Supriya A Oundhakar | Associate Editor
Cold chain markets in India is gaining traction owing to the young working population, rising disposable incomes, growth of the consumers in various socio-economic strata, exposure to new cultures and cuisines, and change in eating habits of families. Current scenario CRISIL Research estimates India’s cold chain industry grossed a cool Rs 30,000-35,000 crore in fiscal 2019. But the pie could be much bigger if more investment was incentivised to minimise the massive wastage in horticulture produce that happens even today. Although India is a global leader in horticulture, postharvest losses are 15-20 per cent of horticulture produce. CRISIL Research estimates that 70 per cent of this wastage stems from a lack of end-to-end cold chain logistics. The report further mentions that temperature-controlled warehouses (TCWs) comprise 85-90 per cent of the overall industry. Of the TCW pie, again, multi-purpose cold storages comprise a dominant 80 per cent. And as of fiscal 2019, over three-fourths of the multi-purpose cold storage volumes came from meat, seafood, dairy, and fruits and vegetables.
Now a predominantly domestic unorganised trade in fruits and vegetables implies this segment incurs higher wastage compared with meat, seafood and dairy. In fact, over three-fourths of horticulture products moved across India is for domestic consumption; the balance is exported. Export of fruits and vegetables face minimal cold chain-related wastage owing to necessary compliance with mandated regulations for overseas movement. Soumen Mukherjee, Senior Vice President, Ice Make Refrigeration observes that cold room and cold storage installation is a highly fragmented business and organised large players contribute to 40-50 per cent of the market share but the lower half of the market is highly fragmented. The cold storage industry is estimated at 1 to 1.5 MMT. “Installed capacity of cold storage in India is growing at approximately 3.7 per cent CAGR. The segment is plagued with many challenges. However, the government is taking the necessary steps to boost the sector,” he adds.
Growth Drivers of Cold Chain
Owing to the rising need of the infrastructure and to reduce wastage, according to a market research report, the cold chain industry in India is forecast to grow at a CAGR of 19 per cent during the period of 2017-2022. Arvind Surange, Chairman-cum-Managing Director, ACR Project Consultants Pvt Ltd mentions the following drivers for growth of the industry:
• Changing demographics, lifestyle patterns and food consumption patterns in urban areas with nuclear family setup leading to increasing demand for processed, chilled, frozen food and beverages
• Rising need for the cold chain facilities to reduce the cold chain infrastructure gap as stated above
• Increasing government initiatives and financial support
• Increasing private sector investments of both domestic and foreign players
• Increasing demand for packaged or canned or frozen or ready-to-eat products
• Increasing interest in the Indian food market and investments from international players like food chains and logistics players
Trends to watch in 2020
According to various marketing research reports, the Indian cold chain logistics market is estimated to be in continuous and rapid growth for the next few years. And in this scenario, it is necessary to preserve the quality of goods during transformation and transport processes. Apart from that, it is necessary to keep a tab on total energy consumption in refrigeration. Therefore, the industry stalwarts feel the need for high-efficiency solutions that will certainly be an important trend in the cold chain industry. Energy saving is always linked to operating cost, where it is easy to calculate the return on investment. “Technology innovation is required in the energy-efficient field – reasons being high operating cost and lower margins of the customer segments. Efficient Ammonia compressor with screw technology is preferred,” states Soumen Mukherjee from Ice Make Refrigeration. Pack houses for enhancing the value of agricultural produce Vikram Murthy, President, ISHRAE opines that pack houses are the apt solution for enhancing the value to the farmers for their agricultural produce. A packed house performs the functions of large-scale sorting, cleaning and dressing, inspecting, packaging, temporary cold store preserving and planned to despatch to locations where enhanced value can be realised and transferred directly to the seller. These packhouses are located close to a collective of farms and then freight operator cooperatives can run the cold chain transport by multi-modal transport to the point of sale. The whole link must be connected by a business that is well encouraged, monitored and regulated to perform efficiently and reliably. Renewable energy to gain traction In order to reduce the carbon footprint, cold chain sector is exploring the use of renewable energy such as solar, biomass, and wind energy. “Even technologies emerging for food processing are such that function in hybridisation manner with cold chain involving minimal processing of its constituents. Cryogenic technology has another dimension for the F&B sector to prolong their life. Trends are changing even in case of regulatory standards and guidelines to facilitate cold chain growth vis-à-vis F&B,” informs Atul Khanna, India Representative, Global Cold Chain Alliance (GCCA).
Energy-saving with variable speed compressors
According to Eason Cheng, CAREL Marketing Manager – Refrigeration, APAC, energy saving of 20-30 per cent by implementing ExVs and variable-speed compressors will be the first step involving well-known actions that can be introduced in cold chain industry. In addition to the implementation of individual components, coordinated management of high-efficiency components to maximise efficiency could be another step to respond to this trend. Communication between the rack controller and cold room controller, integration of the air conditioning system and lighting system, combining the refrigeration system with the building heat recovery system or making the water loop work with the refrigeration system to maximise overall Coefficient of Performance (COP). While talking about maintaining stored products in a safe temperature range, he informs, “Recover cooling capacity will be a hot topic for the cold chain industry. Brushless DC (BLDC) technology with Electronic Expansion Valves (EEVs) could be one answer, as this combination can provide stable refrigerant flow to keep a reliable conservation temperature, and can also give a quick response to dynamic requests, so as to release full cooling capacity in a very short time and fulfil the instant request, such as recovering after a blackout. BLDC inverters can moreover stabilise the power supply to the compressor, avoid compressor start-up in critical condition, reduce maintenance and unexpected failures in the field.”
