NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, February 22, 2018

One chronic reason for food shortages is food waste, which is caused by the lack of efficient cold chains. In developing countries, for example, food may rot before it leaves the field, because the transportation infrastructure is lacking.

Moving food to a production facility requires a refrigerated vehicle, and then the production facility needs to maintain it at a proper temperature or it will spoil. Frozen goods can melt and refreeze, leading to bacterial hazards.

The expanding middle class in China and India, along with their demands for better, fresher foods (and pharmaceuticals), are forcing industry to meet those needs.

According to the Global Cold Chain Alliance (GCAA), an industry group representing temperature-controlled logistics companies, China has seen its refrigerated warehouse capacity grow 41% between 2014 and 2016 to 107 million cubic meters. And in India, cold chain is expected to grow over the next five years with a compound annual growth rate (CAGR) of 13-15%.

Still, India’s Central Institute of Post-Harvest Engineering and Technology (CIPHET) points to 15-16% wastage of fruits and vegetables, primarily because cold storage units are near consumption centers rather than the farms.

Photo courtesy of Ly Chen.