India's Cold Chain Builders The supply chain encapsulates the transportation, storage, and handling of such goods in a temperature-controlled environment.

Logistics, the end-to-end pr ocess of planning, implementing, and controlling the flow of goods, ser vices, and information, is at the core of every industry you look up , irrespective of currency, demography, and location. Simply put, without the guiding force of logistics, supply chains will collapse, chaos will ensue, industries will be stranded, and market shelves will be bare of products.

It is integral for the management and supply of perishable goods. However, certain commodities are extremely temperature sensitive, and that's where cold chain supply comes into play. CC refers to the temperature-controlled supply chain that is specifically designed to maintain and preserve the quality of temperature-sensitive products such as fruits and vegetables, meat and fish, dairy products, and healthcare products. The supply chain encapsulates the transportation, storage, and handling of such goods in a temperature-controlled environment.

THE NEED FOR COLD CHAINS IN INDIA

With eight states located on the Tropic of Cancer, India lies on a latitude where the Sun is directly overhead. Between 1901 and 2018, the country's average temperature rose by 0.7 degree Celsius and is expected to keep on rising. India Meteorological Department reported that in April 2023, the average maximum temperature hit 34.19 ºC. India is the world's largest producer of milk, second largest for fruits and vegetables and contributes a good number in the production of marine, meat and poultry products. Food and Agricultural Organisation (FAO) reported that a rough 40 per cent of food produced in India is wasted annually due to fragmented food and inefficient supply chain system, and about 29% of vaccines go waste due to damages and temperature variations during transit.

The Indian cold chain market is valued currently at INR 1,814.9 billion and is expected to touch INR 3,798.7 billion at a CAGR of 12.3% in 2023-28.

Source: International Market Analysis Research and Consulting Group

THE TEMPERATURE LEVELS

The standard temperature for a cold chain ranges between minus 30 degree Celsius and 15 degree Celsius, depending on the products. It is typically categorized into five: Deep freeze (-25 to -30 Celsius), Frozen (-10 to -20 Celsius), Chill (2 to 4 Celsius), Pharmaceutical (2 to 8 Celsius), and Banana (12 to 14 Celsius).

PROTECTING THE PHARMACEUTICAL PRODUCTS

"My vision for Celcius was born during the nationwide lockdown in March 2020, when the unavailability of staff and coordination errors caused chaos in the transportation of essential goods across the country. We recognized the gap that existed for the sustained demand of contactless deliveries and anticipated the requirement of a robust and unbroken cold chain to help the distribution of the covid-19 vaccine," shares Swarup Bose, chief executive officer and founder, Celcius. India is a major producer and exporter of pharmaceuticals and vaccines, and its role in the global market has strengthened post-pandemic. This was the very reason why Bobba Group, a 30-year-old company specializing in aviation, airport cargo terminal handling and logistics space, ventured into cold chain supply back in 2021. "Post-pandemic, there has also been an increase in demand for a tech-enabled multi-level warehousing solution. As a result, we've launched Bobba Logistics, a complete warehousing solution where a diverse set of goods can be shipped quickly and to multiple locations," shares Chandrakala Bobba, director, Bobba Group.

EASING PRESSURE AND LOSS ON FARMERS

A well-designed cold chain infrastructure will help in preserving the quality and improve the shelf life of perishable goods. "The lack of affordable cold storage and cold transport facilities is another common challenge faced by rural farmers and food producers. Since fresh produce has a limited shelf life, farmers with no access to refrigerated storage are forced to sell their harvest at lower costs to avoid wastage. This leads to financial losses and also reduces their access to wider markets," adds Bose. "The farmer operates on fragile working capital and needs to quickly sell as much of his crop as possible to fund his next crop cycle. This situation can change dramatically if the farmers can safely store their produce and sell it when the time is right. As part of the effort to change this paradigm, the government is actively encouraging horticulture amongst farmers," shares Akash Agarwal, co-founder and CEO, New Leaf Dynamic Technologies. Horticultural products, i.e., cultivation in gardens and greenhouses instead of field-scale production, are said to be more profitable than traditional agricultural products, according to Agarwal. Farmers tend to prefer cultivating grains rather than fruits and vegetables due to post-harvest losses, worth almost USD 16 billion annually. A farmer tends to lose a third of the horticultural produce due to their perishable nature and lack of access to the cold chain.

GOING GREEN WHILE KEEPING COOL

Maintaining the controlled infrastructure requires energy sources which play a significant role in determining the environmental impact. 2015-founded, DD Solar provides refrigerators and freezers powered by solar energy, hence reducing the ecological impact of utilizing cold chain. Its 'Solar DC Refrigerator' comes in five variations, catering to dairy, fish, fruits, and vaccines. "The decision to acquire this equipment should be based on several criteria, the most important of which are the current existing storage capacities and the anticipated future storage requirements," shares Tushar Devidayal, founder and CEO, DD Solar. New Leaf Dynamic Technologies is also going energy efficient when it comes to refrigeration appliances. Its patent unit, GreenCHILL, keeps fruits and vegetables up to 20 MT cool and safe by using loose biomass and eliminating the need for grid power. "Using GreenCHILL™, post-harvest losses reduce to less than 5% (typically at 30%) at the farm gate and allows farmers to store their produce until market demand and prices increase, enabling them to earn more and in an environmentally sustainable manner," shares Agarwal. The GreenCHILL ranges from a temperature of +2° to +25° C.

CHALLENGES IN THE CURRENT SYSTEM

Last-mile transportation for perishable products with nonrefrigerated vehicles and lack of tracking and monitoring of the distribution and handling of such products are key challenges in the segment. The higher operating fuel cost and lack of tech adoption are another set of challenges faced by the players in the industry. Fuel costs in India make up around 45 per cent of the operating expenses of cold chains in the country. "Although the market presents immense opportunities, it is imperative to address the pervasive issues that afflict this industry, fostering better organization and overall improvement. To overcome these hurdles, the deployment of cutting-edge technology and the establishment of a resilient network emerge as pivotal solutions," shares Vikram Gupta, Founder and Managing Partner, IvyCap Ventures Pvt Ltd, one of the funding members in Celcius.

OPPORTUNITIES FOR POTENTIAL PLAYERS

"By venturing into cold chain storage, start-ups can increase their growth potential and tap into new revenue streams. Demand for cold chain storage tends to remain steady even when there is a downward trend in the market," shares Bobba. Going green and sustainable will be a big opportunity for potential cold chain start-ups, according to Aggarwal and Devidayal. "The focus on sustainability will enable businesses to reduce costs by streamlining their operations and eliminating unnecessary steps," shares the latter.

GOVERNMENT PUSH

There were about 8186 cold storages across India in 2020. The available capacity was 374.25 Lakh MT in 2020 against 350 lakh MT in 2015. However, the current required number is not widely known. The Mission for Integrated Development of Horticulture (MIDH) by the Department of Agriculture Cooperation & Farmers Welfare provides financial assistance for horticultural activities. The Scheme for Integrated Cold Chain and Value Addition Infrastructure under Pradhan Mantri Kisan Sampada Yojana (PMKSY) aims at reducing post-harvest losses of horticulture and non-horticulture. The government is also pushing for private players to tap into solar energy to run cold chain facilities.