Bottom up and top down forecasting
If there is good reason to believe the numbers and spending power of the new middles classes will surge over the next two decades, the big question is whether these factors are fully reflected in industry forecasts of demand for cold chain – the channel through which much of the new middle class consumption will be delivered. Conventional 'bottom up' forecasts are typically produced by extrapolating current population and income growth trends, but such linear forecasts may not capture the sudden and structural shifts discussed above. Conventional forecasts do generally predict much higher annual growth rates for cold chains in developing countries than in developed – 22% for India in the five years to 2017, for instance, against 13% for the world as a whole69 – but even these higher rates may not fully reflect the scale of investment required. The Asian middle class is projected to grow six-fold by 2030; levels of cold chain coverage and service in developing economies today are far below those found in the developed; and those are in any case a moving target – the European Commission forecasts European cooling demand will rise 72% by 2030.