The Indian cold chain market has reached 1.82 crore in 2022. This growth may continue, with market projected to reach 3.80 crore by 2028, indicating CAGR of 12.3% from 2023 to 2028. Investing in improved cold chains and post-harvest infra will help in tackling global hunger challenges.
The current cold storage and transportation capacity cannot keep pace with the ever-increasing demands, and this is exerting pressure on the underlying infrastructure, which is facing many similar challenges. These are as follows:
Inadequate cold chain Infrastructure: India faces difficulty in fulfilling increasing demand for frozen food and perishables considering the available space for cold storage. This surge is fuelled by increasing consumption of perishables, alongside the rise of e-commerce and processed food. There is an imbalance in the cold storage capacity at the national level as the maximum number of facilities are concentrated in the northern region.
The lack of specialised transportation units such as refrigerated trucks and containers adds cost burden due to investments in acquiring appropriate equipment. Power shortages are so common they disrupt temperature control, leading to spoilage of products.
Financial strain: Building and maintaining efficient cold chain systems requires investments, which must adhere to various regulations and established global protocols bringing a financial burden for the industry stakeholders. Therefore, it has become a must for them to make these investments to stay competitive in the market.
Lack of skilled workers: Currently there is a shortage of skilled workers to operate and maintain new cold chain systems. Many workers lack training to handle perishable goods, which can lead to spoilage before the products reach consumers. Hence an upskilling and reskilling initiative should be implemented by the government and private sector.
Addressing these challenges can bridge the gap between current capacity and future demands. This will ensure sustainable management of perishable goods in India.
Government initiatives
Pradhan Mantri Kisan Sampada Yojana: Launched in 2017 with an investment of `4600 crore to modernise the food processing industry till 2026. A key focus is on creating robust cold chain infrastructure under its ‘Integrated Cold Chain and Value Addition Infrastructure’ scheme for horticultural and non-horticultural produce. This initiative promotes seamless cold chain facilities from farms to consumers, with improved collection, storage, transportation, and basic processing of agricultural produce.
As of December 31, 2022, it has created 8.38 lakh MT of cold storage capacity. The Union Ministry of Food Processing Industries has approved 39 Mega Food Parks and 298 Integrated Cold Chain projects nationwide to address gaps in the food supply chain and build out the Cold Chain Grid. As per the Ministry, this scheme is projected to impact 28,49,945 farmers by 2026 and create 5,44,432 direct and indirect employment avenues, contributing
- 35 per cent of the capital cost for projects in general areas with a capacity above 5,000 MT and up to 10,000 MT
- 50 per cent of the capital cost for projects in the Northeast, hilly, and scheduled areas with the same capacity range
India is focusing on building a robust cold chain infrastructure, this will not only enhance food security but also create a ripple effect that will boost the income of farmers, create new employment opportunities, and ultimately fuel the growth of the food processing sector and rural economy.
Cold chain storage trends
Increased transparency: In recent times there has been significant transformation taking place in cold chains, marked by the widespread adoption of cutting-edge technologies such as the integration of the Internet of Things, which provides real-time tracking and unprecedented visibility throughout the supply chain. This advanced monitoring not only minimizes spoilage but also ensures regulatory compliance
Predictive maintenance: Data analytics is playing a vital role in managing cold chains with the emergence of predictive maintenance using advanced algorithms and AI. These algorithms anticipate potential equipment failures even before they occur, enabling proactive maintenance to prevent downtime. This approach enhances efficiency and minimises operational costs.
Data from exports and domestic markets shows there is a growing demand for processed food options such as ready-to-eat meals, seafood, frozen food, and processed meat, all of which highly depend on a robust cold chain infrastructure.
Cold chain integration in last-mile delivery: The e-commerce boom has fuelled the demand for temperature-controlled last-mile delivery solutions, particularly for pharmaceuticals, and frozen food items. There are increased investments in electric cooling vehicles, and
mobile temperature control units to satisfy the customers and gain a competitive edge in the market.
Increased regulations: There are many regulations introduced, which are forcing stakeholders to follow compliance properly. This has led to increased investments in technologies that offer end-to-end traceability and build confidence in product authenticity and quality.
