Growth opportunities in cold storage for healthcare

Cold storage preserves the quality and safety of perishable goods across industries. Surging demand for vaccines and biologics is generating new opportunities in cold storage. Controlling temperature extends shelf life, minimises waste, and enables long-distance transport, ensuring products reach consumers in optimal condition.

Cold storage is a component in modern supply chains for industries dealing with perishable goods like food, pharmaceuticals, and certain chemicals. These temperature-controlled facilities maintain products at precise temperatures, ensuring their quality and extending their shelf life. Without cold storage, it would be challenging for the global food supply chain to consistently deliver fresh produce, dairy, meat, seafood, and frozen items to consumers without spoilage. The pharmaceutical industry also relies on cold storage to safeguard temperature-sensitive medicines, vaccines, and biologics to preserve the efficacy of these products throughout storage and transport.

Cold storage facilities prevent spoilage, decay, and contamination by maintaining temperatures ranging from just above freezing to sub-zero temperatures. It ensures that products remain safe and from the point of production to the sale or use. As the demand for fresh food, health products, and temperature-sensitive goods continues, cold storage solutions have become indispensable for various industries. It helps retain their nutritional value, texture, and taste. This reduces food waste and allows products to be transported over longer distances.

Food and pharma

The growth of e-commerce contributes to adopting cold storage within the grocery and food delivery sectors. Cold storage slows down the biological processes that cause food spoilage, such as enzymatic reactions, microbial growth, and oxidation. The meat and seafood are kept from developing harmful bacteria that thrive in warmer conditions. The market for cold storage solutions is growing to meet demand for frozen and processed foods, creating new opportunities for providers.

Many medications, like biologics and vaccines, must be stored within a specific temperature range, often between 20C and 80C, to remain effective. If exposed to higher temperatures, these products can degrade, lose potency, or even become harmful. Cold storage facilities, including specialised freezers for ultra-low temperatures (as low as -700C for certain vaccines), ensure that these life-saving products remain stable from the point of manufacture to their final destination, whether that’s a pharmacy, hospital, or distribution centers.

Expanding trends and regulation

The market has benefitted from the stringent regulations governing the production and supply of temperature-sensitive products. According to the cold storage industry, 53 percent of enterprises want to improve their cold storage capacity. Increasing demand for food and pharmaceuticals and a greater emphasis on safety has resulted in a rise in demand for cold storage space. An increasing focus on food safety further expands the market opportunity for cold storage, catering to the need for secure handling of temperature-sensitive items. Cold storage enables the food industry to comply with regulatory standards for food safety, such as the Hazard Analysis Critical Control Point (HACCP) system, which mandates strict temperature controls to prevent contamination and spoilage.

Technological innovations in energy-efficient refrigeration are increasing food storage. Further, the rising demand for temperature-controlled pharmaceuticals, with the need for vaccine storage, is propagating the need for expanded cold storage infrastructure.

Cold storage adoption is also increasing within the agriculture sector, where temperature control helps maintain the quality of produce. Intelligent systems based on the 5G Internet of Things are an emerging technology in the design of cold chain logistics. Moreover, IoT and remote monitoring technologies propel the cold storage industry towards improved efficiency. The emerging trends are enabling real-time tracking and management of temperature-sensitive goods across the supply chain. Smart technologies allow for precise temperature control of cold storage environments, reducing the risk of spoilage and ensuring compliance with strict regulatory standards.

Investments in automated cold storage technologies further accelerate market expansion, improving operational efficiency and response times. The market expansion can be linked to rising demand for cold storage in commercial and industrial organisations and regulatory compliance demands. The majority of the expansion was seen in emerging nations such as India, China, Brazil, Indonesia, and Mexico, among others. Increasing frozen food consumption in emerging countries such as India and China is particularly pushing the frozen food industry. Warehouses in this category keep their storage temperatures between -10°F and -20°F. They hold frozen vegetables, fruit, fish, meat, seafood, and other items.

The absence of infrastructure to support the cold chain and the unavailability of power hook-ups for reefer trailers at transportation hubs and ports may stymie industry expansion in these areas.

