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Cold chain: what it is, its importance and trends in the food industry

Emergentcold
December 21, 2023

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As we navigate a constantly evolving scenario in the logistics and storage of refrigerated food in Latin America, 2024 brings a series of trends and transformations for the cold chain.

In the content, we’ll go through the basics – explaining how an efficient logistics chain works and how to maintain it – and delve into some crucial changes that are shaping our industry.

This ranges from the integration of sophisticated solutions in important markets such as Brazil and Mexico, to the adoption of automation and concern for sustainability.

We are on the brink of a revolution, not only adapting to change, but also actively shaping the future of logistics and refrigerated food storage in Latin America.

Such steps with a lot of innovation, efficiency and a deep commitment to social and environmental responsibility.

Enjoy your reading!

What is the cold chain?

Cold chain refers to the robust set of specialized logistics processes aimed at preserving the quality and safety of temperature-sensitive products throughout the supply chain.

This covers everything from production to the end consumer, including storage, handling and transportation of products.

How important is the cold chain in the food industry?

Rigorous control is essential to maintain effectiveness, safety and regulatory compliance, providing companies with a competitive edge and a commitment to operational excellence and product quality.

How does the cold chain logistics work?

Cold chain logistics involves rigorous temperature management and control in the transportation and storage of products that are sensitive to thermal variation. Made up of refrigerated equipment and specialized procedures, it guarantees food quality and safety.

From production to the point of sale or use, refrigerated containers, trucks and warehouses ensure the ideal environment, while real-time monitoring technology helps to maintain the right conditions.

All logistics are very important for preserving products and reducing the risk of loss.

cold chain explanation

How to ensure an efficient cold chain.

In order to ensure an efficient cold chain, continuous and specific attention to each stage of the process is essential.

This involves the adoption of rigorous practices, the use of temperature monitoring technology (-18°C or less for frozen products) and proactive management of the risks involved. The focus is on mitigating any thermal variation that could affect the quality and preservation of the products.

Operational excellence in this chain is achieved by harmonizing procedures and specialized training for the teams involved in each phase of the logistics cycle.

Loading and unloading

In the loading and unloading process, it is essential to keep products within the appropriate temperature range at all times, avoiding exposure to the environment that could alter it.

An air-conditioned loading and unloading environment or the act of transporting products quickly to and from controlled environments is ideal. In addition, the temperature of transport vehicles must be checked before loading and after unloading to ensure the continuity of the cold chain.

Storage

Temperature uniformity throughout the storage area is essential. Systems such as cold rooms and high-precision refrigerators must be kept fully operational, with periodic performance checks.

It is recommended to use ventilated shelves and not to block the cold air vents, as well as to keep a detailed temperature record for each batch stored.

Transportation

During transportation, vehicles must have effective thermal insulation and refrigeration systems suited to the type of product being transported. The use of real-time monitoring devices and data loggers is essential to ensure that deviations are promptly identified and corrected.

Regular vehicle maintenance, including checking the insulation and performance of the cooling system, guarantees reliability during the journey.

Distribution and sales

During the distribution and sales stage, it must be ensured that the final points of sale are prepared to maintain the cold chain until the product reaches the consumer. This includes appropriate refrigerators, cooled shelves at the point of sale and maintaining the integrity of the packaging until delivery.

Training employees to deal with handling and storage procedures is essential if the cold chain is to be maintained uninterrupted until final consumption.

Cold chain trends in 2024

We have already established the essential fundamentals that govern the cold chain, but it is crucial to address the emerging trends that will shape the future of this industry from 2024 onwards.

Sustainability: an integral approach

The urgency of reducing gases that attack the ozone layer is also increasing.

Companies are increasingly being driven, sometimes by customer demand, to replace older refrigeration systems with greener options such as CO2 and ammonia.

In addition, there is the demand to reduce water consumption, an initiative we are focusing on at Emergent Cold Latam.

