The national cold chain sector is expected to grow at over 20 percent CAGR by 2025, according to a recent report from JLL, due to its transformation from conventional cold storage to modern storage space.
The estimates are based on the sector’s performance over the past few months, where despite the post-Covid economic impediments; the organised cold chain segment has seen significant growth in country-wide footprint. According to JLL, there is an opportunity for organised cold storage / palettized cold storage in Tier-I cities like Mumbai, Delhi NCR, Bengaluru, Chennai, Pune, Kolkata, Hyderabad as well as Tier-II cities like Lucknow, Kanpur, Ranchi, Patna, Bhubaneswar, Goa, Aurangabad, Ahmedabad, Kochi, and Coimbatore. An additional 1.5 lakh to 2 lakh pallet capacity (frozen and chilled) may be added as part of temperature-controlled storage space in the next two to three years.
Cold chain refers to the transportation and warehousing of temperature-sensitive products from the point of origin to the point of consumption, which increases shelf life and prevents spoilage.
“Automation in the logistics sector will only become more pronounced in the coming years and we see innovation in the multimodal and cold supply chain as catalysts for new segments of demand,” said Yogesh Shevade, Head – Industrial Services, JLL, India. “The rationale behind the expansion is primarily driven by capturing higher market share by organised cold chain operators, changing consumer behavior for quality products, and securing supply reliability in a pandemic like situation,” he added.
In current times, for transporting and storing temperature-sensitive products refrigerated storage has become an integral part of the supply chain. Proximity to population centres, population growth, changing consumer preferences and consumer spending are the primary drivers for cold chains.
Growth in organised retail: Organised retail and foodservice industries have emerged as new cold chain segments, majorly due to changing consumption patterns. Increasingly, consumers demand a large variety of fresh fruits and vegetables, dairy products, meat, and poultry products, and other temperature-sensitive commodities have led to rising in cold chain infrastructure.
Growth in the food processing industry: Since, the Indian food processing industry is critical, the government is vigorously focusing on its development. This has resulted in boosting of cold chain infrastructure, which will, in turn, reduce wastage in the supply chain.
Pharmaceutical sector: Cold chain forms the storage backbone of the pharmaceutical industry, which is highly susceptible to temperature and time requirements. It is a known fact that India caters to over 50 percent of global demand for various vaccines, 40 percent of generic drugs demand in the USA, and 25 percent of all medicines in the UK, and the sector is expected to rapidly grow by 2025.