Growth drivers and export

The growth in the cold storage industry is driven by several key factors, including the rise in the global trade of perishable goods, increasing consumer demand for fresh and frozen food products, and the expansion of the pharmaceutical industry.

The global market for Cold Storage was estimated at US$155.2 Billion in 2023 and is projected to reach US$776.2 Billion by 2033, growing at a CAGR of 17.5 percent from 2023 to 2033 as per Research And Markets report ‘Cold Storage-Global Strategic Business Report’. One of the main drivers is the growing consumption of temperature-sensitive food items, such as fresh produce, dairy, seafood, and meat, which requires robust cold chain infrastructure to maintain quality and safety throughout the supply chain.

India accounts for 5.92 percent of the worldwide pharmaceutical and medicine market. Formulations and biologics accounted for most of India’s exports (73.31 percent), followed by drug intermediates and bulk medicines. In March 2022, India exported USD 2.4 billion worth of drugs and pharmaceuticals, a 23 percent increase from USD 1.97 billion in February 2022. India’s top five export destinations are the USA, UK, South Africa, Russia, and Nigeria.

Companies need to fulfill direct-to-consumer orders, ensuring timely delivery without compromising product quality. Hence, e-commerce and online grocery shopping have increased the demand for cold storage space. Another major factor driving growth in the cold storage industry is the increasing reliance on temperature-sensitive pharmaceuticals and vaccines.

As the pharmaceutical industry continues to grow and develop more biologic therapies, sensitive to temperature changes, there will be a sustained demand for specialised cold storage solutions. Technological advancements also play a role in the cold storage industry’s growth. Innovations in refrigeration, energy efficiency, and automated warehouse systems have improved the performance and sustainability of cold storage facilities, making them more cost-effective and environmentally friendly.

Applications across different industries

Cold storage is utilised across various industries for temperature control and storage conditions. In the food and beverage industry, cold storage is fundamental for preserving raw and processed foods, including dairy, fruits, vegetables, meats, seafood, and beverages like juices and wines. Warehouses with cold storage capabilities allow supermarkets, restaurants, and food distributors to stock large quantities of perishable goods while ensuring they remain fresh.

In the pharmaceutical and healthcare industries, cold storage is vital for storing vaccines, blood products, biologics, and other temperature-sensitive medications. Hospitals, clinics, and pharmacies rely on cold storage to maintain the integrity of critical medical supplies, while pharmaceutical companies use it to store bulk products before distribution.

The life sciences sector also uses cold storage for research materials, such as DNA samples and enzymes, which must be kept at specific temperatures to remain stable for experimentation and development. Cold storage is also used in the chemical industry for volatile or reactive materials at higher temperatures. Certain chemicals and industrial products, such as adhesives, coatings, and fertilizers, require cold environments to prevent spoilage, unwanted reactions, or safety hazards. Additionally, cold storage helps preserve flowers and plants in the floral industry, extending their freshness and marketability in retail stores or events.

A few select players in cold storage solutions include American Thermal System, Inc., Americold, Burris Logistics, Darwin Chambers Company, NewCold., Kloosterboer, KPS Global, Lineage Logistics Holdings, and Nichirei Corporation.

Rising cooling demand is putting a strain on electrical infrastructure and increasing emissions in several countries. Solar-powered cold storage systems reduce post-harvest loss by roughly 80 percent and increase the shelf life of perishable foods from two to 21 days. Cooling systems also use natural refrigerants like ammonia (NH3) or carbon dioxide (CO2) to collect heat from the field and start the cold chain process. Load monitoring in real time also enables data collection on location, temperature, humidity, and other variables such as CO2 levels or door opening to improve control.

In conclusion

The expansion of global supply chains and the increased demand for international trade in perishable goods drive the need for more cold storage capacity worldwide. Emerging markets, particularly in Asia and Latin America, are seeing growing demand for cold storage infrastructure as they import more fresh and frozen goods. This global expansion and the rise of more stringent food safety regulations create new opportunities for growth and investment in the cold storage sector.