macro trend creates fertile ground for scalable and branded F&B ventures.

ØGen Z and Millennials are impacting demand in a variety of F&B sectors. They appreciate immersive experiences and explore a diverse range of cuisines. This makes them the most important consumer base for emerging companies.

 ØPlatforms like Swiggy and Zomato have made a variety of culinary alternatives more accessible to everybody. QSR businesses and cafés further utilize these platforms for targeted marketing, discoverability, and delivery. Additionally, user-generated content and influencer marketing also play a crucial role in influencing eating preferences.

 ØCustomers are increasingly choosing branded, structured establishments that prioritize cleanliness, reliability, and regularity. Because of this, organized businesses with consistent supply chains and expert management are better positioned to take a greater share of the quickly expanding F&B sector.

ØInternational cuisines such as burgers, wraps and patisseries are being tailored to Indian preferences via fusion recipes and regional ingredients. For instance, masala croissants and spicy paneer burgers are becoming very popular. This combination of local relevance and global presentation appeals to a broad range of customers.

Ø Fast and portable meal alternatives are valued by people who lead more hectic lives. Both professionals and students looking for quickness without sacrificing quality are drawn to cafés and QSRs that provide ready-to-eat meals, takeout counters, and express service styles.

Top 5 Lucrative Emerging Verticals in the Indian F&B Landscape:

I. Coffee Cafés:  Within the structured food and beverage (F&B) sector, the coffee café category in India has become one of the most vibrant verticals. In 2024, the nation had ~2,650 branded coffee houses, according to The India Watch. The market is valued at USD 339 million and has grown at a remarkable CAGR of 41.6% over the past few years. Coffee chains are increasingly seen as "third place" locations where students and young professionals socialize, work, or relax. The industry is also developing because of the rising desire for premium experiences, artisanal roasting, and specialty brews. Aspiring customers are increasingly looking for contemporary café experiences in Tier 2 and Tier 3 cities, demonstrating burgeoning opportunities in the region. Various untapped potential might be further unlocked by innovative formats like hybrid cloud cum café models, single-origin coffees, and immersive brewing techniques.

II. Bakery Shops: The bakery and pastry market are transitioning from unstructured small businesses to sophisticated, branded, and sanitary models. Currently, there are more than 2,000 organized bakeries in India, with popular brands like Bakingo, 7th Heaven, Sugar & Spice and Theobroma in the forefront. Birthdays, anniversaries, festivals, and business gifts have all contributed to the category's celebration-driven demand. Additionally, bakeries are becoming increasingly associated with hygienic practices, visual appeal, and lifestyle luxury among urban customers. This is making room for specialty products like vegan, gluten-free, and fusion baked goods. Additionally, marketers are using experiential storefronts with seasonal menus, themed décor, and live baking stations to stand out in a crowded market. It has been projected that bakeries and pastry shops would become increasingly vital in India's changing F&B consumption paradigm.

III. Burgers, Sandwiches & Wraps: The organized food service sector in India continues to depend on QSRs, with burgers, sandwiches, and wraps being its most popular formats. Nearly 14% of India's organized QSR business is made up of categories focused on meat and burgers. Global giants like McDonald's, KFC, and Burger King presently dominate the market, along with rapidly growing Indian companies like Wat-a-Burger and Burger Singh. The category attracts customers because of its affordable prices, ease of use, and convenient delivery options. But now the competition emphasizes innovation as much as pricing. Additionally, healthy menus with multigrain breads and fusion dishes like paneer tikka wraps, masala-spiced burgers, and delivery-first kitchen models are gaining popularity. This F&B vertical continues to present strong investment opportunities as it grows outside of urban areas.

IV. Tea Cafés: India's café culture was earlier dominated by coffee shops, but the emergence of tea cafés has transformed the landscape. India's most popular beverage remains tea, and its commercial potential has been unleashed by the contemporary café style. According to India Watch, the organized tea café industry is expected to develop at a CAGR approaching 25%. The market generated a revenue of USD 103.7 million in 2024 and is expected to reach USD 244 million by 2028. With Chaayos, Chai Point, Tea Post, and Chai Sutta Bar in the forefront, the category has now surpassed 1,200 branded stores. The market dynamics vary by region. 

For instance, Bangalore alone is valued at USD 11.8 million in 2024, whereas Delhi NCR leads with a USD 18.8 million market. Furthermore, customers are attracted to tea cafés for wellness-focused teas, bubble teas, and herbal infusions. Other opportunities include omni-channel tactics combining cafés, vending machines, and corporate catering. 

V. Smoothies & Juices: The smoothies and juices category is one of the fastest-expanding verticals in recent years, especially among urban millennials. Customers are increasingly selecting smoothies and juices as wholesome and rejuvenating substitutes for carbonated beverages. This demand is further driven by growing health consciousness, functional nutrition and the gym/fitness culture. Although the vertical is still in its early stages, the market is expanding quickly in Tier 1 cities and metro areas, particularly as wellness-focused lifestyles gain popularity. There are several opportunities in functional drinks, including fruit-superfood mixes, detox juices, and smoothies that promote immunity. Direct-to-consumer subscription packages for workplaces and residential communities are another trend that many firms are experimenting with. Smoothies and juices are anticipated to become a lucrative sector in the F&B industry 

Why Enter the F&B Sector of India and How The India Watch Can Help?

 

Why Now?

ü The F&B sector is scaling quickly, with organized formats growing at a double-digit CAGR.

ü Urban consumers are shifting towards premium, experiential, and health-focused dining.

ü Institutional investors are backing café and QSR chains, validating long-term growth potential.

  

How The India Watch Helps:

ü Market Sizing & Feasibility Studies, which include identifying demand, TAM, growth hotspots, and various other key factors.

ü Competitive Landscape Analysis in spotting gaps and white spaces in crowded markets.

ü Business Plan Development for investor-friendly blueprints with robust projections.

ü Consumer Behaviour & Trend Forecasting to predict shifting preferences in health, wellness, and experience-driven dining.

ü Location Strategy & Expansion Planning, along with pinpointing profitable cities, malls, and micro-markets.

Partner with The India Watch for a strategic roadmap to success in India’s booming food and beverage landscape. For further enquiries, contact us at info@theindiawatch.com