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, as per a report by MarketsandMarkets.
Why lack of infrastructural support in emerging markets remain a challenge?
The cold chain industry is fragmented in emerging markets such as India, China, and in Latin American countries. Cold chain service providers do not have the technology required to build high-quality cold chain infrastructure. They are unable to cover the entire value chain, from procurement in rural areas, through to transportation in reefer trucks, and delivery at retail centers in urban areas. For instance, fruits & vegetables are often left near the fields until a truckload is accumulated. Pre-cooling facilities are not available, sanitation is poor, or there is overloading of refrigerated storages and transport. The cold chain systems in these markets are not compatible for use for multiple perishable commodities.
Why increasing FDI in emerging markets present an opportunity?
The cold chain market in emerging economies is growing faster than the global market. In the Asia Pacific, China and India are projected to be the fastest-growing emerging markets, propelled by the need to reduce food losses at each stage of the chain (from harvest to the retail market). Due to the lack of access to adequate refrigeration systems and refrigerated transport, a huge quantity of perishable food is wasted even as demand for chilled and frozen foods is increasing, and they are becoming popular among the younger generation in emerging economies.
Rapid urbanization, greater spending power, and a higher number of dual income households have spurred demand for chilled and frozen foods. Along with the emergence of an organized retail food sector, changes in foreign direct investment (FDI) laws are creating opportunities in the domestic food industry, including the cold chain sector. New legislations in retail that give foreign investors and multinational retail chains access to these markets also fuel growth. These retail chains have organized distribution channels in these markets, which lead to opportunities for setting up cold chains. For instance, the Indian government is supporting the cold chain sector through both monetary and budgetary measures. A large portion of the capital goods required for setting up these facilities can be produced in India, which is expected to support further improvement programs. Hence, international organizations that want to set up assembling units in India can take advantage of shorter lead-time, and reduced cargo and assembling costs.
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The increasing demand for cold chain services in the European and Asia Pacific regions is driving the growth of the market.
The European region is estimated to account for the largest share, in terms of value, in the global market, in 2018. There is a steady increase in demand, particularly for cold chain due to a continuous increase in domestic consumption of high-quality perishable commodities. 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.
Key Market Players
The leading players that dominated the cold chain market include:
- Americold Logistics (US)
- Preferred Freezer Services (US)
- Burris Logistics (US)
- Lineage Logistics (US)
- Nichirei Logistics (Japan)
Key questions addressed by the report:
- What are the new technology and application areas for the global market that companies are exploring?
- Who are some of the key players operating in this market, and how intense is the competition?
- What kind of competitors and stakeholders would be interested in this market? What will be their go-to-market strategy, and which emerging market will be of significant interest?
- How are the current R&D activities and M&A’s in this market projected to create a disrupting environment in the coming years?
- What will be the level of impact of new service launches on the revenues of stakeholders due to the benefits—such as increasing revenue, environmental regulatory compliance, and sustainable profits for the suppliers—offered by the global market?
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