The cold chain market in India is experiencing growth driven by increasing demand in the dairy, pharmaceuticals, and QSR sectors. With new consumer preferences, regulatory standards, and technology integration, cold chain solutions are essential to maintain product quality and timely delivery across industries.
The cold chain infrastructure is an essential part of agriculture and allied sectors. Fresh produce like fruits and vegetables are perishable. They require a temperature-controlled supply chain involving efficient storage, transportation, and distribution to increase the shelf life of food grains, fruits, vegetables, livestock products, etc. As per the market research firm IMARC estimates, the Indian cold chain market grew to INR 1,81,490 Cr in 2022. It is expected to reach INR 3,79,870 Cr by 2028, at a CAGR of 12.3 percent during 2023-2028. The growth of the organised retail sector has propelled the demand for the cold chain market.
Organised retailers, supermarkets and hypermarkets require cold chain logistics to preserve the quality of perishable goods. A report by the Retailers Association of India (RAI) indicates that sales in the organised retail sector surged by 34 percent in 2022-23 compared to pre-pandemic levels in 2020. This growth was primarily fuelled by increased demand in quick-service restaurants and electronics. Tough regulations on food safety and pharmaceutical quality also drive the need for cold chain infrastructure.
According to a MarketsandMarkets research report, Cold Chain Market – Global Forecast to 2029, the global cold chain market, valued at USD 228.3 billion in 2024, is projected to rise to USD 372 billion by 2029, indicating a compound annual growth rate (CAGR) of 10.3 percent during the forecast period. Furthermore, changing consumer preferences towards frozen and chilled foods have intensified the need for cold chain networks to ensure consistent supply across stores. The food safety regulations further highlight the importance of cold chain management in the retail sector.
International trade too fuels the demand for the cold chain market. With reduced trade barriers and interconnected supply chains, perishable goods like fruits, vegetables, and pharmaceuticals are transported across borders, necessitating temperature-controlled environments. For instance, the UK dairy industry exports goods worth over USD 2.47 billion annually to 135 countries. Such export-focused endeavours in the dairy sector influence the cold chain market.
Social media role
It facilitates the dissemination of information and trends. Influencers and online platforms showcase diverse cuisines, products, and lifestyles, sparking demand in previously untapped markets. For instance, the promotion of the use of butter and cheese in various cuisines through social media channels has sparked a newfound fascination in Asian countries, where traditionally, these dairy products held less prominence.
According to the FAO In 2022, China experienced a 7 percent increase in butter imports, driven mainly by increased demand from the bakery industry. Efficient cold chain logistics ensures freshness and quality during transportation. Advancements in technology, such as IoT-enabled monitoring systems and blockchain traceability, enhance efficiency and reliability in cold chain logistics.
Consumer demand for fresh products year-round has intensified, requiring suppliers to invest in maintaining product integrity during transit. Overall, the complexity and volume of international trade, combined with evolving consumer preferences and regulatory standards, have fuelled the demand for cold chain solutions globally.
Refrigerated LCV segment
LCV among refrigerated road transportation is poised for remarkable growth. The agility of refrigerated LCVs makes them ideal for navigating urban areas and reaching smaller distribution points. It offers improved accessibility to a wider range of customers. Additionally, the lower operational costs associated with LCVs render them more economically viable for businesses operating within the cold chain sector. Moreover, the increasing emphasis on sustainability and environmental concerns has prompted a shift towards smaller, more fuel-efficient vehicles like LCVs, aligning with the industry’s efforts to reduce carbon emissions and minimise ecological impact.
Cold chain industry size India 2022-2029
Improving the cold chains and post-harvest infrastructure will reduce waste, create a surplus for exports, and enhance farmers’ income.
India is poised to witness the fastest growth within the Asia Pacific cold chain market during the forecast period. In 2022, the size of the cold chain industry in India was around 7.2 billion U.S. dollars, and it is forecast to reach 36 million dollars in 2027. In 2021, pharma products took up more than two-thirds of the cold chain storage in India. As of 2020, it was estimated that India had around 37.4 million metric tons of cold chain storage capacity. Due to the low manufacturing cost and governmental subsidies, India houses the world’s third-largest pharmaceutical industry.
The country is a producer and consumer of dairy products, particularly milk and curd. With a burgeoning population and a cultural inclination towards dairy consumption, the demand for efficient cold chain logistics to maintain product integrity from farm to table is imperative. As per a May 2023 report from Slurrp, India has a higher milk consumption rate than the global average, with nearly half of its population regularly consuming milk or curd. The increasing demand for dairy products in India can be linked to its fast urbanisation and improving living standards.
Besides the agriculture and allied industries, cold chain infrastructure is important for food processing, vaccines and the chemical industry. The Government of India has taken several measures to improve the cold chain infrastructure. Pradhan Mantri Kisan Sampada Yojana (PMKSY) central sector scheme was approved in 2017 with a total allocation of INR 6000 Cr to create modern infrastructure with efficient supply chain management from farm gates to retail outlets. The Government of India has approved the continuation of this scheme with an allocation of INR 4600 Cr till March 2026.
In summary
Cold chain infrastructure reduces post-harvest losses and is of utmost importance to India’s overall food security. The opportunities in cold storage infrastructure are huge. The government has adopted a multi-pronged approach to creating modern infrastructure, keeping in mind the requirements of various sectors. Moreover, India’s rapid industrialisation has spurred the growth of various sectors, including pharmaceuticals, processed food, and agriculture. These industries heavily rely on cold chain solutions to preserve the quality and safety of their products.
Additionally, the changing dietary habits of the urban populace have fuelled the demand for frozen and chilled food products. As per the ICRA report, the Indian Quick Service Restaurant (QSR) sector experienced growth between 20 to 25 percent during 2024. This surge in demand necessitates strong cold chain systems to ensure the smooth delivery of perishable goods, thereby propelling the expansion of the cold chain market in India. To facilitate the future growth of the cold chain sector, the government is already providing financial incentives to various stakeholders like the private sector, Self Help Groups (SHGs), Farmer Producer Organisations (FPOs), PSUs, local bodies, Cooperatives, APMCs etc, to build cold chains.
Conclusively, rising demand in pharmaceuticals, processed food, QSRs, government incentives, and modernisation efforts stand to drive growth in the cold chain sector, which is set for substantial expansion.
Source compiled from:
https://www.investindia.gov.in
https://www.marketsandmarkets.com
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