Northbrook, IL 60062 -- (SBWIRE) -- 05/13/2022 -- The global cold chain market size is estimated to be valued at USD 233.8 billion in 2020 and is projected to reach USD 340.3 billion by 2025, recording a CAGR of 7.8%. The growing demand for organized retail, as well as the increase in awareness among consumers to mitigate food wastage, are propelling the demand for cold chain. With the advancement of recent technologies, the usage of cold chains in the food and beverage sector helps in preventing the degradation of food quality. The development of technology has contributed to the growth of cold chain market around the world. The Asia Pacific region is growing fastest owing to modern technologies, government support, and an increase in the export of food and beverages.

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Market Dynamics:

Drivers: Rising consumer demand for perishable goods

Consumers are now more aware of health and wellness, as well as the effect that food nutrients, especially protein, have on overall physical and mental growth and development. This has resulted in a change in the consumption pattern of perishable foods, such as dairy products, fruits and vegetables, and high-protein animal-based products (such as meat, eggs, and fish and seafood).

Emerging economies in the Asia Pacific and Latin America are seeing a high demand for perishable food products. This can be attributed to the rapid urbanization, changing tastes and preferences, and the rising disposable income of consumers in these countries. The market potential for processed and frozen food products is also high in these countries due to their lower adoption rates. The consumption of ready-to-eat meals, such as frozen pizzas, desserts, and snacks, is rising steadily in these countries. The frozen foods market requires an effective cold storage system so that the chemical composition of food items stays intact even after several months. With the increased international trade of these foods products, the demand for cold storage systems is expected to increase in the coming years.

Restraints: High energy costs and the requirement of significant investment capital

In the food industry, a major focus for manufacturers, retailers, and consumers is to ensure food quality and safety by preventing premature expiry, decay, and spoilage. To achieve this, it has become necessary for service providers to invest in modern cold storage facilities, advanced vehicles, and system technologies. However, high energy costs are a growing concern for cold chain providers (energy costs are exceptionally high in North America and Europe). Refrigerated storage facilities use traditional fluorescent light fixtures, which are switched on throughout the year as it is mandatory under regulations. Governments of numerous countries have been attempting to bolster the infrastructure investment of the cold chain, pre-cooling facilities, refrigerated storage and transport, packaging, and information management systems. Fuel costs and efficient management of fuel consumption are some of the other major concerns for cold chain providers, as the requirement of refrigerated vehicles in cold chains, especially in North America and Europe, has increased over the last few years. On the other hand, emerging economies are facing different issues while operating cold chains. The annual operating costs for cold chain businesses are much higher per cubic feet.

Opportunities: Growth in the organized retail sector

The development of retail channels and chains in the form of supermarkets, hypermarkets, and convenience stores is a major factor driving the growth of the cold chain market. Also, retail chains have developed to an extent where some of the producers have their own in-house refrigerated warehousing facilities. Large food retail chains such as Walmart, Tesco, Spar, and 7-Eleven are expanding their outlets in developed countries such as the UK, Germany, and the US, and in emerging markets such as China, Brazil, and Argentina. For instance, Walmart is the largest American multinational retail corporation with over 11,000 stores across 27 countries. It has a large fleet for the transportation of perishable goods and an effective distribution network. It also hires 3PL refrigerated warehousing service providers to transport perishable foods to its retail outlets efficiently. The emergence of such large retailers and their expanding operations in international trade are creating growth opportunities for the refrigerated warehousing and refrigerated transportation market. Governments in many nations are taking initiatives to reduce food and agricultural waste by framing food wastage policies and supporting food-related industries, such as the cold chain industry.

Challenges: Lack of proper infrastructure in emerging countries

The cold chain industry is highly fragmented, mainly in the emerging markets across Asia, Africa, and South America. Cold chain service providers in these regions do not have the resources or the technology needed to build high-quality cold chain facilities. Lack of proper food storage, processing, and cold chain logistics, together with the weak organization and implementation of controls for compliance with standards, remains a serious challenge in these countries. From procurement to delivery at retail, cold chain service providers face many challenges in a cold chain network. Countries in Asia Pacific and South America lack efficient transport infrastructure and are not well connected. The missing links in these networks continue to constrain route choice, while insufficient capacity and the poor quality of infrastructure add costs and time to the transit. The cold chain systems in these markets are not integrated and compatible for use for multiple perishable commodities, which poses a major challenge to market growth.

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Key Market Players:
Americold Logistics (US), Lineage Logistics Holdings (US), Nichirei Corporation (Japan), Burris Logistics (US), Agro Merchants Group (US), Kloosterboer (Netherlands), United States Cold Storage (US), Tippmann Group (US), VersaCold Logistics Services (Canada), Henningsen Cold Storage Co. (US), Coldman (India), Congebec Inc. (Canada), Conestoga Cold Storage (Canada), NewCold (Netherlands), Hanson Logistics (US), Confederation Freezers (Canada), Seafrigo (France), Trenton Cold Storage (Canada), Merchants Terminal Corporation (US), and Stockhabo (Belgium) are the leading cold chain market vendors.

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