All of our efforts to conserve this resource reflect our commitment to sustainability. In some of our buildings, we are investing in an advanced refrigeration system that does not use water in the condensers and at the same time, is energy efficient.

Circularity is also being transformed from a concept into concrete practice. The cold chain logistics sector involves improving the reuse of materials, such as pallets, and increasing efforts to recycle cardboard boxes.

At Emergent Cold LatAm, we are going further by offering services in line with our customers’ sustainability goals, such as the collection of used cooking oil from restaurants.

As the challenges of social inequality grow around the world, the importance of reducing food waste becomes even more evident.

By improving the management of resources and reducing waste, we are addressing environmental concerns and contributing to the fight against social inequality. This comprehensive approach to sustainability is the future of our industry, combining practical actions with a commitment to social responsibility.

sustainability

Use of Artificial Intelligence (AI)

Embracing AI in supply chain management is a game changer, not merely a passing trend. It is revolutionizing how we handle operations, bringing levels of quality and consistency that were previously unattainable.

Artificial Intelligence provides essential predictive insights to optimize warehouse operations, especially in cold storage.

In cold storage, the role of AI in warehouse management is essential. It’s not just about keeping things organized, it’s about smarter forecasting and better stock control.

control de stock con IA para la cadena de frio

This technology helps us to understand and adapt to changing product profiles, ensuring that we get the most out of our warehouse space. This isn’t just about stacking boxes, it‘s about dynamic space optimization.

The impact of AI on productivity and precision is profound. We know that inaccuracies can lead to downtime, creating backlogs that nobody wants. AI helps us stay on course by reducing these costly errors.

There is also the issue of security, a top priority in any warehousing operation.

Artificial Intelligence helps optimize facility layouts, creating more storage space and safer handling areas. This isn’t just about efficiency, it’s about ensuring the well-being of our employees and the safe handling of products.

Another important point is that this technology plays a crucial role in reducing direct and indirect labor costs.

Intelligent storage systems monitor performance indicators, providing data that can lead to process improvements. This is about adjusting our operations to achieve maximum efficiency.

Other benefits of AI in our industry include predictive maintenance, which helps us predict and avoid equipment failures, and improved safety measures. All these factors come together to create a smarter, more efficient and safer cold storage operation.

AI is not only a tool, it is the future of how we manage our supply chain and we are fully committed to making the most of its potential.

Integration: demand for comprehensive solutions

Looking to the future, there is a clear need for better connected cold storage solutions. This goes beyond a trend – it’s a major game changer, especially in our region.

Customers aren’t just looking for warehousing, they want the full package, including transportation services and many value-added services that a 3PL (third-party logistics operator) partner can potentially offer.

What’s more, customers want lots of data. They need to make intelligent decisions about their stocks.

That’s why integrating Electronic Data Interchange (EDI) with their Enterprise Resource Planning (ERP) systems and our Warehouse Management System (WMS) and Transportation Management System (TMS) is crucial. It’s about giving them the power to control their stock with confidence.

At Emergent Cold LatAm, we’re living this. We are making our IT systems uniform across the board. This means that our customers have total visibility through a dedicated portal.

emergent cold latam dedicated portal to cold chain

Facilities close to the food industry

The search for facilities close to the food industry is really shaking up the sector in Latin America. We’re watching this become reality, especially in Mexico and a few Central American countries.

What does this mean for us?

There is a growing demand for comprehensive cold storage solutions. This is crucial not only for expanding local markets, but also as a key component in export strategies.

As food production plants move to these regions, the dynamics are changing. It’s not just about storing products, it’s about providing a complete set of services that meet the complexities of these new markets.

The impact is especially significant in border areas such as the USA and Mexico. There, the demand for integrated solutions is increasing rapidly. We’re talking about the need for perfect coordination between warehousing, transportation and logistics services.

It’s about creating an efficient flow of goods across borders, meeting the growing demands of domestic and international markets. This change is a great opportunity for us to show what we can do in terms of offering high-quality integrated cold chain solutions.

