Cold Chain Gains Traction in Emerging Markets

The 2016 Global Cold Chain Alliance (GCCA) Global Cold Storage Capacity Report shows that warehouse capacity has experienced steady growth since 2014, the last time the survey was conducted. Emerging markets – including those with undeveloped transport infrastructure – played a key role in this trend.

Supply chain managers may assume that leading industrial nations would be driving the growth for controlled atmosphere warehousing, but recent research suggests that this is not the “cold case” it appears to be.

According to the GCCA report, total global capacity was 600 million cubic meters in 2016, an increase of 8.6% since 2014. But the data also reveals that much of the increase in refrigerated warehousing space came from new construction in emerging markets.

“It's exciting to see such strong growth and new construction around the world,” said Corey Rosenbusch, President & CEO, GCCA. “We have been watching the shift in capacity as a product of middle class growth in emerging markets like China and India even as consolidation occurs in other developed markets.”

Construction also occurred in markets that previously had little cold storage capacity, namely Uzbekistan and Turkey. The United States, Mexico, and Canada each indicated growth in refrigerated warehouse capacity since 2014.

Reports from Europe, however, indicated that refrigerated warehouse space declined in 2016 in several countries. Turkey and Great Britain were exceptions. The expansion in Great Britain was largely due to retailers' construction of distribution centers for private use.

According to Rosenbusch, most of the new building has been done at ocean cargo load centers or emerging nations, even if roads and highways are less than optimal.

“In Russia, for example, we had been seeing shippers just take the reefer boxes off the ships and stack them portside. They'd pay the demurrage fees while using this container hotels as DCVs,” he says. “That's clearly not a sustainable model.”

Written by Dr. Victoria Salin, a professor in the Department of Agricultural Economics at Texas A&M University, the GCCA report includes analyses on growth trends in global capacity, market development indicators, and characteristics of refrigerated warehouses around the world.

“Having tracked the trends in refrigerated warehousing for several years, we are now able to establish that large-format supermarket retailing is a leading indicator of warehousing in nearly all countries (India is the exception),” Salin says. “In countries where the rate of supermarket expansion exceeded 25% per year, the refrigerated warehouse market penetration per capita grew by 20% or better.”

Salin is also the World Food Logistics Organization (WFLO) Scientific Advisor – a core partner of the GCCA. She says this recent analysis gives insight on the consumer and points out the countries where refrigerated warehouse capacity has not kept pace with the growing population.”

The report features cold storage market data on 52 countries. During the last two years, approximately 11 million cubic meters of additional refrigerated warehouse capacity has been added to the GCCA database from countries that were included for the first time in 2016. The newly added countries were South Korea, Peru, Mauritius, Ecuador and Kenya.

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