LONDON--(BUSINESS WIRE)--According to their latest report, Technavio analysts expect the global perishable goods transportation market for 2016-2020 to exceed USD 14 billion by 2020, growing at a CAGR of almost 7%.
According to Sharan Raj, lead research analyst at Technavio for transportation and distribution research, “Some of the key factors contributing to the growth of the global perishable goods transportation market are the increase in the demand for frozen foods, growth of the organized retail sector, rise in international trade, and increased concern about food wastage.”
Technavio’s lead transportation and logistics market research analysts have identified the following three factors that will drive the global perishable goods transportation market:
- Increasing initiative for reducing food wastage
- Increasing demand for frozen perishable foods
- Growth in the organized retail sector
Increasing initiative for reducing food wastage
Approximately one-third of all food produced is wasted every year. Approximately 20% of fruits and vegetables are wasted at the production level. In 2014, the global volume of food wastage reached 1.6 billion tones, of which 1.3 billion tones was edible. Food waste adds up to USD 680 billion in developed countries and USD 310 billion in developing countries. Perishable food products are often exposed to fluctuating temperatures during transit and handling, which increases the food wastage.
The demand for food products will increase as the global population increases at a rapid pace. In 2012, 800 million people suffered from malnutrition or starvation. Therefore, with an increase in the global population and food wastage, the need for effective refrigerated transport systems is likely to increase substantially in the future.
Increasing demand for frozen perishable foods
The increased need for convenience foods and processed foods is propelling the demand for frozen food worldwide. Consumers are also increasingly seeking out frozen foods that have health benefits. The global frozen foods market is expected to exceed USD 276 billion by 2018, growing at a CAGR of over 3%. Frozen foods require an effective cold storage system so that the chemical composition of the food items remains intact even after several months.
Refrigerated road transport service providers are focusing on improving their supply chain efficiency and improving the technology used in cold storage facilities to deliver high-quality foods. Therefore, technological developments and increased demand for frozen foods are contributing to the high demand for refrigerated transport systems.
Growth in the organized retail sector
In organized retailing, a licensed retailer sells many goods belonging to different categories. The stores are organized and use improved storage technology, including better refrigeration, compared to traditional or unorganized retail stores. The multiple organized retail formats include supermarkets, hypermarkets, forecourt retailers, discounters, and convenience stores.
An increasing number of consumers are purchasing grocery items, including frozen and chilled foods, from organized retail stores. Emerging markets, such as those in India and China, are seeing a steady increase in the number of modern retail stores.
With the growth of the organized retail sector and increased demand for frozen and chilled foods, the demand for refrigerated transport services has increased, and it will increase further during the forecast period. “Therefore, the growth of the organized retail sector has propelled the growth of the global perishable goods transportation market,” says Sharan.
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