Automation to meet urban demands

Urbanization is pushing us towards a more strategic approach to automation. In densely populated areas, sophisticated order picking and storage systems become essential. They’re not just a fancy addition, they’re crucial for optimizing space and functionality in these urban centers.

In certain locations where the cost of land is considerably high, the smart move is to invest in automated warehouses. Take our recent investment in Chile as an example.

We set up a warehouse with 10,000 pallet positions using forklifts, and now we’re adding another 25,000 pallet positions. This isn’t just growth, it’s strategic expansion.

E-commerce also plays an important role here. Customers are switching to direct-to-consumer sales. Having warehouses close to urban centers is not only convenient, it’s essential for efficient distribution.

In short, the urban landscape of 2024 is dictating a new direction for cold storage facilities.

We are responding with automated solutions and strategically building warehouses in locations where we can meet the demands of a rapidly evolving market, driven in part by a more complex supply chain.

This is the future of urban cold storage – automated, efficient and closer to the consumer than ever before.

Search for reliable partners

Companies are becoming more discerning in their partnerships, especially when it comes to cold storage. They are looking for suppliers who offer more than just space, prioritizing those who adhere to high standards such as HACCP.

This trend is aimed at ensuring cost control, regulatory compliance and environmental responsibility. In response, we are investing in new facilities and modernizing existing ones to meet these high expectations.

In addition, there is a growing trend, especially in Latin America, to outsource warehousing needs. This shift, which was already prevalent in the U.S. some 30 years ago, is now gaining ground in Latin America.

Companies are realizing the benefits of comprehensive cold chain solutions that come with high service standards. By outsourcing, they are taking advantage of specialized knowledge, advanced facilities and a full range of services that go beyond simple storage.

This shift towards outsourcing reflects a maturing market in Latin America. Customers are increasingly aware of the value of partnering with specialists who offer a complete package – covering everything from storage and handling, to transportation and logistics.

It’s not just about transferring responsibilities; it’s about engaging with partners who can improve overall efficiency, ensure compliance and support environmental commitments.

Moreover, changing market dynamics, including an increase in product variety, a consumer shift to fresh rather than canned goods, accessibility to advanced IT solutions, and the declining cost of automation, are reshaping the cold storage landscape.

We are adapting to these changes, not just by storing products, but by offering dynamic and responsive cold chain solutions.

This is the new era of cold storage in Latin America – one in which companies are looking for partnerships that offer responsive, responsible and comprehensive cold chain management, going beyond traditional storage to cover a wide range of high-quality services.

Speculative investments in urban centers

There has been a notable increase in speculative investments in the cold storage industry, which is crucial for food logistics and is predominantly located in large urban centers.

However, it is important to note that this sector is generally not ideal for speculative investments due to the high costs and specific market demands for temperature-controlled perishable food logistics.

Building a cold storage facility can cost approximately three times as much as building a dry warehouse.

This significant cost difference stems from the need for advanced insulation, especially in the floor, specialized refrigeration systems and complex layouts to maintain different temperature zones, all crucial to preserving the quality and safety of perishable products.

Although these urban centers are attractive due to their high demand and dense population, potential investors should proceed with caution.

The high initial investment and the need for specialized knowledge in handling perishable products under controlled temperatures make this market challenging for those seeking safer and more predictable returns.

Given the substantial upfront costs, the cold storage market requires a thorough understanding of its unique operational challenges and a long-term commitment.

Cold chain logistics: discover our solutions

What do you think of these trends? They make it clear that we are witnessing a period of significant transformation and growth.

The main trends we point out not only highlight the constantly evolving landscape of our industry, but also emphasize our commitment to innovation, efficiency and environmental responsibility.

The transformations we can expect for cold storage in the coming months and years reflect a dynamic and evolving industry.

At Emergent Cold LatAm, we remain at the forefront of these changes, adapting our strategies and operations to meet these new challenges and opportunities.

Our commitment to providing high-quality cold storage solutions is unwavering as we continue to navigate and shape the future of cold storage and logistics in Latin America.

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