Future investment in transport refrigeration

There seems little doubt that investment in transport refrigeration will accelerate, not only because of the issues of demographics, food wastage and hunger discussed above, but because it is already starting to happen. Many of India's biggest conglomerates are starting to invest in cold chain including Reliance, Ranger Farms, Bharti, ITC, Food World and Spencer, as are some of the world's biggest fast food brands. McDonalds has tripled its Indian outlets to 300 over the last six years, for which it has built a bespoke cold chain to 35 suppliers across the country.51 Yu m Brands (which owns Pizza Hut, KFC and Taco Bell) also intends to triple its outlets in India to 1,000 by 201552, which will need the same kind of support, and Burger King opened its frst restaurant in 2014. These companies have brands to protect and cannot afford not to develop and maintain reliable cold chains. More broadly the Indian fast food (or 'quick service') market – estimated at $2.5 billion in 2013 – is expected to grow to $8 billion by 202053; its grocery market to be worth $566 billion by 201554; and its chilled pharmaceutical market is growing at 15% per year.55

There are also signs that developing economies may leapfrog to the latest business models emerging in the developed economies, such as home delivery and click and collect, which depend even more heavily on transport refrigeration. Sales of fresh produce on Taobao, a Chinese eBay-style platform, almost tripled in 2013; Amazon has invested $20 million in Yummy77, a Shanghai-based fresh food e-store; and Walmart has raised its stake in Yihadodian, an online grocery, which had sales of almost $2 billion in 2013.56 Alibaba, which owns Taobao and several other e-commerce platforms, had estimated sales of 400 billion yuan ($64 billion) in 2010.57 The company raised $25 billion on the US stock market in September 2014 to become the largest ever IPO.58 Roland Berger Strategy Consultancy forecasts the Chinese cold chain logistics business will grow at 25% per year until 2017, when it will be worth 470 billion yuan or $75 billion.59

51 http://www.vccircle.com/news/retail/2013/08/27/mcdonald%E2%80%99s-india-grew-over-threefold-last-5-yrs- cross-200m-sales-peek-its-two

52 http://www.wikinvest.com/stock/Yum!_Brands_(YUM)

53 A growing taste for US fast food in India, CNBC, January 2014 http://www.cnbc.com/id/101321608#

54 Analysis: What UK grocers can learn from the Asian convenience market, RetailWeek, June 2013 http://www.retail-week.com/analysis-what-uk-grocers-can-learn-from-the-asian-convenience-market/5050422. article

55 Gearing up for the next level of growth, India Pharma Inc., pwc, 2012 http://www.pwc.in/en_IN/in/assets/pdfs/pharma/pharma-summit-report-31-10-12.pdf

56 Cold chain opportunity assessments, University of Nottingham, 2014, http://naturalleader.com/wp-content/themes/natlead/images/CRC3656-ColdChainOpp.pdf

57 From Stall to Mall, News China, January 2012, http://www.newschinamag.com/magazine/from-stall-to-mall

58 Alibaba Claims Title For Largest Global IPO Ever With Extra Share Sales, Forbes, 22 September 2014, http://www.forbes.com/sites/ryanmac/2014/09/22/alibaba-claims-title-for-largest-global-ipo-ever-with-extra-share-sales/

59 China Market Research Report, Roland Berger Strategy Consultants, May 2014, http://www.think-act.com/blog/2014/e-commerce-to-heat-up-chinese-cold-chain-logistics/