Cold Chain market to reach of $ 293 bn by 2023

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Cold Chain market to reach of $ 293 bn by 2023

The cold chain market is estimated to account for a value of USD 203 billion in 2018 and is projected to grow at a CAGR of 7.6% from 2018, to reach a value of USD 293 billion by 2023. The rise in consumer demand for perishable food items, growth of international trade due to trade liberalisation, and expansion of the organized food retail industry are some of the factors driving the growth of the market. Government support for infrastructural development in several developing regions also fuels the growth of this industry. Globalisation has increased due to trade liberalisation, advancements in transport infrastructure and communication technologies, and growth of multinational companies in the food retail sector. It has boosted international trade in perishable foods such as dairy and frozen desserts, fruits and vegetables, meat, fish and seafood, and bakery and confectionery products. Every region or country exports food and agricultural products that it produces and imports food products that it is deficient in. This has resulted in almost any fruit, vegetable, or processed food is available at local supermarkets all the year-round.

Several forces drive and enhance the trend of perishable commodities trade at the global level. The lowering of tariffs and nontariff barriers to international trade has encouraged rapid growth of a cross-border movement of perishable commodities. Growth of international trade in perishable foods is affected by the following factors: Ensuring food quality and safety by preventing premature expiry, decay, and spoilage are major priorities for manufacturers, retailers, and consumers. To achieve this, it has become necessary for service providers to invest in modern cold storage facilities, advanced vehicles, and system technologies. In emerging economies, the annual operating costs for cold chain businesses are much higher, per cubic foot. Energy expenses alone account for about 30 per cent of the total expenses of the cold chain industry. The entry barriers in the industry are, therefore, high. In these countries, power deficit is another concern, as this is such an energy-intensive sector. Small players cannot invest in energy back-up systems because capital investment costs escalate.

The cold chain market has been segmented, by type, into refrigerated storage and refrigerated transport. Refrigerated storage capacities are growing in Asia Pacific countries due to the increased need to reduce wastage of perishable foods. In the last few years, the market for refrigerated storage has drastically grown, with a shift from food products stored in cold storage warehouses to the provision of value-added services to customers. A cold chain for chilled and frozen foods provides uninterrupted handling of the products within a low-temperature environment during each stage of the value chain—including harvest, collection, packing, processing, storage, transport, and marketing—until it reaches the final consumer. By temperature type, the frozen segment is estimated to have a comparatively larger market share in 2018. The chilled segment is expected to grow due to a large-scale chilling of food products for their preservation and to extend their shelf lives from few days to few weeks. The cold chain market has been segmented, on the basis of application, into fruits & vegetables; bakery & confectionery products; dairy & frozen desserts; fish, meat, and seafood products; and others. Dairy & frozen desserts are witnessing high demand due to economic growth, rapid urbanization, and the use of sophisticated marketing channels, which have led to significant changes in dietary patterns. Frozen fruits & vegetables are often available in easy-to-open re-sealable packaging, which allows longer storage and portion control without wastage.

The European region is estimated to account for the largest share, in terms of value, in the global market. There is a steady increase in demand, particularly, for cold chain due to a continuous increase in domestic consumption of high-quality perishable commodities. The Asia Pacific shows significant growth potential for the cold chain industry due to the increase in awareness about the prevention of food wastage before consumption, growth of the organized retail sector, rise in consumer demand for perishable foods, and government support & initiatives in this sector. The region is projected to surpass the size of the European market by 2023.

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