Post pandemic cold chain on thin ice?

Post-harvest loss is omnipresent but happens at different stages along the food supply chain in countries. In developed countries where the cold chain is mature, about two-thirds of food loss occurs in consumer-facing businesses and homes. In the U.S., for example, more food reaches landfills and incinerators than any other single material, comprising 22% of discarded municipal solid waste. In North America, where the cold chain is mature and robust, losses of food in postharvest, handling, and storage are estimated at 3% for fruits and vegetables, 2% for meat, and less than 1% for seafood and milk. While, in developing countries, where less than 15% of perishable foods are protected by the cold-chain, two-thirds of the loss is in the harvest and postharvest activities. Smallholder farmers struggle to move cereals and perishable produce, meat, and dairy products from their fields to consumers. These farmers often lack adequate pre-cooling, cold storage, and refrigerated transport, and must sell their products in open-air wet markets.

Reducing food loss through cold chain creation can lift a nation. For example, Food Foolish highlights banana farmers in India, where the potential impact of a modern cold chain could increase exports from 3,000 to 190,000 containers a year, and benefit nearly 35,000 smallholder farmers.

Weak Links Exposed

Lockdown imposed to curb the spread of COVID19 has exposed several weak spots in our as-present supply chain management. This is not only limited to developing economies but has been prevalent in some developed countries as well. In Europe, demand for refrigerated storage has swelled through the roof with the closing of restaurants and other food-service providers, forcing suppliers of vegetables and meat to warehouse their products while seeking new buyers. In Europe, North America, and other regions where cold chains are effective but often specialized, the sudden consumer shift from food-service to food retail has exposed the urgent need for enhanced flexibility.

It is presumptuous to think that investment in the cold chain alone can solve all the complex problems of a broken food model now stressed by the global pandemic.

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Shelves in supermarkets were empty in the US, emphasizing the importance of cold storage infrastructure in developed economies as well

Cold Chain Expansion

Obviously, the creation of a cold chain involves investments in pre-cooling, truck, trailer, air, and marine container transport equipment, people, and information systems alongside refrigerated warehouses. The expertise to assemble these assets is readily available, costs predictable and the financial returns attractive. In food security and climate terms, the payback can be incalculable. In a world where pandemic and extreme weather require a resilient food model — especially in developing countries where food loss is greatest during harvest and postharvest, and can approach 50% — a holistic and connected cold chain is an attractive investment option. This has been well drafted by the resolution by the Hon’ble Finance Ministry to geo-tag all cold storage facilities in the country, thereby increasing the domain for connectivity and for data-collection as well.

Investing in Smarter Cold Chain

As a result of the COVID-19 pandemic, the as-existing food supply-chain model has struggled to meet rapidly shifting demand. Consumers in the developed world have witnessed vivid images of farmers destroying crops set against scenes of empty supermarket shelves. The pandemic has depleted warehouse, processing, and transportation workforces. It has shuttered entire segments of the consumer economy, including restaurants, schools, sporting venues, hotels, cruise ships, and food-service establishments. By itself, the cold chain cannot solve all the complex problems related to packaging, transportation, or the location of manufacturing and warehousing sites. But as part of a broader food security strategy, and because it touches each of these links, a smarter cold chain can provide considerable flexibility.

“Smart” is based on better and more connections: The cold chain becomes more flexible and resilient as knowledge is more quickly and broadly shared among its partners. Data becomes part of a firm’s strategic assets. Greater connectivity is essential to the success of the future cold chain. Customers in developed countries are already asking for more real-time information, data analytics, and prognostics so they can have greater visibility into the location, condition, and handling of their cargo at any given point in the cold chain. Today, the cold chain is often fragmented, with different providers and platforms at each stage that do not offer the necessary compatibility to provide the full picture.

The cold chain plays an essential role in both developing and developed countries, especially in moments of food crisis such as that brought about by the COVID-19 pandemic. In stable times, the cold chain reduces hunger, food insecurity, and GHG emissions. In times of disruption, it becomes even more essential for the most vulnerable populations to continue receiving enough nutritious, affordable food, and safe, effective medicine. Investment in a smart cold chain to create flexibility and resiliency also complements the U.S. Food and Drug Administration’s recent announcement of the “New Era of Smarter Food Safety.” This innovative approach will include the introduction of blockchain, sensor technology, the Internet of Things and artificial intelligence to improve food traceability and transparency along the cold chain. The food system is becoming increasingly digitized.

The technology and know-how to build a robust cold chain exists. Attractive financial paybacks are attainable. The underlying challenges of both the food and life science models will continue to exist even as disruptions from viruses and extreme weather increase.

The above report has been documented by Dishani Deshamukhiya who is pursuing her MBA from NIT Silchar. She has been very pro-active with market research and has a knack for content marketing. She is currently an intern with Tan90. Tan90 provides smart, energy-efficient, and cost-effective cold storage solutions. Given the scenario in the US, Tan90 has recently shipped some of their products to the country to include modularity in their cold chain.

We are changing the cold chain in India, box by box!

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