Impact of consumer demands on the cold chain industry

The cold chain industry is expanding due to consumer preferences for convenience and ready-to-cook foods, driven by the rise of eCommerce and online grocery shopping, resulting in increased investments in cold storage facilities, refrigerated transportation, and advanced temperature monitoring technologies.

The cold chain industry is expanding due to consumer preferences for convenience and ready-to-cook foods, driven by the rise of eCommerce and online grocery shopping, resulting in increased investments in cold storage facilities, refrigerated transportation, and advanced temperature monitoring technologies. The cold chain is a crucial method in various industries for storing, transporting, and distributing perishable goods within precise temperature ranges to prevent spoilage, contamination, or degradation. The demand for cold chain solutions is on the rise due to evolving consumer preferences, particularly the preference for convenience and ready-to-cook foods, driven by urbanisation and busy lifestyles, requiring quick and high-quality meal options. The cold chain industry is expanding due to a shift in consumer preferences, with manufacturers and retailers offering a variety of pre-packaged, precooked, and ready-to-eat products. The industry, valued at $228.3 billion in 2024, is expected to grow at a 10.3 –percent Compound annual growth rate (CAGR).

The rise of eCommerce and online grocery shopping has increased the significance of cold chain logistics as consumers demand perfect delivery of fresh and perishable items. This has led to increased investments in cold storage facilities, refrigerated transportation, and advanced temperature monitoring technologies.

Global Cold Chain Industry

The transportation of perishable goods across borders has become more prevalent due to reduced trade barriers and interconnected supply chains. In 2022, the US exported baked goods worth USD 4.21 billion, a 1.7 percent CAGR from 2013 to 2022. Canada emerged as the leading market, accounting for USD 2.70 billion of the total export value, followed by Mexico, Japan, South Korea, and the Philippines. This growth is a significant year-over-year increase from 2021.

The UK Government has launched the UK Dairy Export Programme, committing USD 1.2 million to support farmers in boosting the international export of British dairy products. The initiative aims to create new opportunities for businesses worldwide, as the UK dairy industry exports over USD 2.47 billion annually to 135 countries. This export-driven effort could significantly impact the cold chain market growth by increasing the need for temperature-controlled logistics.

Social media is driving demand for diverse cuisines and products, particularly in Asian countries. Influencers, bloggers, and online platforms are promoting diverse products, creating curiosity and demand in previously untapped markets. In 2022, butter imports to China rose by 7 percent due to increased demand from the bakery industry. This cultural exchange, facilitated by digital platforms, is driving demand for perishable goods, necessitating efficient cold chain logistics to ensure freshness and quality during transit.

Asia Pacific Emerges

The Asia Pacific region is leading the cold chain market due to its growing population, urbanisation, and expanding middle class. This has increased demand for perishable goods like fresh produce, dairy products, and pharmaceuticals. China, the world’s second-largest market for baked goods, is also experiencing significant growth. The USDA predicts this market could reach USD 53 billion by 2025. China’s dependence on meat imports has also increased, from 1.0 percent in 2000 to 9.1 percent in 2021. Since 2019, China has been the world’s largest meat importer, importing 43 percent more meat than Japan.

The growth of convenience stores, supermarkets, and QSRs in the Asia Pacific region has increased the need for reliable cold chain solutions to maintain freshness and quality. A USDA publication shows that consumer spending at QSRs increased by nearly 5 percent before the COVID-19 pandemic, while full-service restaurant expenditure remained stable. This trend highlights the growing need for efficient cold chain logistics to support the evolving foodservice landscape in the Asia Pacific cold chain market.

LCVs

The versatility and agility of refrigerated LCVs (light commercial vehicles) make them well-suited for navigating urban environments and accessing smaller distribution points, thereby providing better accessibility to a broader customer base. Their lower operational costs, such as reduced fuel consumption and maintenance expenses, also make them a more cost-effective choice for businesses in the cold chain sector.

The growing emphasis on sustainability is driving a shift towards smaller, fuel-efficient vehicles like LCVs, aligning with the industry’s objectives to decrease carbon emissions and reduce its ecological footprint.