Cold Storage Industry in India
Cold Storage Operations Academic Group23 20th Jan 2010
Industry boundary
Vertical scope: The below diagram depicts the key activities performed in a cold chain. Of these, packaging, precooling and cold storage are typically provided by the same player. These activities are together referred to as cold storage operations, and form the ‘vertical scope’ of our industry analysis.
Horizontal scope: Cold chain logistics are used for a variety of products such as pharmaceuticals, dairy products, farm produce, fish, flowers etc. However, we will be looking at cold storage operations specifically for fruits and vegetables commonly referred as ‘farm to table’.
Business modal: Cold storage operators for fruits and vegetables can function as both traders as well as service providers. In their capacity as traders, they purchase the products directly from the farmers, package them, store them and then sell them to large retailers. However we are limiting our scope to cold storage operations as service providers, where the cold storage operators are engaged by either the producers or (most commonly) buyers (mainly) organized retailers to render packaging, pre-cooling and storage services.
Geographic carrier: We will be looking at this industry at the pan-India level
Barriers to entry
Economies of scales: It is a largely untapped, fragmented & full of unorganized small size players. No player has achieved economies of scale and thus a new a new entrant with deep pockets can enter this industry and still be at a major cost advantage.
Capital Requirement & Technology: The cold chain logistics is a highly capital-intensive industry (cost of real estate and refrigeration equipments) with a large-size cold chain has a payback period of as high as five years.
Incumbency advantages independent of size: Existing players like Snowman have built expertise by operating in this industry for longer periods in time & use imported hi-tech equipment, which new entrants would find
Industry boundary
Vertical scope: The below diagram depicts the key activities performed in a cold chain. Of these, packaging, precooling and cold storage are typically provided by the same player. These activities are together referred to as cold storage operations, and form the ‘vertical scope’ of our industry analysis.
Horizontal scope: Cold chain logistics are used for a variety of products such as pharmaceuticals, dairy products, farm produce, fish, flowers etc. However, we will be looking at cold storage operations specifically for fruits and vegetables commonly referred as ‘farm to table’.
Business modal: Cold storage operators for fruits and vegetables can function as both traders as well as service providers. In their capacity as traders, they purchase the products directly from the farmers, package them, store them and then sell them to large retailers. However we are limiting our scope to cold storage operations as service providers, where the cold storage operators are engaged by either the producers or (most commonly) buyers (mainly) organized retailers to render packaging, pre-cooling and storage services.
Geographic carrier: We will be looking at this industry at the pan-India level
Barriers to entry
Economies of scales: It is a largely untapped, fragmented & full of unorganized small size players. No player has achieved economies of scale and thus a new a new entrant with deep pockets can enter this industry and still be at a major cost advantage.
Capital Requirement & Technology: The cold chain logistics is a highly capital-intensive industry (cost of real estate and refrigeration equipments) with a large-size cold chain has a payback period of as high as five years.
Incumbency advantages independent of size: Existing players like Snowman have built expertise by operating in this industry for longer periods in time & use imported hi-tech equipment, which new entrants would find