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Challenges and Barriers in Management of Cold Chain
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Monday, 04 November, 2019, 08 : 00 AM [IST]
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Dr Soumya Rathore
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Introduction
India is the leading producer of many food commodities among the world but still incurring significant post-harvest/post-slaughter losses. Most of the losses are caused during storage and transportation at which the temperature is not maintained at standard level and this results in spoilage of foods.
Approximately 30% of the fruits and vegetables grown in India are wasted because of lack of storage facilities and energy infrastructure. Cold chain management acts as a key player for maintaining the quality and safety of foods as it prevents microbiological contamination by taking simple temperature measurements and by keeping accurate temperature records.
Many cold storage facilities are following old technologies based on conventional energy process resulting in poor shelf life and poor quality of perishable commodities. Supply chain practitioners adopted new technologies like green cold chain management practices and cold chain logistics to overcome numerous challenges associated with developing the cold chain network.
According to a report of ONICRA in 2014, developing and integrated supply chain, including cold chain can save up to Rs 300 billion annually and at the same time reduce the wastage of perishable agricultural produce. Cold chain is applicable under the following areas: primary agricultural products: vegetables, fruits; meat, chicken, eggs; aquatic products, flowers. Artifactitious foods: deep freezing food, packing cooked food of chicken, meat, aquatic products and so on, ice cream, dairy products; raw materials for short order.
Status of Cold Chain Management in India
The national cold chain summit 2015 reports that Indian cold chain industry is expected to grow at a CAGR of 28% over the next four years and reach a market size of US$13 billion in 2017. This sector presents a great opportunity for foreign companies to explore and invest.
The Indian cold chain sector is highly fragmented with more than 3,500 companies in the whole value system. Organised players contribute only 8% to 10% of the cold chain industry market as on today. North India together has 47 per cent of cold stores whereas; Eastern region occupies 33 per cent of cold stores.
As per the National Centre for Cold Chain Development (NCCD) report 2015, the country has created 31.82 MT of cold storage space. This evaluates into a current gap of 3.27 MT in cold storage space. Though, the Indian government is one of the driving forces in developing the cold chain industry and supports private participation through various subsidy schemes and grants. Investment in cold chain in India was also opened under the automatic route for 100 per cent FDI participation.
Cold Chain Management
Cold Chain Management (CCM) is relatively a recently adopted concept in the supply chain management. A network of refrigerators, cold stores, refrigerated trucks, freezers and cold boxes organised and maintained so that the perishable items are kept at the right temperature to remain fresh and intoxicated during their transportation, storage, and distribution from factory to the point of use. The cold chain supply has proved to be a suitable and uninterrupted storage as well as distribution model for food safety concern of the country. Every year, a huge quantity of perishable goods like food, vegetables, flowers, meat, fruits, and medical drug or vaccines and so on gets wasted only because of unavailability of on-time storage and distribution capability in India.
Cold Chain Management or Supply (CCM/CCS) has a significant impact on farmers, and the companies working in food industry. Having compared the system requirement of cold chain supply, the advantages are better product quality in terms of nutritional value, less microbial growth due to proper cold storage conditions, longer storage of product or extension of shelf life and value for money.
Challenges and Barriers
The key challenges to the growth of this sector
Time-temperature abuse: Temperature abuse as an unacceptable deviation from an optimal temperature or optimal temperature regime for a given food product for a given period of time, taking into account ambient temperature and the type of activities food product exposed to.
Sensitive links in food chain: It has been demonstrated that temperature fluctuations can easily be encountered in the entire cold chain. Temperature control problems during the refrigerated food at the retailer typically occur due to lack of compliance with the temperature specifications for refrigerated foods.
Cost of energy consumption: Operating costs for the cold storage business in India are approximately Rs 80-90 per cubic foot per year as compared to Rs 40 per cubic foot per year in the West. Energy expenses alone make up about 30 per cent of the total expenses for the cold storage industry in India compared to 10 per cent in the West.
These factors make the business of setting up of cold storages a high entry barrier.
Lack of logistical support: Cold chain industry in India is fragmented and it will require heavy investment in building technology enabled cold storage facilities to cover entire value chain from procurement to transportation in refrigerated trucks to retail outlets in cities.
Uneven distribution of capacity: A majority of investment in setting up cold storages in India has been in states like Uttar Pradesh, Uttaranchal, Maharashtra, Gujarat, Punjab and West Bengal. Secondly, cold storages that have been set up can cater to single commodities only which are major bottleneck.
Cold chain management is a more complicated barrier for exporters. Apart from above challenges, there are around 10 barriers that are observed by different studied and refined through the opinion of experts. These barriers of cold chain management are - - High Capital costs of renewable projects; - Outdated Technology; - Poor Cold chain network; - Lack of Skilled manpower; - Poor Cold storage Infrastructure; - Cold Chain sterilisation with chemicals; - Lack of Reverse logistics; - Non-Recyclable packaging; - Lack of Government support.
Future Prospects
Cold chain management is at a nascent stage in India. The revival of the cold chain sector is expected to open up a plethora of opportunities for players having strong linkages in the agriculture value chain. Significant investment opportunities are yet to be tapped in the areas of supply chain management, cold storages, financing, retailing and exports. There must be better linkages and way of transportation between growers, storage and customers. There is absence of a single dedicated perishables gateway or fast track corridor for perishable cargoes.
Consumer food retail sector is the fastest growing in the country, worth around US$15 billion, 40 per cent of fresh produce is wasted due to lack of satisfactory handling in the supply chain, Indian cold chain business is fragmented in a big way. This can only be achieved by carefully designing a sustainable cold chain network by removing the barriers.
(The author is assistant professor, Department of Food Technology at Harcourt Butler Technical University, Kanpur. She can be contacted at rathoresoumya23@gmail.com)
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