Driven by the growth of organised retail coupled with changing consumer habits, food retail sector in India is set to be more than double to USD 150 billion (around Rs 6,70,870 crore) by 2025, according to a report by KPMG.
The country's food retail sector, which is currently estimated at USD 70 billion (around Rs 3,13,137 crore) will be more than double in the next fifteen years, the global audit and advisory firm KPMG said.
"Evolution of innovative food processing capacity, emergence of organised retail and change in consumption patterns along with fast changing demographics and habits is fuelling the next growth trajectory for the food industry in India," KPMG said in a statement.
Despite the potential, the sector has not yet seen sufficient investment, specially foreign direct investment (FDI), the report said.
"The food sector, in spite of its large share of GDP and the consumer basket, only received 3.3 per cent out of the gross FDI flows in India between 2000 and 2010," KPMG Executive Director Ramesh Srinivas said.
High growth in food retail is limited by sub-optimal supply chain caused by low investment in the sector, he added.
Some players such as McDonalds, RK Foodland, Jubilant Food Works (Dominos) have, however, invested in back-end processes, optimised supply chain management, according to KPMG.
"There is also considerable investment in the cold chain industry by multinational corporations and private equity firms," Srinivas added.