siliconindia | | July 20189Consumer access to market is improving through online shopping. It is only if the cold chain network is scaled-up greatly, such demands can be catered to the consumer levelcrop-climate suitability. The com-parative cost of the cold chain trans-portation is prohibitively higher than the ambient. One of the key reasons for high freight cost in cold chain is because of the non-availability of the return freight.Potato which occupies 75 percent of the cold stores capacity gener-ates only about 20 percent of reve-nue. Whereas the multi-commodity stores which account for 23 percent of capacity generate 54 percent of revenue. Technically speaking po-tato-based single commodity cold stores are not viable. However, their survival is largely dependent on po-tato trade & money lending to farm-ers. Cold store owner get easy access to finance from the banks on the ba-sis of previous year's stock & they intern lend to the farmers. In this process, farmers are often the losers.The cold chain industry compris-es of three segments. Pack houses that are located at the farm levels, temperature-controlled warehouses (stores) at town or city level, and the temperature-controlled vehicles that link the packs houses, warehouses & retail outlets. In the cold chain, almost 88-90 percent of the market share is of temperature-controlled warehouses and remaining 10-12 percent is of temperature-controlled vehicles. The study by NCCD & NA-BARD indicates there is not much of gap between requirement (35.3 MMT) & availability (32.8 MMT) in cold storage segment, but it is high in the first & last mile connectivity. The gap between requirement and availability of pack houses (required- 70,000 & available- 250) & transpor-tation (vehicle required- 62,000 & available- 10,000) is high.The service providing companies have to start looking at integrated market-based cold chain solutions, which provide value to every stake-holders. Like in apple storage brining Control Atmosphere (CA) technology improves the product shelf-life from 2-3 months to about 8-10 months. This spreads the availability window for the consumers, while the farmer gets the benefit of seasonal price ar-bitrage & service provider improves his capacity utilization. The cold chain business is high-ly technical. Unlike ambient trans-portation, it needs skilled & trained people for operation & execution, as errors or malfunctioning has a very high cost. However, almost 90-92 percent of the industry is dominated by the unorganized players. There-fore, the assurance on temperature controls is also low. Hence, the need of professional companies providing integrated solutions is very strong. Government, on the other hand, has a role to play in formulating & monitoring for food safety standards for cold chain through various con-trol mechanisms ­ 1. Government to define guidelines for commodity-specific transpor-tation/storage as is done by USDA, regulating authority for agricultur-al production in U.S. For example, Carrot & Sweet corn will have two different sets of temperature & hu-midity requirement for preservation.2. Government to create regulatory framework in India to define man-ufacturing standards, certification and rating of Insulated Reefer Box-es (IRB). American or the European IRB standards currently followed are designed for their environment tem-perature of 30-35 °C, while in India temperature goes as high as 50 °C. Hence, we may have to create our own standards.3. Government to help in formulating masterplans to link commodity clus-ters (crop production), storage (ware-housing) hubs & retails/consumers centers (markets).Capacity utilization & electricity load planning are critical for business viability. Companies which have bet-ter visibility on the supply chain in terms of available load, time & space can plan better than the unorganized players. However, cost optimiza-tion also needs an understanding on product characteristics like Carrots will have almost 10 percent more re-frigeration load compared to peas or sweet corn. To save on efficiency one should not go by thumb rule & put everything on to a single chamber.Quick service restaurants (QSR) across India are penetrating fast. With consumers shifting to fast-paced lifestyle, changing eating hab-its on increasing purchasing power, they are looking for more conve-nience & ready food solutions. This is fueling demand for cold chain services. On the other hand, con-sumer access to market is improving through online shopping. It is only if the cold chain network is scaled-up greatly, such demands can be catered to the consumer level.
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