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The global cold chain logistics market was valued at USD 221.85 billion in 2020. The market is projected to grow from USD 242.39 billion in 2021 to USD 647.47 billion by 2028, exhibiting a CAGR of 15.1% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market had exhibited a higher growth of 7.6% in 2020 as compared to 2019.
Increasing government initiatives and subsidies have enabled cold chain solution providers to tap the developing markets such as India, Japan, and Canada, with innovative solutions to overcome difficult refrigerated transportation. Cold chain services are designed to offer perfect storage conditions and transportation for temperature-sensitive food products. Growing demand for perishable and processed food products and fast food delivery services has created growth opportunities in cold chain operations.
The growing need for temperature control to prevent food losses, the increasing penetration of connected devices and automation of refrigerated warehouses, and the increasing demand for perishable goods among consumers worldwide are expected to spur the industry growth over the forecast period. Further, many organized retail stores in developing economies are leading to increased demand for cold chain solutions.
Moreover, pharmaceutical industries are majorly concentrating on product sensitivity and quality. Upsurge in the development of vaccines, complex proteins, shipments of hormone treatments, and more complex biological-based medicines, that necessitate cold chain infrastructure. Pharmaceutical products need to be transported at a controlled temperature that can be achieved by cold chain solutions. In addition, the stringent regulations in the pharmaceutical sector regarding the maintenance of product quality have positively influenced the adoption of cold chain solutions.
COVID-19 Pandemic: Positively Impacted Cold Chain Industry
In 2020, the COVID-19 pandemic positively impacted the cold chain industry, resulting in it driving the demand for refrigerated transportation and refrigerated warehousing worldwide. Additionally, the coronavirus vaccine is just an addition to the already existing vaccines such as hepatitis and rabies. It has inflicted a positive effect on the cold chain industry as in the upcoming years it will create opportunities such as infrastructure upgrades such as fixed refrigerated warehousing, portable cold storage, and reefer trucks.
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Increasing Consumer Demand for Perishable Goods Drive Growth of Cold Chain Logistics Market
The increasing trend of buying perishable goods through the online platform has led to new opportunities and challenges. These include the requirement for automated warehouses to manage inventories, and innovative solutions to offer last-mile delivery. That also creates demand for advanced temperature monitoring devices to maintain quality and prolong the shelf life of perishable food products. Consumers are nowadays more conscious about wellness and health, and the effect that food nutrients, particularly protein, have on overall mental and physical development. This has caused a change in the consumption pattern of perishable goods, such as fruits and vegetables, dairy products, meat, eggs, fish, and seafood.
Increasing Number of Organized Retail Stores Worldwide
The development of retail chains and channels in the form of convenience stores, hypermarkets, and supermarkets is a foremost factor driving the market growth. Besides, trade liberalization, and government efforts to reduce food waste, and expansion of the organized retail sector in emerging economies are anticipated to boost the market growth in the coming years. Also, large food retail channels such as 7-Eleven, Spar, Tesco, and Walmart Inc. are expanding their food retail outlets in developed nations such as Germany, the United States, China, and the U.K., and in developing markets such as Argentina and Brazil. For instance, Walmart Inc. is the U.S.-based leading retail corporation with almost 10,526 stores and clubs under 48 banners in 24 countries and e-commerce websites. The development of such large wholesalers and organized retailers, and their expanding operations in global trade are generating growth opportunities for the refrigerated transportation and refrigerated warehousing market.
Environmental Concerns Regarding Greenhouse Gas Emissions Restrain Market Growth
Cold chain industry development places a substantial burden on the environment since refrigeration is a source of greenhouse gases and is energy-intensive. The snowballing number of refrigerated road transportation is extremely gaining massive demand across the world. Keeping products cold to prolong shelf life and maintain the quality of the products throughout the transportation phase of the cold chain (like trains, ships, and trucks) is important. Refrigerated transportation accounts for about 7% of total world hydrofluorocarbons (HFCs) consumption.
Likewise, diesel-powered reefer trucks, trailers, and containers consume around 21% more power than non-refrigerated diesel-powered trucks. This has noteworthy implications on climate change, as the development of cold chain infrastructure becomes almost ubiquitous in developing nations. Therefore, environmental concerns regarding greenhouse gas emissions are anticipated to hinder the cold chain logistics market growth.
