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Top technologies in refrigeration and cold chain
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Monday, 24 February, 2020, 08 : 00 AM [IST]
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Shagun Sachdeva
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Cold storage is undoubtedly one of the emerging markets in the logistics industry, the sector owing to its immense potential for value-addition, specially, within the food processing category. With consumers increasingly becoming health-conscious and proactively gravitating towards healthful food, manufacturers understand that they need to adapt to thrive and bring in increased innovation to overcome capacity and infrastructure constraints, and mitigating disruption risks to ensure quality delivery. The changing consumer behaviour, growth in the e-commerce industry, and advancement in technology are the key factors pushing growth in the cold chain sector.
Cold chain management has become more complicated and critical for FMCG players as consumers appetite for fresh foods has steadily increased. Right from operational challenges in terms of capital-intensive equipments, strict temperature requirements and energy dependence, the sector is grappling with additional challenges in form of quality standards, and mounting regulations.
In developing economies, the lack of sufficient and efficient cold chain infrastructure along with updated modern technology is a major contributor to product losses, waste, over production and loss of market value, leaving little profit for farmers, manufacturers and retailers. The underdeveloped supply chains of parts of Latin America, Asia and Africa is a growing problem as more middle-class consumers demand better quality products to meet their increasingly sophisticated tastes.
The inefficient supply chains in these regions mean that consumers are spending more money on poor quality food which in turn is hindering the entire market. As such, manufacturers that tap into the desire for better quality products will be able to capitalise on important markets that are expected to become the key drivers of global economic growth in the future. Therefore, developing coherent and unbroken cold chains that include chilled packaging of fresh produce, food processing, cold storage, temperature- controlled distribution and refrigerated retailing will be vital to achieve growth in these emerging markets.
Looking at the growth opportunities of this sector in Indian market, manufacturers are investing across the supply chain to save costs and preserve food. India has always been struggling with the problem of food wastage. Despite being the worlds largest producer of milk and the second-largest producer of fruits and vegetables, around 50 per cent of the total production ends up wasted. India having about 6,300 cold storage facilities with a capacity of 30.11 million metric tonne, can only store about 11 per cent of the countrys total perishable produce.
Amidst these challenges, the cold chain market has grown steadily in the last few years and this trend is projected to continue until 2020. Manufacturers have been using straightforward packaging technologies to lower product temperatures without burdening or relying on the local infrastructure and relying on independent and reliable sources of energy, such as solar or wind power, to maintain constant temperatures throughout the production, transport and retailing of their products. Beyond strategic investments, manufacturers are also focussing on developing functioning relationships with local officials, producers, distributors and retailers across the supply chain to enhance the infrastructure and cold chain ability. However, the key point to ponder here is that the short- and medium-term investments by manufacturers should be coupled with government grants, subsidies or investments to allow the supply chains to grow and benefit manufacturers, consumers and governments.
In the light of cold chain industry, it is imperative to analyse the key technologies that are shaping the future of cold chain management in the whole consumer sector.
From coffee and fish to wine and olive oil, technological advancement is getting incorporated in cold chain & refrigeration in ways that promise to benefit producers, distributors, retailers and consumers.
Early applications of technology to cold chain and refrigeration suggest that cross-industry collaboration is becoming the norm, with specific initiatives bringing together IT leaders, technology startups, food retailers, NGOs and systems integrators.
With innovative packaging technologies for enhanced shelf life, retaining taste and texture and making it attractive and easy to handle with space efficiency, the cold chain supply can be enhanced for a reduced wastage production.
Key technologies to look at
Food Tracking: Leveraging various technological applications, companies can track down the food source and substantiate how foods remain fresh from farm to table which also indirectly helps in creating a competitive edge by building the authenticity of their brand.
Real-Time Data: Retailers and suppliers can ensure the quality of fresh foods in transit by maintaining the unbroken temperature control. For an instance, via sensors using IoT devices and cloud-based software applications, the refrigerated cargo containers can be remotely monitored and tracked down.
Cloud Platforms: Catering the demand for real-time data needs an IT infrastructure that can collectively analyse and share the data where and when its required. So only by harnessing IoT technologies, organisations can utilise the data that exists within their physical environments in unlocking business value across the cold chain in the form of reduced waste, brand equity and rapid RoI.
Blockchain Meets Cold Chain: Blockchain aids in creating a more transparent route for fresh foods, and leading retailers are finding an innovative way to transform this data into marketing messaging to foster more loyal customers.
Next Generation AI based Cold Chains: Intelligence in logistics and shipping has become a major focus within supply chain management in the recent years as faster and more accurate shipping reduces lead times and transportation expenses. The application of AI into supply chain related tasks holds high potential for boosting top-line and bottom-line value.
For instance, with volumes of data growing, and the insights that can be gleaned becoming increasingly varied and granular, companies like Godamwale are starting to turn to Artificial Intelligence (AI) computing techniques, like machine learning, deep learning, and natural language processing, to streamline and automate various processes.
Key take-outs
Cold chain development is an integral part of growing the economy due to linkage effect and what we need are long-term policies, strategies and action plans from the private and public sectors, commercial financing at low interest rates and subsidies to encourage local and international cold chain investment, greater education about food handling, cold chain technology and post-harvest activities in order to increase the efficiency of logistics processes throughout the food supply chain.
(The author is consumer insights analyst at GlobalData Plc. She can be contacted at shagun.sachdevv@gmail.com)
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