Enhancement in Cold Chain Will Drive Growth in the FMGC Sector: Dr K Rathnam
Dr K Rathnam talks about the advantages that can be attained from confronting the challenges faced by the cold storage industry.
When the entire world shut down because of pandemic in 2020, almost every industry and sector took heavy damage. The reported losses were in double digits for big companies as well as small retailers. Despite the economic downturn across markets, positive news came from the fast moving consumer goods (FMGC) sector.
Dr K Rathnam, CEO of Milky Mist, attributes this to increased consumption in rural and semi-urban regions during the lockdown period. He explains the industry’s progress has broken all barriers and continues on the right path. “The cold storage segment ranks in the top five sectors in India. Customers have already proven that there is going to be no shortfall of demand in near future.” According to estimates from NielsenIQ, the FMCG industry grew in value by 36.9% Y-o-Y in the period ending in June 2021.
However, the progress achieved could multiply to a further extent, if supply segment issues are tackled successfully, says The Milky Mist CEO. He advises to focus on the necessity to enhance the cold storage chain in India.
Dr K Rathnam says that consumer products which have to be transported speedily every day between dealers and sellers create a lot of stir. Therefore, the industry bogged down by inadequate cold-chain infrastructure, lack of training on handling perishable products and several transportation constraints, should lay due emphasis on these issues.
Dr K Rathnam offers suggestions and says, “It is imperative to invest in cooling-infused transport infrastructure because only it can ensure extension of the network between distributors and retailers.”
He adds, “Adoption of latest technology will help the sector in the long run. There is also a need for focusing on scientific developments including channelising investment in R&D to immensely eradicate the cold storage problem.
Notably, more than half of the total cold storage units are located in a handful of states like Bihar, Uttar Pradesh and West Bengal. There is a requirement for such units in other parts of the country as well. Places like Bengaluru, Chennai, Hyderabad and Pune are suitable prospects where new cold storage plants can be established.
In the previous decade, investment in the FMCG area grew with an expected FDI flow of Rs. 1.320 billion by the year 2020. Dr K Rathnam credits this development to the synergetic approach taken by different segments such as transportation, cold storage units, and retail chains.
Under his management, the dairy giant Milky Mist has worked on the initiative of the cold storage ecosystem. And at the 2019 Indian Cold Chain Summit, Dr K Rathnam, while representing Milky Mist specified how his firm tracks the movement and the temperature of their products through latest technology.
He added, “Our vehicles are installed with cooling devices so that the life cycle of our goods is extended. Even the outlets receive visi-coolers from us for proper storage of dairy items.”
The infusion of resources, capital and efforts into the cold chain network has started to show preliminary results. The market had already become worth Rs. 1,121 billion in 2018 and is growing at a decent pace, with a projected CAGR of 14.8 per cent during 2019–2024. Moreover, the FMCG sector will immensely benefit from improvement in the cold storage infrastructure, which will provide longer shelf life to perishable goods.
