Rising disposable income, health-oriented spending are likely to assist in the growth
Avendus Capital, India’s premier Investment Banking franchise, launched a thought paper on India’s health food market. Estimating a market size of $30 billion in the next five years, the study indicates that India is the fastest-growing health food market expanding at 20per cent CAGR, which is 3x the global average and 1.5x India’s total packaged F&B market.
According to the study, India is experiencing a wave of health-conscious consumers influencing a structural shift in food preferences and purchase decisions towards healthy alternatives and better ingredients, especially among millennials and their families. It estimates that there will be a 2x increase in per capita spending on healthy food by 2026.
Market expansion in India will be driven by multiple levers. Indian consumers, especially millennials, are on the lookout for functional and healthy ingredients, driving innovation into new food categories such as plant-based alternatives. With rising disposable income, health-oriented spending is taking up a larger wallet share. On the supply side, with rising e-commerce penetration, digital has become a means for product discovery and purchase, allowing many new health food brands to emerge. Large F&B companies are evaluating organic and inorganic growth strategies to capture this market.