(I-BusinessNews.Com, May 28, 2020 ) The Cold Chain Market is estimated to account for a value of USD 203 billion in 2018 and is projected to grow at a CAGR of 7.6% from 2018, to reach a value of USD 293 billion by 2023, as per a report by MarketsandMarkets.
Why increasing FDI in emerging markets present an opportunity?
The cold chain market in emerging economies is growing faster than the global market. In the Asia Pacific, China and India are projected to be the fastest-growing emerging markets, propelled by the need to reduce food losses at each stage of the chain (from harvest to the retail market). Due to the lack of access to adequate refrigeration systems and refrigerated transport, a huge quantity of perishable food is wasted even as demand for chilled and frozen foods is increasing, and they are becoming popular among the younger generation in emerging economies.
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Rapid urbanization, greater spending power, and a higher number of dual income households have spurred demand for chilled and frozen foods. Along with the emergence of an organized retail food sector, changes in foreign direct investment (FDI) laws are creating opportunities in the domestic food industry, including the cold chain sector. New legislations in retail that give foreign investors and multinational retail chains access to these markets also fuel growth. These retail chains have organized distribution channels in these markets, which lead to opportunities for setting up cold chains. For instance, the Indian government is supporting the cold chain sector through both monetary and budgetary measures. A large portion of the capital goods required for setting up these facilities can be produced in India, which is expected to support further improvement programs. Hence, international organizations that want to set up assembling units in India can take advantage of shorter lead-time, and reduced cargo and assembling costs.
Growth of international trade due to trade liberalization
Globalization has increased due to trade liberalization, advancements in transport infrastructure & communication technologies, and growth of multinational companies in the food retail sector. It has boosted international trade in perishable foods such as dairy & frozen desserts, fruits & vegetables, meat, fish and seafood, and bakery & confectionery products. Every region or country exports food and agricultural products that it produces and imports food products that it is deficient in. This has resulted in almost any fruit, vegetable, or processed food being available at local supermarkets all the year round.
Several forces drive and enhance the trend of perishable commodities trade at the global level. The lowering of tariffs and non-tariff barriers to international trade has encouraged rapid growth of cross-border movement of perishable commodities. Growth of international trade in perishable foods is affected by the following factors:
High energy & infrastructure costs
Ensuring food quality and safety by preventing premature expiry, decay, and spoilage are major priorities for manufacturers, retailers, and consumers. To achieve this, it has become necessary for service providers to invest in modern cold storage facilities, advanced vehicles, and system technologies.
High energy costs are a growing concern for cold chain providers. Energy costs are the highest in North America and Europe, followed by labor costs. In refrigerated storage facilities, traditional florescent light fixtures (which are switched on throughout the year) are used because it is mandatory to do so for a refrigerated storage facility. This leads to loss of energy and high costs.
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The European region is estimated to account for the largest share, in terms of value, in the global market, in 2018. There is a steady increase in demand, particularly for cold chain due to a continuous increase in domestic consumption of high-quality perishable commodities. Asia Pacific shows significant growth potential for the cold chain industry due to the increase in awareness about the prevention of food wastage before consumption, growth of the organized retail sector, rise in consumer demand for perishable foods, and government support & initiatives in this sector. The region is projected to surpass the size of the European market by 2023.
MarketsandMarkets™
Mr. Aashish Mehra
1-888-600-6441
raviraj.tak@marketsandmarkets.com
Source: EmailWire.Com 
