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Reducing waste in the $210.49 billion cold chain market

Changing customer habits and pharma requirements put pressure on cold supply chains to become greener.


The global cold chain market is expanding. Valued at nearly $210.49 billion in 2020, it is expected to reach $628.26 billion by 2028, growing at a rate of 14.8%. [1]

Looking to Asia, e-commerce sales are significantly increasing with the wealth of the population. Perceptions of consumers regarding frozen food, coupled with rapid urbanization, means frozen food is moving ‘online’. In the Philippines, an ongoing shift in consumer habits means locals are buying fresh and frozen produce from supermarkets rather than from traditional wet markets. Internal and external demand is driving the explosion in cold chain storage facilities and logistics, along with agricultural exports from the country. 

Apart from this, ready meals and prepare-at-home meal kits like ‘Hello Fresh’ and a drive to eat more organic in the western hemisphere are further pushing the demand for cold storage and a frozen or cooled supply chain. 
At the same time, according to the UN, more than 20% of fruits and vegetables are lost between harvest and retail [2] which adds to the central drive to improve cold chain management and, hence, sustainability. This puts extra focus on first-mile logistics: from the farm to the first cold chain element. 

Likewise, the pandemic-induced shift to direct to consumer (D2C) and e-commerce, plus higher requirements in the pharma sector for safe and effective distribution of medicine and vaccines, add further pressure. These developments increase the requirements on compliance for food as well as pharma. Simultaneously, the supply chain is serving new markets: Organic produce with a shorter shelf life and the COVID-19 vaccine distribution pose a set of new challenges to the cold chain.

Supply chains react to these new requirements with solutions such as track-and-trace software, automation, custom packaging solutions and multi-segmented refrigerated trucks. Additionally, the sustainability drive within the cold chain also pushes towards energy efficient (and sometimes solar-powered) facilities, including refrigeration units, to achieve energy neutrality.

Below some examples of developments and use of technology in the industry:

  • Reduce energy consumption – investing in automation solutions saves on floor space and reduces volume to cool
  • Outsourcing – using 3PL providers who have the scale to be able to invest in automation
  • Labor challenges – using automation to make up for the lack of labor in the sector – an additional problem compared to normal warehouses, as the conditions in cooled warehouses are grueling
  • Growing number of SKUs, e-commerce and direct to consumer deliveries – increased picking activity calls for automated solutions and supply chain software to coordinate activities in the warehouse

In the future, I expect that the sector will leverage artificial intelligence to a larger extent to look at trends that impact supply chains and food quality to reduce food waste and problems linked to cold chain failures.

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