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COOL INSIGHTS 16 JANUARY/FEBRUARY 2015 • FOOD LOGISTICS www.foodlogistics.com A nyone with their ear to the ground for the last six years knows that if there was a global recession, you couldn't tell it from global cold chain activity. The Global Cold Chain Alli- ance's recently-released Global Cold Storage Capacity Report by the International Asso- ciation of Refrigerated Warehouses (IARW) provides a lot of data that confirms the cold chain has been on a significant growth curve during the "Great Recession," and it is expected to continue despite economic stagnation in some parts of the globe. The total capacity of refrigerated warehouses was estimated at 552 million cubic meters world- wide in 2014, an increase of 92 million cubic meters (20 percent) over 2012. For companies looking to learn about growth opportunities in the global cold chain, this report provides an excellent analysis of cold storage capacity worldwide. The IARW has been collecting and analyz- ing data on the global cold storage industry since 1998. This report provides industry growth trends, market development indica- tors, and market comparisons. Companies planning for growth are oftentimes confused by the large amount of information avail- able from government sources, associations, private marketing firms and consultants. The IARW's report offers a good starting point, as it highlights key considerations such as the number of existing cold warehouses in differ- ent countries, the growth of warehouse space, population densities, population incomes and quality of transportation systems. A business planning tool Whether you are a retailer, foodservice operator, wholesaler, 3PL, material handling equipment provider, supply chain software vendor, distribution systems integrator or a consultant, this report includes useful market insights and quantitative data to assist in business planning. A food processor looking to expand but uncertain what geographic markets offer the best opportunities will find it helpful to know how much cold storage capacity exists in the 31 countries studied, the amount of cold warehouse space compared to urban population, how much cold storage capacity has increased in the last four years, the level of personal, disposable income, and how fast the population's income is changing. Approximately 17 million cubic meters of additional refrigerated warehouse capacity has been added to the GCCA database from countries that are covered by the 2014 survey for the first time: Egypt, Iran, Kuwait, Libya, El Salvador, Afghanistan, Dominican Repub- lic and Oman. One theme that emerges from 42 pages of analysis and charts is that substantial export opportunities exist for cold chain service and storage providers. Noting that roads, bridges and ports must be accessible for cold chain service providers to expand, the report references the transportation quality index published by the World Economic Forum (WEF). A 1-percent increase in a country's score in the WEF transportation index will deliver a 6- to 8-percent gain in capacity of refrigerated warehousing. Through its Human Capital Report, the WEF provides a long-term insight into how well countries are utilizing their human capital and maintaining work- forces that are prepared for the competitive economic environment. For example, Swit- zerland's score of 6.51 indicates a better qual- ity of domestic transport than other coun- tries, albeit closely trailed by Finland, Japan, Spain and United Arab Emirates. Countries leading refrigerated capac- ity growth since 2008 are Turkey, India, Peru, and China. These countries have each expanded refrigerated warehousing by 35 per- cent or more annually over the last six years. India, China, and Turkey have the highest long-term growth rates. Capacity in 13 countries grew faster than 10 percent annually since 2008. India surpasses the U.S. India has surpassed the U.S. as the country having the greatest amount of refrigerated warehouse space. The revenue of India's cold storage businesses is approximately $8 billion and revenue is growing at a pace of 25 per- cent per year. Household income is cited as the main driver for market penetration of refrigerated warehousing worldwide. The report presents a comparison of warehouse capacity and growth in consumers' incomes. The increase in household purchasing power is accompa- nied by changes in preferences favoring large- scale shopping formats such as supermarkets and hypermarkets. Because the report sheds light on the relationship between reliable transportation systems and market growth opportunities, readers will gain a stronger understanding of the need for the cold chain industry to par- ticipate in public policy initiatives. Hopefully, readers will recognize the need to support trade association lobbying and research. Any company participating in the global cold chain faces challenges in such a fast changing industry. The GCCA/IARW report can help a company plan its growth strategy. The report is free to GCCA members. For information, visit www.gcca.org or call 703-373-4300. ◆ B Y E L L I O T M A R A S Analyzing The Rise In Global Cold Storage Capacity COMPOUND ANNUAL GROWTH RATE IN REFRIGERATED WAREHOUSE CAPACITY, in % by Country, Annualized for 2008—2014. Source: International Association of Refrigerated Warehouses. Austria Netherlands Canada Italy Ireland Greece Belgium Denmark United States Sweden Portugal Germany France Poland Brazil Mexico Namibia Chile Great Britain China Peru India Turkey 4.18 4.51 4.69 4.71 4.84 5.41 5.80 8.73 9.29 9.82 10.80 11.23 11.64 19.70 26.25 26.51 27.41 30.05 31.21 34.67 36.50 42.99 68.11