Sustainability and innovation in cold chain: Understanding the sustainable revolution

Sustainable innovation is key for the present and future of the cold chain sector. Three factors are creating a favourable environment for and driving investments in innovative and sustainable solutions. Cold chain companies are exploiting this opportunity, responding effectively to the increasingly complex demands of the food supply chain.

 

BY MATTEO IAGATTI
Sustainable practices are at the core of any debate about food supply chains. Every subsector has its specific drivers for sustainability, and these drivers sum up a complex system of factors that range from shifting consumption patterns down to regulatory intervention.

To guide our analysis, Rabobank has isolated three factors that are driving the sustainable revolution in cold chain. They are changes in consumer preferences, shifts in cold chain ownership structure, and availability of innovative technological solutions.

These factors are synergic, and are creating an environment in which external pressures from food companies, retailers, and consumers are translated into increasing investments in sustainable innovations. In order to understand the present situation and to try to shed some light into the near future, it is important to get the essence of the impacts that these factors have on the cold chain sector, its practices, and its commitments towards sustainability.

Consumer preferences: Fresh, healthy, sustainable and convenient
The first push to innovate sustainably comes from the changing behaviour of consumers towards foods. Contemporary consumers ask food companies for a wider and healthier range of fresh food products. At the same time, they demand retailers provider convenient access to food in accordance with their busy lifestyles. Finally, yet importantly, they want to know everything about the origin and environmental footprint of what they eat.

Food companies have responded by increasing the range of fresh products on offer while also developing complex schemes for sustainable sourcing and packaging to adjust to growing consumer scrutiny. Retailers, on their side, have changed their business strategies by enlarging their offering of fresh products at convenience stores and developing various platforms that allow clients to do their grocery shopping online.

The cold chain sector got somewhat caught in the middle of this, and is now pushed to find innovative solutions to deliver food timely and sustainably while ensuring its quality and traceability. The choice that cold chain companies face is quite straightforward: either evolve by embracing innovation and sustainability, or see their market share and client base shrink simply because they could not provide the services that the market was asking for in a profitable way.


Matteo Iagatti is senior analyst – food and agri, supply chains, Rabobank.

The full article is featured in the latest Food & Beverage Asia Aug/Sep 2020 issue. To continue reading, click here.