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India's Snack Market to Grow 13% Annually, Outpacing Packaged Food

The Indian savoury snacks market is forecast to grow at a 13% compound annual rate over the next three years, outperforming the broader packaged food industry. This growth is fueled by rising rural access to branded products, strong cultural affinity for ethnic snacks, and increasing urbanisation. Modern trade and digital channels are expanding faster than traditional formats, while policy measures like potential GST reductions could accelerate the shift to the organised sector. With nearly 43% of the market still unorganised, significant expansion potential remains for branded players.

Key Points: India's Savoury Snacks Market to Grow 13% CAGR: Report

  • 13% CAGR growth for snacks vs 11% for packaged food
  • 43% market still unorganised, room for expansion
  • Ethnic snacks to outpace western snacks growth
  • Growth driven by rural access, urbanisation, and policy support
2 min read

India's snacks market to grow at 13% rate over next 3 years, faster than packaged food: Report

India's savoury snacks market is projected to grow at 13% CAGR, faster than packaged food, driven by rural demand and ethnic snacks.

"Improving income levels, better infrastructure and rising media penetration are enhancing awareness and access to branded products in rural India - Ashika Institutional Equities Report"

New Delhi, April 2

The savoury snacks market in the country is expected to register a growth of around 13 per cent CAGR over the next three years and outperform the broader packaged food industry, according to a report by Ashika Institutional Equities.

The report noted that the Indian savoury snacks market, estimated at around Rs 748 billion in FY24, is projected to grow at approximately 13.0 per cent CAGR over FY24-FY29E, higher than the broader packaged foods industry, which is expected to grow at around 11 per cent.

It stated that the reason of this growth is the "Improving income levels, better infrastructure and rising media penetration are enhancing awareness and access to branded products in rural India".

The report highlighted that nearly 43 per cent of the market is still unorganised, indicating significant room for expansion in the organised segment.

While western snacks currently dominate market share, ethnic snacks are expected to grow at a faster pace, with a CAGR higher by around 100-200 basis points. This growth is supported by strong regional preferences and cultural affinity among consumers.

The report also pointed out that the snacks category continues to be driven by low price points of Rs 5-Rs 10, reflecting high dependence on impulse-driven consumption, especially in rural markets.

On the distribution front, modern trade and digital channels are growing significantly faster than traditional general trade formats, driven by rapid digitisation and changing consumer preferences.

Urbanisation is also playing a key role in shaping consumption patterns. The urban population is expected to increase from around 36.8 per cent in CY24 to 40.9 per cent by CY30, leading to higher demand for convenient, ready-to-consume food products.

The shift towards nuclear families and increasing participation of women in the workforce is further boosting demand for such products.

Policy support is also expected to aid growth. A reduction in GST rates from 12 per cent to 5 per cent on packaged snacks could accelerate the shift from the unorganised to the organised sector.

Additionally, initiatives such as the Production-Linked Incentive (PLI) scheme and Mega Food Parks are improving supply chain efficiency and encouraging capacity expansion.

The report added that organised snacks, which currently account for around 57 per cent of the market, are gaining share rapidly, with ethnic snacks expected to outgrow western snacks due to strong consumer connect and regional demand.

- ANI

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Reader Comments

R
Rohit P
While the growth is impressive, I hope this doesn't mean the end of the local, unorganised vendors. The taste of fresh, homemade-style namkeen from the neighbourhood shop is unbeatable. Organised brands need to maintain that authenticity.
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Aman W
The Rs 5-10 price point is key. In smaller towns, that's what drives sales. If GST is reduced to 5%, it will be a game-changer. More people will switch from loose items to hygienic, packaged options. Good move.
S
Sarah B
Interesting read. The shift to nuclear families and more working women is a global trend, but it's fascinating to see how it's specifically boosting demand for traditional Indian snacks in a convenient format. The regional focus makes sense.
K
Karthik V
Modern trade and digital growth faster than general trade? That's the real story. We order snacks online all the time now, especially during offers. Blinkit and Zepto deliveries are full of these packs. Convenience is king.
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Nisha Z
I appreciate the report, but a word of caution. With this growth, I hope there is equal focus on nutritional standards and reducing excessive salt, oil, and preservatives. Health should not be compromised for convenience.

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