In India, the craze of ‘eating at home’ is increasing more than ‘eating out’. According to the latest report of Redseer Strategy Consultants, the country’s food services market is currently worth Rs 8.5 lakh crore, which will increase to about Rs 14.3 lakh crore by 2030. The most interesting thing about all this growth is that there is no longer a need to open luxurious restaurants to make profits. The speed of online food delivery is about two and a half times faster than offline. Cloud kitchen model (only online delivery based kitchen with no seating arrangement) is currently proving to be the biggest ‘game changer’ and profit machine for the food industry. Food delivery: Orders increased 3 times in small cities; Cloud Kitchen earns 90% from online The share of online delivery in the total market increased from 4% in FY 2021 to 11% in 2026. It is estimated to increase to 18% by 2031. New cloud kitchen brands earn 90% of their revenue from online channels, while restaurants account for only 50%. This trend has reached small cities. Between 2021-26, orders in metro cities have increased from 30 crore to 106 crore, while in Tier-2, smaller cities, they have increased 3 times from 6 crore to 18 crore. Low Cost Play: The 3-Step Secret Playbook of Brands Like Rebel Foods and Bakingo 1. Shared Infrastructure: Opening shared kitchens in back streets instead of expensive showrooms, which reduces fixed costs. Like Rebel Foods, Bakingo. 2. Focused Menu: Instead of having 50 items on the menu, having only selected items. This prevents wastage of raw materials and increases the speed of the kitchen. Like The Belgian Waffle. 3. Premium Positioning: Positioning itself in healthy or premium categories, so that customers are willing to pay higher prices. Tea, Coffee and Snacks: Rs 4.2 lakh crore for cloud kitchen. Apart from lunch-dinner becoming the new hotspot, there is huge potential for cloud kitchens in the evening snacks and beverages segment. Snacks-Desert: The market of snacks is worth Rs 1.9 lakh crore, that of desserts/beverages is worth Rs 2.3 lakh crore. Shakes and juices are becoming popular evening snacks available for delivery. Premiumization in Coffee: Out-of-home coffee market will be worth ~38 thousand crores by 2030. In this, the mid-segment (₹~100-~200) has the fastest growth of 35-40% annually. Premium Tea Even though 97% of the market in tea is sub-₹20 tapri, the segment of premium tea priced above ₹100 is growing at a pace of 20-25% annually. Where is the challenge? The gross margin of big tea-coffee brands is 62-67%, but due to large store size and high rents, their profit (Ebitda) gets limited to 5-9%. This is where the cloud kitchen model can win, if this premium tea-coffee is sold through the cloud kitchen model, then the profit can double as the rent cost reduces.
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Craze of ‘getting home’ instead of ‘eating out’ in the country: Cloud kitchen becomes profit machine in food market worth Rs 8.5 lakh crore
