Cold chain market growth driven by the demand for proper storage options and retail growth

Dec. 10, 2014 - PRLog -- India is the second largest producer of fruits and vegetables and produces more than 200 million metric tons annually, and yet, has a storage capacity little more than 23.6 million tons.

This is why growth in organized retail and shift towards horticultural crops by farmers to evade risk is boosting the demand for cold chain market in India. Currently, the cold chain industry in India is valued at USD 4 billion in FY 2013, and has been growing at 18% rate for the last three years. It has been estimated that the industry will be worth approximately USD 10 billion by FY 2017 and will be growing at a CAGR of 20%.

This report, Cold Chain Market in India 2014 (http://www.researchonindia.com/cold-chain-market-in-india-2014.html), provides an overview of the cold chain market in India and forecasts market size data in terms of value and volume over 2012 to 2018 and 2013 to 2018, respectively. It also gives a qualitative analysis of the major drivers and challenges affecting the market.

Market overview

India is the second largest producer of fruits and vegetables in the world. Due to lack of adequate cold storage facilities, more than INR 100 billion worth of fresh produce is wasted every year in the country. In absence of improvements in cold chain infrastructure, food wastage problem is likely to grow even more. More modern facilities along with planned establishment between the point of production and market can help India improve the situation, helping it lower wastage and increase profitability. Growth in organized retail and the food processing sector are driveing the cold chain market in India. Further shift towards horticultural crops by farmers to evade risk boosts the demand for cold chain. Rising demand for cold storage in pharmaceutical sector is also driving the growth in cold chain market.

The cold chain industry in India is highly fragmented with more than 3500 companies in the whole value system where organized players contribute only 8 to 10% of the cold chain industry. Moreover, most of the equipment in use is outdated and single commodity-based making is grossly inadequate for Indian demands. However, new initiatives that were announced during Union Budget, including modernization of existing facilities, introduction of new ventures via private and government partnerships, etc., is expected to boost the cold chain industry in India.

All these growth prospects for the food-processing sector along with attractive government incentives have made cold chain business a lucrative proposition for even foreign investors. Another focus area is to make the operating system more energy efficient, especially the reefer trucks that should be able to withstand the variations in the ambient temperature at the drop-off points.