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INTERVIEW

“Demand for fast&fresh foods propels growth of cold chain industry”
Monday, 29 April, 2019, 08 : 00 AM [IST]
Nandita Vijay, Bengaluru


FnbNews India is one of the fastest-growing countries, in terms of the cold chain industry, in the world. This is primarily because of the changing consumption or eating patterns, an overall improvement of the quality bar, and making our products export-worthy to developed countries.

All the cold storages built recently, meet the best standards and are quite comparable with the developed countries. The design parameters of cold storages can still improve.

Due to various constraints  like land cost and the availability of the right size of land, among others,one ends up compromising on the design to optimise on the available space.

However, India is in no way less than any other country in terms of technology and controls, Sunil Nair, chief executive officer, Snowman Logistics, told Nandita Vijay in an e-mail interaction.

Excerpts:
How would you describe the scene for integrated temperature-controlled logistics services in the food and beverage space in India and globally?
Fast-paced lifestyles, changing eating habits and higher purchasing power of consumers are not only fuelling the expansion and growth of quick service restaurants (QSRs) across India, but also of the cold chain logistics industry, which helps food reach fast and fresh.

The market for restaurants including cafes and QSR is expected to grow between 15 to 20 per cent CAGR (compound annual growth rate), as per various research reports published recently.

This not only pushes the QSR consumption, but also promotes the processed food and beverages industry, and results in backward integration to farms.

Other major contributors of growth in  temperature-controlled logistics is from export, wherein huge amounts of seafood and processed food are being sent to other countries.

Pharma is another sector which is growing at 18 to 20 per cent CAGR, which is quite promising. India is one of the fastest-growing countries, in terms of the cold chain industry, in the world.

This is primarily because of the changing consumption or eating patterns, an overall improvement of the quality bar, and making our products export-worthy to developed countries.

All the cold storages built recently, meet the best standards and are quite comparable with the developed countries.

The design parameters of cold storages can still improve. Due to various constraints  like land cost, the availability of the right size of land, among others,one ends up compromising on the design to optimise on the available space.

However, India is in no way less than any other country in terms of technology and controls.

What are the visible trends?
The cold chain industry has evolved over the years, and has played a crucial role in helping other industries thrive, ultimately boosting the Indian economy.

The Indian cold chain industry is expected to grow at a CAGR of 15.4 per cent, over the next four years as per reports  through increased investments, modernisation of existing facilities and the establishment of new ventures, via private and government partnerships.

The Indian cold chain market is highly fragmented with over 3,500 companies in the whole value system, with organised players making up a miniscule percentage of the cold chain market.

However, the market is gradually getting organised and the demand for multi-purpose cold storages is rising.

What are the challenges you sight in this space?
There are several challenges plaguing the Indiancold chain sector, a few of which are:

Seamless refrigerated transportation network: Cold chain logistics is built on the backbone of a seamless refrigerated transportation network. Unfortunately, a large part of the cargo loaded onto refrigerated vehicles are at the wrong temperature.

Sometimes the cargo is left for too long on the loading decks, which makes the carrier run the risk of the load being rejected by the receiver. Sensitive cargo is also put at risk in case of the transport refrigeration unit failing.

Quality cold warehouse infrastructure: Cold storage infrastructure which has been built in the past, is suitable to store only a single commodity.

As a result, they are rendered futile for multi-commodity storage, something every warehouse needs to be equipped with.

Low awareness: With a large part of the industry being made up of unorganised players, it is difficult for them to invest in the technology and processes required to  build high-quality storage facilities.

Thus, the onus lies with the manpower, most of whom are not trained in handling temperature-controlled products.

Uneven cold storage distribution:Cold storage warehouses in India are not evenly distributed and are mostly equipped for single commodity storage.

There needs to be an even distribution of facilities across India mapped to the demand and seasonality.

Electricity availability:  There is a definite increase in the operating costs due to the peak power deficit which India faces at the moment.

The agrarian states in India especially need to be well equipped to handle the power requirements, as they are the ones where the majority of cold storages are found.

Major inflation in cost: Power, diesel and labour are the major cost elements of cold chain. These costs have been increasing above inflation year-on-year.

This puts in a lot of pressure on cold chain operators, and thus acts as a discouragement.

Could you share developments at Snowman in terms of infrastructure, funding and expansion?
Every cold storage of ours adopts the latest available technology without any compromise.

Our facilities are well designed to take care of any type of products. We can maintain temperatures ranging from +25°C to -25°C, which is the widest range available in India.

The facilities are well designed and operated to meet best quality standards globally, i.e., BRC and ISO 22000.  

In addition to building the best-in-class infrastructure, implementing the best of processes for efficiency, quality and service is must in this business.

A cold storage operator has to provide services to completely unorganised sector to the top global brands.

We have included certain information technology (IT) tools to come up with the best service levels.

We have also introduced technology by which we can monitor temperature at the chamber level through our mobile phones.

A 24x7 command centre has been made functional to monitor and troubleshoot our vehicle and cold storages.

An app-based touring and auditing system allows our customers to get almost live visibility of the trucks unloaded and loaded at our facility, right at the SKUs (stock keeping units)level information.

What are Snowman’s plans for 2019?
We will expand with new facilities at Siliguri, Coimbatore and Krishnapattanam.In addition, our focus is to get into more value-added services, which can be then offered to customers, so that we become a one-stop solution for them, for all their needs other than manufacturing and retailing.

Our focus on IT, to create more information and visibility will continue to be there in terms of investing time, energy and money.
 
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