An Overview of
India’s Cold-chain Infrastructure
Keith Sunderlal
IARW/WFLO
Outline
• Cold-chain – A Historical Perspective
• India’s Food Economy
• Cold-chain in India
• Fast Changing Retail Landscape
• Role of 3PL
• Current Status of Cold-chain in India
• Major Trends & Developments
• Key Challenges
Cold-chain
A Historical Perspective
Refrigerated movement of temperature sensitive
goods is a practice that dates back to 1797 when
British fishermen used natural ice to preserve their
fish stock. This trend was seen in the late 1800s
for the movement of food from rural areas to urban
consumption markets, namely dairy products
India’s Food Economy
• India is one of the largest producers of fruits and
vegetables in the world
• Inadequate handling infrastructure and methods
result in a value-loss of over 30% of all fresh
produce
• India’s scorching economic growth graduates
millions of consumers from basic foods to a
diverse food basket
Cold-chain in India
• Evolution from a cold-storage business
• Impetus to integrated Cold-chain logistics was
provided by McDonalds in mid-90s
• Thrust to fresh produce handling was provided
by export-oriented horticulture, again in mid-90s
• Unfortunately, the past decade was
disappointing in terms of development of the
sector
• What has changed – Retail & 3PL
Retail Sector
• Current market size is $258 billion
• Projected: $415 billion in 2010 and over $600
billion by 2015
• India's private consumption share of GDP is
64%
• The Food and Grocery (F&G) market in India is
estimated at $168 billion, thereby constituting
65% of the total retail market.
Source: Technopak Advisors
Retail Sector
• Organized F&G segment is $1 billion (13% of
the total organized retail market)
• Organized F&G retail is only 0.6% of the total
F&G segment in the country
• The overall F&G market is expected to grow at
8% over the next few years.
• Rural market is 60 per cent of the total retail
market
Source: Technopak Advisors
Retail Sector
• Highly concentrated in the top 20-25 cities.
• Approximately 70% of the country's high income
households are located in these cities.
• Top 24 cities have 32% of urban population and
are about 50% of the total urban market
• Top 119 cities have 51% of the urban
population, and are 72% of urban market
Source: Technopak Advisors
Third Party Logistics (3PL)
• India’s 3PL market is all set for explosive organic
growth
• Current market over $90 billion
• Expected market over $125 billion by 2010.
• Outsourced logistics currently 25% of market will
gave fastest growth of over 16%
• $300 billion worth of infrastructure investments
Source: “India Logistics Outlook 2007", Datamonitor
Third Party Logistics (3PL)
• Logistics industry is characterized by dominance
of a disorganized market
• Over 70 % of freight movement is via roads
• 2% of roads (National Highways) handle over
40% of the national road freight traffic
• Average speed of 20 mph vs. over 60 mph in
mature logistics markets
• 3PLs are increasing investments to become
end-to-end integrated players
Source: “India Logistics Outlook 2007", Datamonitor
Indian Cold-chain Industry
• Estimated size of the Indian cold-chain industry
is Rs. 8,000-10,000 crores (US$ 1.80 - US$ 2.27
billion)
• Cold-chain industry is expected to grow at 20 to
25% annually
• Estimated that this industry will grow to over Rs.
40,000 crores (US$ 9.09 Billion) by 2015
Source: SCS Agribusiness Consultants Pvt. Ltd.
Indian Cold-chain Industry
• Overall logistics and supply chain management
is approximately a Rs. 60,000 crores (US$ 13.64
billion)
• Expected growth over 10% during the next five
years
• Industry is largely fragmented and unorganized
• Share of the organized sector is under 25%
Source: SCS Agribusiness Consultants Pvt. Ltd.
Indian Cold-chain Industry
Indian Cold-chain Industry
• Processed food like Jams & Jellies
• Indian chain of restaurants. e.g. Nirulas
• Indian beverage, ice cream, milk & milk
products market e.g. Amul, Mother Dairy, Verka
• Indian meat, egg market
• Indian frozen mood market
• Fresh fruits & vegetables, super markets
• Organic foods
Major Trends & Developments
Serving India’s Fresh Produce Exports
• Growing realization of potential of India as a
supplier of fresh produce
• Evolving from traders to Grower/Shippers
• Investments by large domestic corporations
• Large multinational groups seeking partnerships
Major Trends & Developments
Domestic Perishables Distribution
• Imports of fresh produce have been a driver of
reform
• Technology adoption is still at preliminary stage
• Retail players seeking quality produce are
pushing for upgrades and investing directly
• Several ventures seeking to be category
suppliers
Challenges for the Future
• The ownership challenge
– Whose baby is it?
• The service fee challenge
– Who will pay for it?
• The QA challenge
– Whose responsibility is it?
Abundant Opportunities
Let’s All Go Out And Grab Them
