India is currently the world’s second largest producer of fruits and vegetables, a factor demanding a robust and efficient management of its supply chain. According to a recent Crisil Research report, the Indian Cold Chain Industry is growing at a 13% – 15% CAGR compared to the 11% – 13% CAGR in 2017.
Biomedical and Pharmaceutical manufacturing is another key driver for growth of the Temperature Controlled Supply Chain. Furthermore, government polices too are aligned to support and leverage this growth. The Indian government and the National Center for Cold Chain Development (NCCD) are focused on infrastructure development projects, with 135 cold chain projects, 40 mega food parks, and grants above Rs. 70 billion; policies in the form of subsidies, tax benefits, and technical training are adding momentum to the evolution and management of a Cold Supply Chain.
Some of the major trends driving growth of the Cold Supply Chain in India are:
- Consumer Behaviour: The advent of modern trade supermarkets has changed consumer behaviors and has created a whole new organised food retail demand chain. The availability of processed, frozen and fresh categories of vegetables, dairy, fruits and meats mandate the use of a temperature controlled supply chain from origin to the final customer.
- Farming Behaviour: Farmers are moving towards cultivation of fruits and vegetables due to better yields and remunerative value, as compared to the risks and investments in grain crops. This, in turn, is driving the requirement of cold stores closer to farms.
Influx of funding
However, even though there is an influx of funding in this sector by the government and private there remains a void in adequate supply and demand. India’s cold chain positioning is still at a nascent stage and faces many challenges like:
- high share of single commodity cold storages
- derisory transport facilities
- high initial investment for refrigeration equipment, paneling and more land
- lack of adequate enabling Infrastructure (roads, water supply, power supply, drainage, etc.);
- lack of awareness about handling temperature sensitive goods by all stakeholders involved
- education in this specific area limited only to some major cities in India
- best in class practices and gold standards not followed and not required by stakeholders due to several of the points mentioned above.
Of course, safety, global standards of quality, enhanced efficiency, and investments need to be the foundations on which our cold chains need to be built. Being energy intensive (due to refrigeration), these supply chains need to be carefully monitored for their impact on the environment. There is a pressing need to create a reformed workforce to elevate India’s standing in the cold chain market globally.