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Cold chain solution providers need innovation to meet the demand of food industry

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Cold chain solution providers need innovation to meet the demand of food industry

New times demand new measures and innovations to keep up to the challenge. With the advent of new commerce – popularity of direct-to-consumer channels, boom in e-commerce and growth in demand of niche/exclusive products – there is a very interesting opportunity for brands (large and small) and fresh set of alternatives for customers. However, these growth opportunities do not come without creating significant challenges for the operations and supply chain and therefore we need to look for new solutions.

One such area that has required a significant fundamental thinking through is the cold supply chain. PCM technology-based solutions offer a possibility of disruption in the cold chain logistics industry which was largely asset driven and designed for the western world which has a different demography and retail infrastructure. The new commerce is not only looking for new technology alternatives but also inspiring the traditional kirana commerce to evolve along with it. The proliferation of dark stores is one such activity being pursued by most organized retailers to improve their access and reduce delivery times. We are also seeing an increased interest in brands building a distributor to kirana/retail store cold chain using these simple solutions.

Traditionally cold chain has implied refrigerated trucks moving products from one point to the other. Typically these refrigerated trucks would pick up a minimum of 500 kg to 1 ton of product and deliver to various destinations across the city or country. The challenge with new-commerce is typically the size of the package and the fact that it may be the only cold chain package amongst the many ambient packages being distributed. Therefore, cold chain technology of reefer trucks does not work in these scenarios, and we need something that is:

  • Independent of the vehicle form (bike, 3 wheeler or a 4 wheeler) and package size
  • Able to maintain temperature without a connection to a power source
  • Can maintain temperature from 1 hour (hyperlocal) till 48 hours (intercity courier)

Solutions based on phase change technology or “thermal batteries” have become very popular in this context. These are engineered chemicals with specific freezing and melting points (ranging from +18oC for use in chocolates to -25o for use in Ice creams). Unlike the earlier used glycols, these materials are designed to be non toxic non flammable – and therefore suitable to be packed along with food products. These are used inside a plastic pouch or a bottle (Like a gel pack) and kept in a freezer for a few hours. Once frozen, these can be put inside an insulated bag or a box and they can maintain temperatures for a desired period of time.

Unlike the earlier options of gel packs and dry ice, these solutions give a very accurate temperature control and therefore are more effective that even a reefer truck for high frequency distribution. In the same box, different temperatures can be maintained by using different PCM packs or cartridges depending upon the product to be delivered. This provides flexibility in operations and a much higher asset utilization without being dependent upon dedicated assets like reefer trucks. These solutions, also called passive cooled logistics solutions are virtually maintenance free. The box or the bag does not contain any moving parts and therefore chances of damage and downtime are virtually negligible. The units can range from 2 liters all the way to 2000 liters giving size flexibility to users.

From an economics perspective, the capex and opex are upto 50% lower compared to a refrigerated truck. Also one incurs costs only for what one uses and not the whole vehicle. These factors give this solution unparalleled economic advantage and ensure a cost effective delivery every time to the customer. Finally, these solutions eliminate the use of fossil fuels which have conventionally been driving the cold chain. Therefore, these are not only economically viable, but also environmentally sustainable.

It is interesting to note that even after multiple efforts, most of the traditional cold chain logistics companies have not been able to adapt their operations to offering these services. I believe that for such applications, both the infrastructure as well as the mindset needs to be very different from conventional cold chain operations which is focused on warehousing and trucking. At the same time, regular e-commerce vendors and last mile delivery companies like Swiggy, Dunzo, Wefast and Porter – to name a few have come to their rescue. These solutions fit their models very well and give them an edge over the traditional cold chain players. As this space matures, it is clear that adaptation to new technologies and innovation will define the winners in the race.

(The writer is Founder & CEO, TESSOL)

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