Use of natural refrigerants
Anuraga Chandra, Head – Cooling Sales, India Region, Danfoss Industries Pvt Ltd stresses on wide adoption of natural refrigerants in most applications. On this, he says, “This comes from a direct lack of knowledge and awareness on safety. There is still a sizeable number of market players that use chlorofluorocarbon (CFC), hydrofluorocarbon (HCF) and hydrochlorofluorocarbon (HCFC) as refrigerants. At Danfoss, we believe natural refrigerants are an environmentally safe alternative to the traditional refrigerants if used with the right safety standards. The evolution within the use of refrigerants within the cold chain and overall HVACR sector is definitely a trend for the year 2020.”
Rising demands of modern customers Cold chain industry is under tremendous pressure to cater to the rising demands of modern consumers. Demand for fresh food is increasing while at the same time, cold chain from farm to fork has gone global. More and more products are introduced in the market which has a shorter shelf life and requires stricter temperature control throughout the cold chain – from the manufacturer, refrigerated warehousing, during transit and at the retail outlets too till the product falls in the hands of the consumers. “Much focus is on maintaining the quality of the product – its texture, its taste should be kept intact by not deviating from the recommended temperature limit values. Shipments are not accepted if the prescribed limit values of temperature are not adhered to in any of the given stages of the cold chain. Stricter regulations are falling in place – all the more pressure on the cold chain logistics to adopt reliable measurement technology of temperature, humidity and even shock during transit,” informs Kalidas Bhangare, Managing Director, Testo India Pvt Ltd. In pharmaceuticals too, product innovation is driving more and more temperature-sensitive products and compounds into the cold chain. With this, cold chain operators are required to build stronger infrastructure and switch to the latest technologies that will support the market demands. Building efficiency, sustainability and integrity will be the focus area for the cold chain industry. Testo’s transit data loggers testo 184 help in getting key information of temperature log straight as a PDF report without any software installation and simply by plugging it as a USB.
Positive trend for air curtains
Akriti Gupta, Vice President Sales, Mitzvah Air Curtains, one of the leading air curtains manufacturers in India, hopes a positive trend for air curtains. While talking about trends for 2020, he gives emphasis on awareness around the technical aspects of air curtains especially, concerning the kind of industrial air curtains that are used for certain requirements, and the most important its placement. “This all requires education around the subject. Companies who are serious about doubling their turnover for the coming year must consider this aspect as we believe that education and awareness will ramp up demand while also giving rise to new trends within the cold chain industry,” states Gupta.
Jegapriyan Govindarajan, Managing Director, Tecumseh Products Company, an American manufacturer of hermetic compressors for air conditioning and refrigeration products, envisages energy efficiency as a trend in commercial refrigeration as they have a client base in commercial refrigeration and always demand high energy efficiency products. “Another factor that we notice is that there are cost pressures, we see cheaper imports from China. Also, the Indian market is gaining awareness of the existence of green technology,” informs Govindarajan. Integration of IoT Cold chains traditionally relied on drivers, warehouse managers and transporters to confirm that temperature of goods transported by them is maintained at optimal temperature during the course of the entire chain. “As an improvement, post-delivery, a data logger was then used to download data and verify the temperature reading in warehouses and during the journey. However, in recent times, with the advent of IoT and strict requirements of the shippers, all participants are more focused on getting real-time visibility of temperature data. But the use of IoT is not adopted in an integrated manner and it is used for corrective measures rather than preventive measures. In other words, use of analytics to improve operations and business decisions is largely absent, informs Rohit Chaturvedi, CEO, Transport Hub. The next stage of IoT evolution is towards the integration of IoT with analytics tools such as machine learning. The analytics can be used not only by the operations team but also by the management to improve business metrics on a real-time basis. The supervisory system, whether in the field or remote and the trend towards IoT will also be important for the cold chain industry. Remote alarms and data logs help address issues occurring in the field, while centralised cloud-based systems can be used to analyse showcase or cold room performance and benchmark store-to-store performance, helping the cold chain management team improve store management. In the near future, IoT service based on machine learning will be able to provide diagnostics and premaintenance to the cold chain industry, another certain trend.
“Automation and cold storage go hand in hand as the industries work together to secure the cold chain. Presently the market demand is steady, and as an automation company, we are constantly in the pursuit to innovate with technology and our products. We study market trends and requirements; cold storage is an industry which is likely to see growth and we try and innovate so that our solutions fit the individual requirement of the customer,” states Dimpi Barot, Gandhi Automations Pvt Ltd. Carsten Dahlgaard Senior Director of Sales, Industrial Refrigeration, Danfoss A/S. Denmark, informs, “Within the scope of industrial refrigeration and cold storage, the trend is that globally we are seeing that safety and total cost of ownership are the drivers within the industry. Today the five points that are important to the cold chain and the industrial refrigeration sector are energy, the total cost of ownership, reliability and also safety and standards.” “Investment in the right technology and adherence to the regulations will be the contributing success factors in 2020,” concludes Bhangare.