The Indian cold chain industry is expected to grow at a CAGR of 14-15%, reaching INR 1,425.49 billion by 2026, according to an IMARC Group report. It has witnessed a surge in recent years owing to the escalated demand, and is working toward becoming more efficient – developing proper storage as well as transport infrastructure to ensure there are no temperature breaks and minimum wastage. Each year, as the temperatures rise, the demand for efficient cold storage systems is amplified by temperature sensitive products. In our cover story this month, we take a look at how service providers gear up for the upcoming season in light of new developments in infrastructure and technology.
As per the IMARC report, India is currently the world’s largest producer of milk, second largest producer of fruits and vegetables and has a substantial production of marine, meat and poultry products. Most of these products are temperature sensitive and require specific temperature ranges to be stored and transported. This has resulted in the establishment of a very large cold chain infrastructure in the country.
The demand for cold chain in India has also intensified over the years, especially due to the post pandemic demand from pharma sector. The changing consumer behavior and the growing demand for frozen food products due to urbanization and western influences on food patterns are driving factors of this demand.
Though the global demand for cold chain is now, as such, a 365 days concept, there is still a specific period of time, especially in India, when this demand jibes itself with the surging heat.
With temperatures reaching up to 45-degree Celsius, it becomes a daunting task to manage transportation of items that require cold temperatures. The heat presents additional hurdles and it becomes critical to follow the ‘all hands on deck’ strategy, requiring everyone from first to last mile to be in perfect sync and coordination.
Bijay Mishra, Business Head (Cold Chain) at AVG logistics explains how climatic changes bring with them a seasonal fluctuation in demand for cold chain. “As we know climatic conditions in India vary across all four zones (North, South, East & West). In summer due to high ambient temperature (April-Oct), cold chain demand reaches to peak with slight fluctuation during the period. So, during this period we have to ensure 100% utilization of cold chain equipment to save the temperature sensitive perishables. In winter (Nov-Feb) cold chain demand reduces, especially in North & East due to low ambient temperature, hence, almost 30% to 40% lower utilization of cold chain equipment specially for perishables which demand i.e. +10 deg. C to +20 deg. C.
Similarly, Ryan Viegas, Independent Management Consultant (Pharma and Healthcare) at Delhivery says that even in cold chain, the temperature requirements cannot be generalised – “Some products are sensitive to temperatures outside a particular range and could change the efficacy and texture of the product. In addition to this, the demand for products requiring cold chain increases substantially during summer months, for example, ice creams, perishable and processed foods, dairy and agricultural products.”
“The essence of cold chain is to make the seasonal product available throughout the year. The need for cold chain in different industry segment varies as per the season. Like, during the summers, people tend to enjoy more ice creams, resulting into a season for ice cream industry during summers. During the festive season, in last two quarters, the QSRs and confectionery industry has more demands. Another aspect of seasonal cold chain facilities demand is the catch in case of seafood industry. If the catch is good, the demand for storage will increase. The major factor for the seasonal demand is consumption. Consumption drives the Cold Chain facilities requirements.” adds Sanjay Sharma, Chief Operating Officer at Coldman Logistics tying consumption and demand.
Swarup Bose, Founder and CEO, Celcius says – “A major pain point of the cold chain industry is the deficit in availability of reefer trucks and warehouse storage facilities. While the numbers have improved in the recent years, there is more room for growth. Reefer trucks and the storage facilities in India, struggle to meet the market demands and a major contributing factor to this is the fragmented distribution approach of the cold supply chain industry.”
This is an abridged version of the original cover story that was published in the May 2022 edition of the Logistics Insider magazine. To read the complete article, click here.