30th April 2020
Up to the late 19th century people only ate what they could grow, or what nearby farmers had to offer. For those living in harsher climates that meant a limited and bland winter diet, and the annual ‘spring sickness’ due to a lack of vitamins throughout the cold months.
Nobody transported fruit and vegetables beyond the shortest of distances due to the risk of spoilage, or the fear that freezing weather would cause delays and ruin entire shipments.
Then came refrigerated rail cars in the 1880s, and the first link in the cold chain was forged. Fast-forward to today and this chain is now a global phenomenon:
- The frozen food market was estimated at $219.9 billion in 2018
- It’s projected to reach $282.5 billion by 2023
Underlying this growth (CAGR of 5.1%) however is still the same basic demand: bringing exotic foods to domestic markets in perfect condition, irrespective of seasonality or geographical distance.
Growth in the cold chain
As for what’s driving this growth, there are three main points to consider:
- The increased consumption of frozen food products in emerging markets due to increases in disposable income
- Changing consumption patterns in urban centers, and a rise in demand for fresh and processed fruits and vegetables – alongside ready meals
- Developments in packaging and shelf life enhancements that open up additional markets, both domestic and international
The demand for fruit and vegetables
For frozen fruits and vegetables, where demand is projected to reach 751 million tons by 2027:
- Vegetables account for approximately 90% of the global segment in 2017
- Globally, Europe is the largest consumer and exporter of frozen vegetables
- Demand for frozen fruit is also high in Europe, due to the variable temperatures prevalent in the region
- Emerging markets such as Russia, India, and Latin America offer a huge growth potential due to low adoption rates
On-going investments in the cold chain
The infrastructure behind the cold chain has played an important role in the export and import of frozen food – an infrastructure that continues to expand in line with demand.
For example in 2018 it was estimated that the global capacity of refrigerated warehouses increased to 616 million m3 (up from 552 million m3 in 2014). Indeed, cold storage remains in high demand, and has recently been described as the ‘hottest new real estate investment’.
Retailers however face bigger challenges as individual cold chains lengthen. This is the problem of uneven coverage and distribution, where certain sections of the chain are overprovisioned and others lack a sustainable capacity.
Add in an international dimension, and the numbers tell their own story:
- $14 billion is the estimated annual wastage in India’s agricultural sector due to inadequate cold chain capabilities
- 30% of China’s vegetables and fruit are also impacted by poor refrigeration
Storage is of course a key factor. Another is transportation, and maintaining a constant temperature while loads are shipped.
At any time of day or night there are millions of tons of frozen food in transit. And as cold chains have become more efficient,their cost has markedly dropped. For example, it’s now cheap enough for fish caught off Norway, to be shipped to China for processing (taking advantage of low labor costs), and then moved to the US for consumption.
Making this work is a truly intermodal endeavor across rail, sea, air, and road, from source to supermarket. A multitude of ‘moving parts’, each one a potential failure point that can lead to spoilage and lost loads.
For retailers wanting to reduce this risk, the need for dependable, high-performing refrigerated transport is therefore of paramount importance. Investing in the latest harvest of cherries, lychees, peas, or spinach might make commercial sense – but not if they arrive in poor condition or with a severely restricted shelf life.
Putting knowledge to work
It is here that expertise is a vital commodity. At Thermo King we’ve spent years researching the perfect temperature for individual products and minimizing product spoilage.
What’s more, our product range is fully intermodal, up to and including solutions for last mile deliveries. Our mission is to help retailers make the most of their investments in distant food crops by ensuring:
- Consistent temperatures for any load or journey – with no fluctuations even when multiple door openings and deliveries are involved
- Responsive visibility – to monitor the conditions of loads in transit, and the ability to react instantly to any emerging problem
- 24/7 urban access – with quieter running, lower- and zero-emission technologies
Protect your cold chain investments
When moving large quantities of fruit and vegetables across an extended cold chain, it’s reassuring to know that the best technology, knowledge, and service infrastructure is backing you up every step of the way.
This is the promise offered by Thermo King. To learn more about our retail solutions, visit our dedicated webpage.