Cold Storage business strategy

Cold Storage business strategy

The food sector has traditionally been characterized by high complexity throughout the entire logistics chain due to the expiration of goods and the consequent control of the cold storage business strategy.

This can be defined as the process of optimizing the use of temperature in the production, transport, and marketing of perishable products, subject to this heat treatment, until their final consumption.

Competitiveness would happen in this case to take advantage of cold technologies and techniques in conjunction with the cold storage business strategy and the supply of logistics operators with controlled temperatures.

The situation presents now:

Millions of tons of perishable food products (meat, chicken, vegetables, dairy, precooked, etc.) are transported, stored, and distributed throughout the world every day.

At present, consumers have different options to buy fresh products without having to be subjected to a specific origin and logistics at a controlled temperature, respecting the cold storage business strategy, makes it possible.

Today around 50% of the food sold to the consumer has passed some stage of refrigeration, on the other hand, the hospital, pharmaceutical, and chemical sectors have also increased their flows of operations at controlled temperatures.

According to a study, the following critical factors can be determined in the cold storage business strategy:

  1. There are legal loopholes for the sale and marketing of refrigerated products.
  2. Supervision and surveillance by health authorities and suppliers at points of sale regarding the handling of said products is deficient.
  3. The refrigeration found in the manufacturing centers and the means of transport is moderately adequate, it depends a lot on the installed capacity and the type of company that does the production and marketing.
  4. There are technical and control deficiencies in more than 90% of the refrigeration equipment in the commercialization areas nationwide.
  5. There is insufficient installed capacity in refrigeration equipment at the points of sale, an aspect that is accentuated by the high turnover of the products.
  6. The handling of the products in the sales outlets is inadequate due to the high mix and overload of the diversity of products, breakage of packaging, loss of vacuum, ignorance, etc.
  7. As defined by the technical standard, heat treatment conditions the product so that its quality is acceptable, but it does not guarantee its sterilization.
  8. The personnel assigned to the handling and control of the cold are scarce and unsuitable.
  9. The loading and unloading of the products are inadequate due to the reduced spaces of the refrigeration chambers and the size of the doors.
  10. More than 90% of the rooms and refrigerators lack visible thermometers or these deteriorate.
  11. More than 40% of the sales outlets do not have sufficient refrigeration capacity.

Also, legislation establishes the following for processed products that require heat treatment:

The temperature of the cold room (cellar) destined for storage must be kept from 0C to 4C. And must have thermometers.

Frozen products should be stored at temperatures below -18 ° C.

We can consider ten key success factors to achieve a good cold storage business strategy:

Cold storage business plan PDF

  1. Storage:

A room at a controlled temperature or cellar differs substantially from a conventional warehouse by its very essence: the cost of a conventional cubic meter is lower than the cost of a cubic meter at a controlled temperature, with which the cost of storage becomes more expensive.

Although it always depends on the degree of cold that is required per product, the covering of the warehouse, the cold equipment, and the energy consumption are always relevant.

The use of space, layout design, or handling equipment should be chosen based on several factors. The function of the warehouse and the type of products that also determine the level of cold must be considered, an essential aspect to determine the use of space.

In the case of frozen products, since the cost of refrigeration is higher, the use of space is the most important factor, while the economy of handling is more secondary.

However, it should not be forgotten that it is essential to make the use of space compatible with accessibility to the product, which ensures a more agile order preparation and dispatch, and especially to keep rotation under the strictest FIFO, essential when it comes to products. with such short expiration dates.

This blog is also worth reading for you:– POTATO COLD STORAGE PROJECT COST

It is also recommended:

– Keep the cellars open for as little time as possible.

– When loading and/or unloading the products, they must go from the cellar to the vehicle and vice versa immediately.

  1. Transportation:

Refrigerated road transport has increased significantly; It is estimated that the number of vehicles with these characteristics exceeds 50,000. As with the rest of the transport, a very divided and atomized market is observed, which prevents economies of scale to renew fleets.

If the transport sector traditionally complains about the costs of tolls, fuel, insurance premiums, etc., the refrigerated business adds to all this the extra cost of cold equipment, the cost of isothermal vans, and control meters of temperature.

Furthermore, transport has traditionally been accused of being the main breaking point in the cold chain, but this idea is being banished. There are fewer and fewer people on a journey who disconnect the cold equipment to avoid noise or save fuel.

At the same time, urban or capillary distributions, which were sometimes carried out in non-isothermal vehicles, have become more and more professional. It has also been detected that the breaking points are not found in the cellars or trucks, but the transit operations of the merchandise.

  1. Information Technology:

Good software that helps all cold storage business strategy from order taking, through reception, storage, inventory, loading, and transportation to unloading at the point of sale, is essential in any optimal distribution process.

The programs required by cold logistics must be specially developed, since storage and distribution techniques, in general, are not always compatible with those that require special temperatures.

If you have complete software that helps the operation of refrigerators, operational success can likely be guaranteed, complemented by qualified and trained personnel.

Yogesh Dahiya

Yogesh Dahiya

The Managing Director of Natural Storage Solutions Pvt Ltd is known for his expertise in setting up cold storage, chilling plants and food processing units.

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