Cold chain in India so far has been limited to larger cold storage, which is being used for managing the distribution of commodities or doing longer-term storage for time arbitrage; 70-80% of investments have been made on this front.
These are basically cold stores that form a part of the cold chain but are not ‘the cold chain’ itself. This distinction is important and while there have been significant investments in the creation of cold storage capacity, more focus needs to be brought towards the cold chain. An integrated cold chain ensures proper handling at the farm gate, cold stores and during transport. An effective cold chain increases the shelf life, reduces loss, improves produce quality delivered and increases market reach. Leveraging these benefits can increase farm income, prevent food loss and make countries hubs for perishable products, like Iran for Kiwis and USA (Florida) for cherries.
Read: October 2022 Issue of Food Infotech Magazine
In our work with strawberry growers in Maharashtra, we saw first-hand the impact of access to cooling technology at the farmgate which an integrated coldchain is capable of offering. Growers in the region who have been using our decentralized cold rooms pre-programmed with strawberry-specific post-harvest, pre-cooling and storage parameters have also been able to reach markets that are 5 times further away, as compared to the earlier days when they could not have access to a coldchain. Our farmgate solar cold rooms (Ecofrost) have also reduced up to 30% loss and allowed them to hold the produce and sell only when the price was right, both of which increased the income of the farmers. Also, on a retail level, the retailers have an average loss of 25%. We had also seen that due to the right post-harvest intervention, this was brought down to 6%. The cold-chain based produce on its second day was fresher than the market produce on its first day.
However, while the cold chain drove tremendous value for the strawberry growers in Maharashtra, owing to their high-end consumer prices on the one hand, many other commodities still continue to struggle with justifying the cold chain infrastructure cost on a per kg basis. Coriander is one such commodity. However, when we worked with coriander farmers in Karnataka, we found that coriander that was sent by flight from Bangalore to Delhi ended up costing INR 130/kg, whereas, through the coldchain, it had costed only INR 80/kg. However, this phenomenon exists for just 3 months and accounts for less than 5% of the national coriander volume.
And hence we come to the question of “how do we scale up the Cold Chain in India.” The key lies in the perception of both consumers and retailers. Consumers currently associate produce that is shipped through a cold chain to be of inferior quality, lacking nutritional value and not being fresh. The primary reason for this is that they draw a parallel among cold chain, cold storage and frozen foods. In reality, produce shipped through an integrated coldchain consisting of decentralized (off-grid) farm gate cooling solutions, pack houses, cold stores and reefer trucks that retain and carry foods that are much fresher, more nutritious, crispier, apart from tasting better.
Retailers in most cases are not aware of the operational, food loss and commercial efficiencies that come built with the coldchain. With the proper Post Harvest Management (PHM) guidelines being followed through an integrated coldchain, they can stock their shelves with produce that will stay fresher longer, ensuring that they have more time to sell. With the reduction in loss, demand can be met without stiff supply-side competition and with both these benefits, the retailers can earn more from their produce. Retailers can get an 8% benefit, owing to reduced moisture loss and another 8% benefit by sourcing in higher volumes due to better negotiations, including economies of scale on the logistics front and a 6% premium from the consumer for the fresher produce that is being supplied by them.
We ran a controlled pilot trial to test the benefit the retailers obtain from customers by supplying cold chain enabled produce. Initially, we had met with resistance as the retailers were not willing to cover the extra cost of the cold chain, which ranged from INR 1-5/kg depending upon the commodity. Later, after observing that their customers had preferred the cold chain based produce, they were even ready to procure the cold chain enabled produce at a 7-8% premium. Once this perception of the consumer and retailer undergoes a change, it can lead to a significant scaling up of the cold chain in India, which transports just 4% of horticultural produce through a cold chain today.
These efficiencies and benefits have been demonstrated by certain commodities; for example, fresh milk. Even when in the cold chain, fresh milk is highly perishable. As Pawanexh Kohli, CEO of the National Centre for Coldchain Development (NCCD) puts it in his article titled “Agri-business Opportunities in Coldchain”; “Instead of milk cold stores, the dairy cold-chain developed into one that is dynamic enough to allow for daily traffic of that commodity. More so, this sector demonstrated how proper use of coldchain technology does not make the commodity more expensive, but instead, expands the selling range to capture a wider market and thereby allows for large commercial scale in operations”.
To proliferate the knowledge and build awareness around the benefits of the cold chain, we work closely with Farmers, FPOs, Foundations and retailers on a daily basis. The information on produce stored, solar energy generated and other operational parameters shared through dashboards on our app ecosystem enables them to make informed decisions and make demand and supply management more efficient.
Unleashing the potential of cold chain and building a brand around cold chain enabled produce can make Indian agricultural sector one of the leading providers for the world and address the growing concern around food security globally. It would enable us to unlock the potential of our agricultural sector. Through our market connectivity initiatives, litchis from Bihar and cherries from Himachal Pradesh have through the cold chain made their way into the homes, particularly in Mumbai, Pune and Bangalore and have boosted farm incomes by up to 30% and reduced food loss by 20-25%. This impact can be seen in other countries as well. In Kenya, our portable solar cold rooms, Ecofrost, help the local farmers pre-cool and store their mangoes and avocados at the right temperature and humidity level. This gives the small-holders the much-needed time to aggregate the produce to meet the minimum volume needed for exports. This process has prompted an increase in exports of these mangoes and avocados with growing interest and demand from European customers.
About the Author:
Devendra Gupta
Co-Founder & CEO,
Ecozen Solutions Pvt. Ltd.
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