Cold Chain Market Size to Grow at a CAGR of 17.43% from 2022 to 2027

Cold chain market size is estimated to grow by USD 358.49 billion from 2022 to 2027. However, the growth momentum will progress at a CAGR of 17.43% during the forecast period. Technavio has announced its latest market research report titled Global Cold Chain Market 2023-2027.

Read: April 2023 Issue of Food InfoTech Magazine.

The market is segmented by Application (Meat fish and seafood, Fruits vegetables and beverages, Dairy and frozen desserts, Bakery and confectionery, and Healthcare), Type (Refrigerated warehouse and Refrigerated transportation), and Geography (North America, APAC, Europe, South America, and Middle East and Africa).

The market share growth by the meat fish and seafood segment will be significant during the forecast period. It is the largest segment of the global cold chain and is expected to remain the largest segment throughout the forecast period. Products such as meat should be refrigerated or frozen after processing and before shipment in order to limit the growth of pathogens and reduce the risk of spoilage.

The use of RFID in cold chain logistics is the key factor driving the global cold chain market growth. Cold chain logistics transport millions of tons of perishable and temperature-sensitive products that are manufactured, stored, transported, or distributed around the world. These products include vegetables, fruits, fish, flowers, meat, and dairy products as well as medical products such as blood, medicines, organs, vaccines, plasma, and tissues. All of these products are temperature sensitive, which affects their quality. Supply chain management for such products, therefore, requires rapid decision-making and planning while these products are transported within hours of production. Planning and quick decision-making can be aided by using standard RFID tracking and tracing. A cold chain radio frequency identification (RFID) system includes tags, sensors, and readers that communicate with each other via radio transmission. RFID tags can also be used to store a limited number of temperature readings when equipped with sensors and battery power. Additionally, adding sensors to labels can track products throughout the supply chain and alert companies when products are not stored at the proper temperature.

RFID devices can provide more accurate readings than current temperature monitoring systems without opening the package. These devices are placed in refrigerated transportation vehicles to help businesses monitor the ambient temperature on the road, based on which they can efficiently control and manage the temperature inside the vehicle. This helps maintain the quality of the products in their vehicle. Additionally, RFID tags collect a variety of information such as humidity, light, radiation, shock/vibration, and gas concentration. Businesses can analyze this data and take the necessary steps to control quality and distribute their products efficiently. Therefore, using RFID for tracking and tracing in cold chain logistics is anticipated to drive the growth of the cold chain market during the forecast period.

Major Trends:

The growing number of M&A activities will fuel the global cold chain market growth. The competition in a fragmented cold chain market and rapidly evolving technologies pose significant threats to vendors operating in the market. In recent years, intense competition has led to an increase in the number of strategic alliances and M&A activities. In the face of increasing demand for the cold chain from various end-users, suppliers are opting for M&A activities and strategic alliances to improve their market reach and customer base. Furthermore, intense competition in the market is expected to force incumbents to increase their market presence through these activities. Vendors in the global cold chain market are investing heavily in joint ventures and acquisitions to gain a significant share of the cold chain market and expand their presence in new regions. The market has seen a significant increase in the number of strategic alliances and partnerships with competitors operating in different geographies and companies providing cold chains. This helps vendors improve operations and expand their geographic footprint. Such factors are anticipated to drive the growth of the cold chain market during the forecast period.

Key challenges:

Lack of infrastructure in developing countries can impede the growth of the market. Due to the fixed costs of establishing and maintaining a cold chain, cold chain penetration is low in developing countries such as India. Customers, especially farmers, do not opt ??for refrigeration in these countries due to increased operating costs and higher prices for products such as fruits and vegetables. For example, when a farmer uses the cold chain to improve supply chain management, the price of the product can increase and affect profitability. In addition, the lack of technical knowledge and inadequate transportation options are bottlenecks in implementing cold chains for customers in these regions. Farmers lack the technical knowledge to implement a cold chain and are unable to store and keep their produce fresh. These factors make it difficult for customers to access cold chain facilities and increase food waste.

Most of the food produced in India is exported. However, due to the country’s lack of proper cold chain infrastructure, the country wastes two-fifths of its food every year due to inadequate transportation and storage facilities. This will continue to be a major challenge for the cold chain market during the forecast period.

Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.