The tidal wave of media coverage around COVID-19 vaccines has thrust the cold-chain market into a global spotlight, but cold-chain technology isn’t just for brands in the life sciences space. Cold-chain packaging and shipment play a growing role for brands in the food industry as well. While most people typically think of the cold chain as a network of refrigerated warehouses and cargo vehicles that keep products at a controlled temperature, packaging is the common link that connects them all and ensures the product maintains its temperature as it moves throughout the supply chain. Understanding the trends and projections for cold chain will help food brands prepare more efficiently for their next steps.
As consumer demand for high-end food products grows around the world, brands need to ship products across greater distances quickly, while maintaining high standards for quality. According to Statistics MRC, the global cold chain market is projected to grow 400% from 2018 to 2027, reaching a total value of more than $600 billion. While the CPG portion of the market is still dominated by dairy and frozen dessert items, bakery and confectionery products are forecast to generate increased demand for cold-chain services. A growing middle-class population in developing economies drives demand for fresh produce, which requires cold chain solutions to move from agricultural regions to population centers.
A Need for Investment in Sustainability
Keeping products at a controlled temperature requires refrigeration, both in storage facilities and transportation vehicles, and that refrigeration consumes a lot of energy. While cold-chain storage and shipping can be energy-intensive, the increase in demand for cold food products is fueling innovation in efficiency and sustainability.
Many providers are investing in sustainable cold-chain solutions, but there is no established leader in this space. Hydrofluorocarbons (HFCs) are the most commonly used refrigerants and may contribute more to global greenhouse gasses than carbon dioxide. Penske Logistics is exploring compressed natural gas as an alternative to diesel-powered refrigeration systems for trailers.
Others companies look to electric vehicles as a more sustainable solution for keeping products at a controlled temperature in transit. Improved insulation and remotely controlled cooling systems also look to improve energy and fuel consumption from vehicles through involved in the cold chain. As adoption of reusable packaging continues to grow, reusables may also provide a sustainable solution for products in the cold chain.
Growing Role of Third-Party Logistics
Third-party logistics (3PL) play a growing role in processing and packaging cold chain food products. 3PLs provide a variety of services that may not be cost effective for frozen food brands to handle themselves, including storing frozen product until it’s time to fill specific orders, transporting frozen foods to be packaged at retailers and preparing proteins for export outside the U.S. This role for 3PLs is particularly prominent in the ecommerce space, as few companies that specialize in ecommerce have the need to maintain temperature-controlled distribution centers of their own. As efficient ecommerce distribution becomes the norm in the B2C space, rising expectations for fast B2B shipping also provide an opportunity for temperature controlled 3PLs to step up and grow their presence in the food supply chain.
As cold-chain technology advances, it will create opportunities for many more brands in the food industry to distribute fresh products more efficiently and across greater distances. If your brand needs to add cold-chain distribution capabilities or improve existing capabilities, Adept can help. Our team includes highly experienced consultants in both cold chain packaging and logistics. Get in touch to discuss solutions to your cold-chain challenges.