Evolving landscape of India’s FoodTech industry

The food tech industry in India has undergone significant changes in recent years, and the pace of change is expected to continue in 2023 and beyond. One of the major drivers leading this transformation is the rapid adoption of technology. With the proliferation of smartphones and the increasing availability of affordable internet access, consumers are increasingly using online platforms to order food and groceries on the go. This has led to the growth of food delivery and grocery delivery apps, which have become a ubiquitous part of urban life in India.

Let us look at some of the technology and consumer preference changes that lead to newer business models emerging in food technology.

Online Platforms and Apps for Food and Grocery Delivery

The rise of online platforms and apps for food and grocery delivery has created new opportunities for businesses to reach customers and has changed the way consumers buy and consume food in India. Popular apps such as Zomato, Swiggy, Big Basket, and Dunzo have become household names, providing convenient access to a variety of food and grocery products. In addition to these apps, there are several other players in the market, such as Licious, Blinkit, Zepto, and more. These platforms and apps have not only made it easier for consumers to order food and groceries, but they have also led to the growth of the gig economy in India, with many delivery partners earning a living through these platforms.

Automation and Robotics in Food Production and Distribution

Beyond online ordering and delivery, other technological advancements, such as the use of robotics and automation in cold chains, food processing, and packaging, are also gaining ground in the industry. These technologies can help improve the efficiency of food production and distribution, reduce waste, and enhance the quality and safety of food products delivered. With a growing focus on sustainability, these technologies can also help reduce the environmental impact of the food industry.

Shifting Consumer Preferences

Consumer preferences are shifting towards healthier and more convenient food options, leading to the emergence of new business models in the food tech industry in India. Plant-based alternatives are gaining popularity due to increasing awareness about the environmental impact of meat consumption, leading to the growth of companies such as One Good and EVO Foods. The demand for healthier snack options has also led to the emergence of several startups offering snacks made from natural and organic ingredients, such as The Green Snack Co.

New Business Models

In India, the food tech industry is seeing the rise of new business models that are disrupting traditional ones due to technology adoption and changing consumer preferences. These models include cloud kitchens, subscriptions, and online marketplaces.

Cloud kitchens are kitchen facilities that operate solely for fulfilling online/app delivery orders without a physical storefront. We expect more cloud kitchens to be established in 2023, especially in urban areas with high demand for food delivery. Rebel Foods pioneered this trend, and several specialized players are creating differentiated brands and offerings, targeting specific demographics and needs while production/delivery/integration is standardized.

Online marketplaces are platforms, that connect consumers with food vendors, including restaurants, cloud kitchens, and home chefs. We expect more of these to be established in tier 2 and tier 3 cities in 2023, where there is a growing demand for food delivery. Beyond Zomato and Swiggy, there is room for more players to emerge and potentially dominate this space.

Subscription-based food/meal delivery services offer personalized meal plans based on dietary preferences and restrictions. The concept is gaining traction in India as more people opt for healthy and convenient meal options due to their busy lifestyles. These services deliver meals to the customer's doorstep daily or weekly. Specific demographics can be covered based on nutrition needs by condition (like low sugar/salt, gluten-free, high protein) or life stage (like early pregnancy, losing weight in middle age). Such subscriptions can potentially compensate for the lack of social support for the rising proportion of nuclear families, especially in urban areas.

In conclusion, the food tech industry in India is undergoing rapid transformation, driven by the adoption of technology and changing consumer preferences. With the increasing demand for convenience and healthy meal options, we can expect to see continued growth in cloud kitchens, online marketplaces, and subscription-based food services. These emerging business models are disrupting traditional models and creating new opportunities for entrepreneurs and investors alike. However, it is important to note that the industry is still evolving, and there are challenges to be overcome, such as ensuring food safety and quality, managing supply chain logistics, and addressing the regulatory environment. Nevertheless, the food tech industry in India has significant potential and is poised for continued growth in the coming years.