LONDON — The global refrigerated warehouse market is projected to record a compound annual growth rate (CAGR) of more than 14 percent to 2020, driven by the rise of end-to-end integrated services, according to the latest research report released by Technavio.
“Several cold chain service providers have recently started to offer end-to-end integrated services to end-users in the global refrigerated warehousing market. They are providing cold chain management services to customers and participating in their decision-making processes. Many service providers offer end-to-end cold chain management services like inventory management, order scheduling, order forecasting, warehousing, and delivery management,” said Jhansi Mary, one of Technavio’s lead industry analysts for warehousing and storage.
Some of the other driving forces behind the growth of the global refrigerated warehouse market include:
• Rise in trade of frozen food and seafood products
• Need to reduce food waste
• Growth of organized retail sector
RISE IN TRADE OF FROZEN FOOD AND SEAFOOD PRODUCTS
The demand for seafood continues to increase globally, and the significant population growth in China, India, and Brazil is an important demand driver in the frozen fish and seafood industry. Increased demand for seafood has led to a rise in its import and export within countries, which require cold storage and transportation. China and Norway were the largest exporters of seafood in 2015. China’s exports amounted to $20 billion, and Norway exported $10 billion worth of seafood products. While China exported to almost all countries, Norway’s exports were mostly to European nations. Fresh salmon constituted the majority of Norway’s fish and seafood exports. China’s exports are estimated to grow at a CAGR of 15.68 percent over the forecast period. The European Union was the largest importer of seafood, worth $26 billion. The U.S. and Japan followed, with seafood imports by the U.S. amounting to $19 billion in 2015.
NEED TO REDUCE FOOD WASTE
According to United Nations Environment Programme (UNEP) and World Resources Institute (WRI) about one-third of the food produced every year is wasted. Fruits and vegetables are wasted at about 25 percent of the production level. In addition, perishable food products are often exposed to fluctuating temperatures during transit and handling, which adds to the waste. The global population is expected to increase at a rapid pace in the future, which is expected to increase the demand for food products. Therefore, because of the increase in the global population and the significant food waste, the need for effective cold chains around the world is expected to increase substantially in the future. Thus, the increased need to reduce food waste is one of the key drivers contributing to the growth of the refrigerated warehouse market.
GROWTH OF ORGANIZED RETAIL SECTOR
Organized retail refers to the modern form of retail or chain stores that are owned or franchised by a central store or entity. The stores are organized and use better store systems technology, including better refrigeration, than traditional/unorganized retail stores and provide consumers with convenience and foods that are safe to consume. Organized retail formats include supermarkets, hypermarkets, forecourt retailers, discounters, and convenience stores. Today, an increasing number of consumers are purchasing grocery items, including frozen and chilled food, from organized retail stores. Asia-Pacific (APAC) is witnessing a steady increase in the number of modern retail stores. With the growth of the organized retail sector and the increased consumer demand for frozen and chilled food, demand for cold chains has increased and is expected to increase further during the forecast period.
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Publication date: 7/22/2016