Refrigerated Warehouse Held Largest Share of Market due to Increased Demand for Automated Warehouses to Manage Inventories
Based on type, the market is segmented into refrigerated warehouses and refrigerated transportation. The refrigerated warehouse segment holds the major share in the market and is expected to retain its dominance in the coming years due to the growing preference for packaged food products across the world. Changing the dietary patterns and lifestyles of consumers is propelling the demand for frozen food products. This is anticipated to boost the demand for refrigerated warehouses.
Furthermore, the refrigerated transportation segment is projected to grow at the fastest CAGR over the forecast period due to the increasing use of safe refrigerated transportation of temperature-sensitive goods and products. Transportation modes used are refrigerated cargo, refrigerated railcars, refrigerated trucks, and air cargo.
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Growth of Pharmaceuticals Segment Due to its Importance in Maintaining Efficacy and Safety of Pharmaceuticals
Based on the application, this market is segmented into fruits & vegetables, fish, meat, and seafood, dairy & frozen desserts, bakery & confectionery, processed food, pharmaceuticals, and others. The dairy & frozen desserts segment accounts for the major market share and is also projected to dominate the market over the forecast period. This is attributable to the increasing demand for animal protein products such as cheese, milk, and meat.
A cold chain is used for transporting frozen bakery products like bread and cakes, and frozen meat like fish, poultry, beef, seafood, and pork. Changing dietary habits of consumers and growing levels of disposable income are boosting the product demand from the bakery and confectionary segments.
North America Cold Chain Logistics Market Size, 2020 (USD Billion)
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Based on the geography, this market is segmented into Europe, Asia Pacific, North America, and the Rest of the World. The North American region will dominate the market in 2020. Growing penetration of connected devices and a large consumer base are anticipated to drive market growth from 2021 to 2028.
On the other hand, Asia Pacific is estimated to be the fastest-growing regional market from 2020 to 2028. This is due to increasing government investments for cold chain logistics infrastructure development. Countries such as South Korea, China, Japan, and India have a strong demand for meat, dairy, and processed food products, which in turn is anticipated to drive the market for the cold chain in the region. Moreover, factors like increased foreign direct investments in the healthcare sector, and the promotion of pharmaceutical industries are boosting the market growth for the pharmaceuticals sector in the Asia Pacific region.
In addition, developing economies in Latin America and the Middle East & Africa regions are witnessing an increased demand for perishable food items. This is due to the rising disposable income of consumers, changing tastes and preferences, and the rapid urbanization in these regions. The market potential for frozen and processed food items is also high in these regions, owing to their lower adoption rates. The consumption of ready-to-cook products, like snacks, frozen desserts, and pizzas is growing steadily in these regions.
Key Market Players Are Constantly Upgrading Their Technologies to Stay Ahead of Competition
This market is highly competitive and fragmented, with of key players such as the U.S. Cold Storage, AmeriCold Logistics LLC, LINEAGE LOGISTICS HOLDING, LLC, VersaCold Logistics Services, and NICHIREI LOGISTICS GROUP INC. (NICHIREI CORPORATION). These players are increasing their multi-compartment reefer vehicle fleets to offer added services to their end-users. Moreover, the key companies are upgrading their technologies to ensure safety, integrity, and efficiency.
An Infographic Representation of Cold Chain Logistics Market
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The global cold chain logistics market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market’s growth over recent years.
Value (USD Billion)
Fortune Business Insights says that the global market size was USD 221.85 billion in 2020 and is projected to reach USD 647.47 billion by 2028.
In 2020, the North America market revenue stood at USD 81.97 billion.
The market is projected to grow at a CAGR of 15.1% and will exhibit exponential growth in the forecast period (2021-2028).
The refrigerated warehouse segment is expected to be the leading segment in this market during the forecast period.
Increasing need for temperature control to prevent food losses, and the rising demand for perishable goods among consumers across the world to propel the market growth.
LINEAGE LOGISTICS HOLDING, LLC is the leading player in the global market.
North America dominated the market share in 2020.
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