Reasons Behind the Acceleration of Cold Supply Chain Sector in India and the Challenges

by Procurement Freelancers Team

India is a developing country that relies extensively on farming. There is no doubt about this fact. For this reason, the Indian government has initiated several reforms that are evolving the cold supply chain sector in India. India produces gallons of milk, tons of various fruits and vegetables, seafood, meat, and poultry products.

According to a survey, the Indian Cold Chain Industry is emerging at a promising 13%-15% CAGR. Experts are assuming that it is very likely to reach INR 47,200 Crore by 2022.

This makes India a favorable hub from the perspective of marketers for conducting sourcing operations. The India procurement freelancers are helping marketers to get acquainted with the economic and political scenario of India.

Major Trends Facilitating Growth of the Cold Supply Chain

The major factors that are accelerating the growth of the cold supply chain in India are listed as follows:

Consumer behavior: With the emergence of modern trade supermarkets, there has been a significant transformation in the behaviors of consumers. Owing to these changes, a newly developed food retail demand chain has emerged. In the previous days, the concept of processed, frozen, and fresh categories of vegetables. Apart from these, dairy, fruits, and meats are also found in processed form. A large number of marketers are utilizing a temperature-controlled supply chain from origin to the final consumer.

Farming behavior: Nowadays, farmers are more focusing on the cultivation of fruits and vegetables rather than other crops. There are obvious reasons for it. Farmers are reaping increasing benefits owing to this fact. It is providing them better yields and remunerative value. The risks and investments in grain crops are higher than fruits and vegetables. As a result, these days cold stores are located nearer to farms. Only a small percentage of fruits and vegetables produced are consumed in India and the larger percentage is exported worldwide. Marketers need to understand the contemporary farming scenario in India. With the assistance of sourcing experts, they are achieving this objective.

State-of-the-art healthcare: Gone are the days when India lacked in healthcare facilities. It is a different story nowadays. With the emergence of advanced medicines, vaccines, and pharmaceuticals, the implementation of modern healthcare facilities is soaring in India. However, all the medical accessories should be kept at temperatures ranging from -45 to +25 degrees Celsius. The healthcare industry in India is very likely to grow further shortly.

Challenges That are Hindering the Growth of Supply Chain

The barriers that are hindering the growth of the supply chain are listed as follows:

  • Increased share of single commodity cold storages.
  • The inadequate transport system is increasing the lead time and thereby, raising the costs of marketers.
  • Need for high investment for refrigeration accessories, paneling, and gaining more land.
  • Lack of proper infrastructure in the form of rough roads, no proper water supply, frequent power breakdowns, shortage of power supply, improper drainage systems, etc.
  • No knowledge of managing temperature-sensitive goods from the part of stakeholders.
  • A large portion of the Indian population is uneducated. The India procurement freelancers assist marketers during their procurement activities in the Indian markets.
  • Unawareness of the best in class practices and non-adherence to gold standards.

In previous times, India’s cold storage was developed mainly for items like onions and potatoes. UP, Punjab, West Bengal, and Gujarat were some of the states with the highest concentration of cold storage factories. Most of the above-mentioned states have a hot and humid climate. It is one of the major challenges when it comes to the development of cold-storage firms in India. Because of the disorganized cold-chain infrastructure, India’s food exports are also suffering. Most of the developed nations have full-proof guidelines for the import of agricultural and processed food products.

These challenges are a bane to marketers if they want to conduct their sourcing activities in India. This adverse scenario has led to a heavy loss of food and other resources.

According to research, agricultural losses were expected to be as high as 90,000 crores per annum.

The Indian government is realizing the urgency to set up a network of advanced multi-chamber cold storages.

Besides this, cold transportation infrastructure for products also needs to be developed. When it comes to transportation, the temperature should range between -30 degrees to +25 degrees. Some other factors are needed to be considered. These factors come in the form of safety guidelines, quality standards, and efficiency levels. As refrigeration requires a lot of energy, marketers need to monitor their supply chains constantly. Moreover, the Indian workforce should stay updated with the latest trends in technology to cope up with the global market and supply changes.

Marketers need to consider both sides before operating in the Indian markets. Organizations are taking help from the sourcing experts to know the contemporary scenario of the cold supply chain sector in India. If you run a supply firm in India, you need to address the challenges while developing suitable supply chain strategies.

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