Cold supply chain trends in India: 2023 retrospective and 2024 outlook

The cold chain industry in India, experiencing rapid growth, offers temperature-controlled logistics for perishable goods. It faces critical challenges like food wastage despite its growth. Inefficiencies in storage and last-mile delivery impact both economics and the environment. Addressing these issues is vital for sustainable growth.

The cold chain industry in India, experiencing rapid growth, offers temperature-controlled logistics for perishable goods. Significant changes in 2023, driven by increased demand for processed foods and the expanding retail and e-commerce sectors, have transformed the cold supply chain. According to a report by Expert Market Research, the Indian cold chain market reached INR 1,678.79 billion in 2023 and is projected to grow at a 14.3 percent CAGR, reaching INR 3,742.98 billion by 20321. IMARC Group forecasts the market to hit INR 3,798.7 billion by 2028, showcasing a 12.3 percent CAGR from 2023 to 2028. And while the industry has become more resilient, efficient, and responsive, it continues battling several challenges.

Current challenges in the cold supply chain sector
Despite a promising direction, India’s cold supply chain encounters multiple hurdles requiring strategic solutions. A major issue is significant food wastage within the chain due to inefficiencies in storage, transport, and handling. These inefficiencies impact economic and environmental sustainability. Moreover, the need for smooth integration in final deliveries exacerbates the challenge, causing delays and disruptions for temperature-sensitive goods. Inadequate infrastructure and technology integration in the last mile further impedes timely and temperature-controlled deliveries, risking spoilage and waste of perishable items.

Addressing these challenges will be imperative for the cold supply chain sector to fully realise its potential and contribute effectively to the evolving needs of the Indian market. Innovative solutions and collaborative efforts are essential to streamline last-mile deliveries and minimise food wastage, fostering a more efficient and sustainable cold supply chain ecosystem.

Key trends of 2023
Technological integration: In 2023, technology was pivotal in reshaping the cold supply chain landscape. The integration of Internet of Things (IoT) devices, sensors, and real-time tracking systems became ubiquitous. This enhanced visibility across the supply chain. It also allowed stakeholders to monitor the condition of goods in transit. Temperature-sensitive products, such as pharmaceuticals and perishable foods, benefitted from advanced monitoring systems, reducing the risk of spoilage and ensuring compliance with regulatory requirements.

Data analytics for predictive maintenance: Data analytics emerged as a game-changer in the cold supply chain. Predictive maintenance algorithms powered by artificial intelligence were employed to forecast equipment failures and prevent downtime. This proactive approach reduced operational costs and ensured that cold storage facilities operated at peak efficiency, maintaining the integrity of temperature-sensitive products throughout the supply chain.

Government focus on building cold chain infrastructure: Modernising cold chains and post-harvest infrastructure to significantly reduce food waste, create a surplus for exports, and enhance the income of farmers has been on the government agenda since the launch of the National Logistic Policy. In line with achieving the Sustainable Development Goal of zero hunger, the focus on improving cold storage infrastructure for agricultural and food-related cold chains has been instrumental in the growth of cold warehousing and transportation in 2023. This growth was particularly pronounced in tier-II and tier-III cities, reflecting the maturation of the cold supply chain beyond major urban centres.

Rising demand for last-mile delivery solutions: With the proliferation of e-commerce, there was a surge in demand for last-mile delivery solutions with temperature control capabilities. This trend was especially evident in the pharmaceutical and food sectors. Cold chain logistics providers adapted by investing in electric vehicles with integrated cooling systems, ensuring the safe and timely delivery of temperature-sensitive goods to the end consumer.

Regulatory compliance and quality assurance: Regulatory scrutiny and consumer awareness regarding product safety and quality increased in 2023. Cold supply chain stakeholders focused on ensuring compliance with regulatory standards, particularly in pharmaceuticals and food. The adoption of blockchain technology for supply chain transparency gained traction, enabling end-to-end traceability and assuring consumers of the authenticity and quality of the products they purchase.

Outlook for 2024
Continued technological advancements: In 2024, the cold supply chain is expected to witness further technological advancements. The integration of blockchain for enhanced traceability, the use of artificial intelligence for predictive analytics, and the adoption of 5G for real-time data transmission will be at the forefront. These technologies will improve operational efficiency and bolster the industry’s ability to respond rapidly to dynamic market demands.

Sustainable cold chain practices: Sustainability will be a key focus in 2024, driven by environmental concerns and consumer preferences. Cold supply chain stakeholders are anticipated to invest in eco-friendly refrigeration solutions, energy-efficient transportation, and renewable energy sources. This shift towards sustainability aligns with global trends and reflects a commitment to reducing the industry’s carbon footprint.

Collaborative partnerships across the supply chain: Collaboration will be a hallmark of the cold supply chain in 2024. To address the complexities of the supply chain, stakeholders are expected to form strategic partnerships and alliances. This includes collaborations between logistics providers, technology firms, and regulators to create a seamless and integrated cold supply chain ecosystem.

Government initiatives and incentives: Central and state governments will likely play a more active role in shaping the cold supply chain landscape. Initiatives and incentives to promote investments in cold storage infrastructure and technology are expected to be introduced. This support will be crucial for the industry to meet the growing demands of a diverse and expanding market.

Focus on skill development: Recognising the need for a skilled workforce to manage the complexities of the cold supply chain, there will be an increased emphasis on skill development and training programs. This includes training for cold storage facility personnel, logistics professionals, and those involved in maintaining temperature-sensitive transportation.

As 2023 draws close, India’s cold supply chain faces a pivotal juncture between innovation and adaptation. Trends shaping this year set the stage for a stronger industry. In 2024, stakeholders aim to adopt technological advancements, sustainable practices, and collaborative efforts to meet the evolving needs of a dynamic market. The cold supply chain in India is not just a logistics facilitator; it is a critical enabler of economic growth, public health, and consumer satisfaction.