According to a new analysis by investment banking services firm Avendus Capital, India has the world's fastest-growing health foods market, which is expected to expand to $30 billion by 2026.
According to the report, the number of health-conscious consumers in India will rise from 108 million in 2020 to 176 million in 2026, with plenty of room for expansion due to low health food penetration as a percentage of total packaged foods and beverages, which stands at 11% in India compared to 31% in the US.
The report also stated that the country is experiencing a wave of health-conscious consumers, which is causing a structural shift in food preferences and purchase decisions. Significant growth is expected across categories, with healthy snacking leading the way.
"Many health food companies have attracted private equity capital in the recent decade." "We expect to see increased transaction activity and consolidation over the next 10 years as such businesses achieve acceptable scale," said Avendus Capital executive director Abha Agarwal.
According to the analysis, by 2026, per capita, spending on healthy foods will have increased by double. It goes on to say that market growth would be fueled by a number of causes, including millennials' preference for functional and healthful ingredients, rising disposable incomes, and increased e-commerce penetration, which will result in better last-mile delivery.
The valuation of health foods companies was greater than regular companies, according to Avendus Capital vice president Saloni Jain.
The report has pointed out that the US health food market witnessed an inflection point since 2015 in mergers and acquisitions. The report also stated that a similar trend could follow in India with the significant merger in the upcoming decade.
By 2026, global health and wellness are likely to be a $1.1 trillion market powered by the advent of natural, organic, functional, and plant-based food products, says the report.
