Cold chain, a series of temperature controlled logistics and storage facilities, forms the very backbone of all industries with perishable products like food, agricultural produce and pharmaceutical products. Companies invest huge sums of money to ensure their products reach consumers in its original form. In India, cold chain sector is termed as the sunrise sector gauging its indispensability in an industry’s growth and the investment potential present in the sector.
A cold chain is a combination of temperature controlled surface transport and storage facilities or simply temperature controlled supply chain.
It helps in extending the shelf life of products such as fresh agricultural produce, seafood, frozen food, photographic film, chemicals and pharmaceutical drugs. The presence and development of impeccable cold chain industry is therefore important for reducing the wastages of perishable yet vital products.
Cold chain is a series of activities under controlled temperature conditions. The key steps involved in a cold chain are as follows:
1. Procurement of product from source
3. Transportation to warehouses
4. Cold Stores/warehouses
5. Transportation to retail outlets
6. End Consumer
An effective cold chain has an imperative role till the product reaches the doorstep of consumers. Right from the transportation of products from their source point to temperature controlled warehouses in temperature controlled vehicles till the retail outlets where they are made available for consumption in their freshest form.
The above mentioned steps take place under the two components of a cold chain: Temperature controlled Vehicles (TCV) and Temperature Controlled Storage (TCS) or Cold Stores. Cold storage solutions form about 80-85% of the Indian cold chain (or integrated cold chain) market by value and the balance 15-20% is contributed by transportation.
Figure 2 Key Steps Involved in a Cold Chain
Indian cold storage market is highly fragmented with a large number of units under small &unorganized sector. Organized sector gets small part of the pie with ~20% share while unorganized sector has a large bite in its mouth with ~80% of the market.
The Indian cold chain facilities are used by various industries extensively like pharma, food service, dairy and meat & poultry. Also the industry is segmented between wholesalers and retailers with the former holding a major share.
The charts below will decipher the information stated above.
Figure 4 Indian Cold Chain Industry- User Segments
Source: NPCS Research