In China, fruits and vegetables are easy to perish during transport and in transient storage, which increases the operating cost of fresh food retailers like supermarkets and stores. But, if they were in a good cold chain system, their shelf life and marketable time could be extended from one day to three days, thus decreasing costs by about 30%-50%, according to a study published by Markets and Markets, India.
Food decay is the No. 1 reason for food safety risks and resources waste. And, close attention to food safety continues to drive a sharp pick-up in the cold chain market for foods represented by meat, fruit, vegetable, seafood and dairy. With the increasing per capita income and improvements in living conditions, the Chinese put a high demand for food freshness. Therefore, the demand for cold chain transport of fruits, vegetables, meats and processed foods has increased remarkably.
In 2015, meat production in China exceeded 80 million tons, vegetable 700 million tons, fruit 260 million tons, dairy products 27 million tons and seafood 60 million tons. Furthermore, large amounts of meat and frozen food are produced every year in China too.
Temperature fluctuation in cold storage and transport is one of the main reasons for food quality decline. To ensure the freshness and quality of perishable foods, China is in need of expanded cold chain logistics.
By the end of 2014, China had a freezer capacity of about 120 million cubic meters and less than 60,000 refrigerator vehicles, lagging far behind developed countries in per capital terms.
As a high-end, sub-industry of logistics, cold chain logistics will become the focus of many investors in the next few years. For example, e-business enterprises operating fresh food will spring up and support cold chain infrastructure. According to the report’s estimation, the market size of fresh food e-business was about CNY 100-120 billion and CAGR during the period of 2016-2020.
Fresh food e-business companies hardly invest in cold chain equipment, but they indirectly force the construction of cold chain distribution network, such as cold chain warehouses, logistics delivery systems and door-to-door delivery.
The cold chain logistics network can be divided into two parts—cold chain home delivery and cold chain artery, the former belonging to express and less-than-carload logistics while the latter involving supply chain management and third-party logistics. And, cold chain logistics is the sub-industry of logistics with the largest potential market despite its complex operation and high barrier to entry. Cold chain logistics will be one of the hottest sub-industries of logistics in China in the next few years if the demand for cold chain and its development space in China were taken into account.
