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Home cooking declining among India's urban elite; jump in dining out, ordering food

Recent data from the Ministry of Statistics and Programme Implementation (MOSPI) and ICICI Securities reveals a significant shift in food consumption patterns among urban households in India. Urban elite households are allocating nearly half of their monthly food budget to packaged food, dining out, and food delivery services, marking a considerable increase from a decade ago.

Home cooking declining among India's urban elite; jump in dining out, ordering food
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First Published Apr 10, 2024, 1:42 PM IST

A notable shift in food consumption patterns among urban elite households has emerged, with nearly half of their monthly food budget allocated to packaged food, dining out, and food delivery services in Fiscal Year 2023 (FY23). This marks a significant increase from 10 years ago, when such spending accounted for 41.2 per cent, according to data sourced from the Ministry of Statistics and Programme Implementation (MOSPI) and ICICI Securities.

The data reveals a distinct decline in home cooking practices among Indians over the past decade, with a corresponding rise in expenditure on dining out and purchasing processed foods. Experts anticipate this trend to further escalate, fueled by the proliferation of rapid commerce and food delivery applications, rising incomes, and evolving culinary preferences, as reported by the Economic Times (ET).

Paras Jasrai, a senior analyst at India Ratings and Research, noted that the surge in processed food consumption aligns with the increasing popularity of food delivery and quick commerce apps, coupled with upward income mobility among households.

Analysis of the data indicates a substantial increase in spending on processed food by both urban elite and middle-income consumers. Notably, middle-income households witnessed a surge in spending on processed food and beverages, accounting for nearly 25 per cent of their food budget, compared to 16 per cent a decade ago.

Madan Sabnavis, chief economist at Bank of Baroda, highlighted that the growing spending power of the middle class, alongside the rise in dual-income households, is driving demand for processed food. He also underscored the potential growth opportunities in innovative food products like low-sugar and organic options.

The ICICI Securities report further revealed a reduction in staple food spending among the top 5 per cent of urban households, indicating a shift away from traditional kitchen practices. Urban elite households are now allocating a significant portion of their food budget towards food delivery services, with per capita spending reaching Rs 971 per month in FY23.

B Krishna Rao, senior category head at Parle Products, attributed the surge in processed food demand to urban households' preference for branded packaged ingredients over plain staples. He noted that even emerging trends like millet-based food fall within the category of processed food.

Additionally, Mospi's data highlighted a rise in spending on dry fruits among urban and rural households, signalling increasing incomes and aspirational consumption patterns among Indian consumers.

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