Is India's Convenience Food Market the Next Big Bet for Food Entrepreneurs? India's addressable consumer base for convenient foods has grown from 50 million to nearly 80 million in two years, driven by urbanization and quick commerce expansion

India's convenience food market is emerging as a major opportunity for food entrepreneurs. As urban lifestyles evolve and consumers seek quick yet healthy meal options, demand for ready-to-eat (RTE) and ready-to-cook (RTC) products is rising sharply. An October 2025 Redseer report describes it as "the most promising yet underpenetrated consumption opportunity of the decade."

However, while consumer interest has never been higher, investor confidence has turned cautious.

Neha Singh, Co-founder of Tracxn, explained, "From our data, investor sentiment toward India's convenience food market has seen ebbs and flows. The RTE category, which was once the hotbed of activity, peaked in 2021 with approximately USD 73.7 million raised across six funding rounds. However, investor enthusiasm has since waned sharply."

In 2024, startups raised just USD 309,000 in the segment, recording an 81 per cent drop from the previous year. "So far in 2025, the space has attracted only about USD 940,000 in funding, indicating that investor caution persists as players struggle with innovation and distribution challenges in a highly competitive market," she adds.

An Untapped Opportunity

According to Redseer's report 'The Ready-to-Eat Opportunity: Decoding India's Convenience × Health Pivot', India's addressable consumer base for convenient foods has grown from 50 million to nearly 80 million in two years, driven by urbanization and quick commerce expansion. Yet, fewer than 15 per cent of these consumers use such products regularly.

Singh believes the opportunity remains strong. "The convenience food opportunity remains strong from a consumer perspective, but investors are becoming far more selective, favoring differentiated propositions and sustainable business models over broad category bets," she says.

Griffith David, Founder and CEO of Habanero Foods, adds, "Over the last couple of years, we've seen Indian consumers move from occasional convenience to habitual convenience. It's no longer just about saving time — people now want food that's easy, tasty, and feels good for their bodies."

Health, he says, has become the biggest driver of purchase decisions. "We're seeing strong demand for beetroot, spinach, multigrain, and tomato tortillas, products where consumers feel they're making a healthier choice while still enjoying global flavors. The new Indian consumer doesn't want to compromise on taste or health; they want both, and that's where the real opportunity lies."

Redseer notes that many non-users still perceive RTE foods as "unhealthy" or "not fresh," which limits the frequency of consumption. Brands are responding with cleaner formulations and transparency.

"Trust defines the RTE category. Our approach has been to minimize processing and maximize transparency. Consumers today read labels carefully; they know what they're buying," says David.

Evolving Sector

India's convenience food journey has evolved from instant noodles and soup mixes in the 1980s to ready-to-cook gravies in the 2000s, and now to a new era of premium, diversified ready-to-eat offerings.

Redseer cites the "batters" segment, including dosa and idli mixes valued at around INR 3,000 crore in 2024, as one of the early success stories.

Consumers, especially young professionals and students, increasingly want homestyle options without compromising on health and quality.

ZOFF Foods, which recently entered the RTC market with 5-minute gravies, said the focus should be on ensuring that convenience doesn't come at the cost of taste. "Innovation begins at the ingredient level. Our foundation lies in Cold Grinding Technology, which retains the natural oils, aroma, and nutrition of spices. When it comes to format, we've introduced single-use, pre-measured packs that make cooking quick and hassle-free while ensuring hygiene and freshness," said Akash Agrawalla, Co-founder of ZOFF.

Singh notes that RTE startups raised around USD 1.25 million over the past two years. "Some of the fastest-growing subcategories within India's 'convenient eating' segment include trail mix and nuts, healthy D2C food brands, and ready-to-eat meals," she says.

Healthy D2C food brands, Singh adds, raised USD 11 million during the same period, while millet-based, ingredient-forward innovations are gaining ground. Additionally, trail mix and nuts brands alone have raised USD 58.6 million over the last two years.

For brands like Habanero, innovation has been driven by packaging and shelf-life science. "Our biggest breakthrough has been in packaging innovation," says David, adding, "We use advanced vacuum flushing and a nitrogen-carbon dioxide mix that keeps our tortillas fresh for up to six months without the use of artificial preservatives."

Learning from Global Models

Globally, convenience brands have shown how quality, transparency, and packaging innovation can fuel long-term loyalty. Indian startups are beginning to adopt similar principles.

Singh believes "the companies that are likely to scale sustainably in this underpenetrated market are the ones that balance convenience with trust and nutrition by leveraging technology and end-to-end supply chain control."

David echoes this view. "The winners in this space will be the brands that combine convenience with conscience. Scale and margins will come, but the long-term differentiators are going to be trust and product consistency."

"In the next five years, the biggest differentiator for brands in this category will be consumer trust and product authenticity. Scale and profitability will naturally follow for those who deliver consistent quality and transparency," added ZOFF's Agrawalla.

Road Ahead

According to IMARC Group, India's RTE food market was valued at around USD 5.75 billion in 2024 and is expected to double by 2033, reflecting strong and sustained demand for convenient meal solutions. Globally, the segment is worth over USD 190 billion and is expected to cross USD 400 billion by 2034. Despite this, Redseer notes that RTE products still account for just 5 per cent of offline food retail sales in India.

For entrepreneurs, this mix of promise and under-penetration spells opportunity. As Singh explains, "Metrics like customer retention and the ability to expand into multiple regions, especially Tier 2 and Tier 3 cities using digital channels, are signs of long-term viability. Startups that can innovate rapidly and build trust will define the next phase of growth."