A paradigm shift brought about by pandemic makes a sea change in the sector as you change the way you live and work
In response to the Covid-19 pandemic, businesses have been forced to reconsider their policies and business models, and industry experts have extended their hand to support the same. With several vaccines on the horizon, there is reason to believe that the world will beat the Covid-19 pandemic in the next few years.
The pandemic has caused global sales of commercial refrigeration equipment to plummet, falling to 11 per cent in 2020 and still further in early 2021. Due to restrained customer spending, restricted mobility disrupted equipment supply chains, and it has led to decreased fixed investments, wreaking havoc on foodservice operators. As the pandemic recedes, demand and sale is expected to improve.
At present, globally as well as in India, companies are endeavoring to take control over this challenging phase in a balanced and agile manner while focusing on the prudent management of working capital, operation costs and ramping up of revenue. Post-Covid, companies have been witnessing an uptick in demand for commercial refrigeration products and solutions from multiple segments, including Pharmaceutical, Healthcare, Fast Food Chains, Quick Service Restaurants clients and the like. Offering good opportunities for the commercial refrigeration industry is now the new normal.
Changing lifestyles, rapid urbanisation and consumer demand for frozen and chilled products have grown, resulting in the increasing demand for commercial refrigeration. Furthermore, rapid development in the organized retail industry, such as the expansion of hypermarkets and supermarkets, has boosted total sales of commercial refrigerators. However, the market’s major restraint is the need for proper and regular maintenance.
Refrigeration systems are increasingly being used in grocery stores, supermarkets, convenience stores, specialty food stores and restaurants to preserve food quality and reduce the danger of bacterial growth, thus steering the growth of commercial refrigeration equipment in India. The sector is divided into full-service restaurants and hotels, the food manufacturing industry, hospitals, retail pharmacies, supermarkets/hypermarkets, grocery stores, quick-service restaurants, and others based on the end consumer. Catering facilities, institutional catering, function services, bakery, and bars & pubs are included in the other sub-segments.
With the pandemic affecting the economy of the country, businesses are trying to string along with the after-effects. The commercial refrigeration companies began to undergo major changes that also influenced other related industries of the market, hitting an all-time low demand for hotels, restaurants, cafes, bars, and so many more. The ice cream and milk products sector as well as its allied industries lost their business because of the decline in demand which led to the shutting down of factories as products were expiring and impacting the cash flow severely. Today, some of the other industries like beverages and bars are still struggling to make a comeback. Similarly, restaurants are still relying on the delivery mode rather than dine-in. After a year, even today, cinema theatres haven’t recovered.
India has a strong demand for commercial refrigeration, but the country is still in the early stages of growth. It is important to provide sufficient back-end cold chain linkages from farm to fork. Cold chain penetration in India is suboptimal, necessitating considerable efforts. It is a huge requirement by businesses to manage and transform during these unprecedented times.
Today, the commercial refrigeration industry is going through a time of unprecedented innovation, the market is evolving due to regulatory pressures, changing customer preferences, and rising demands for more effective and sustainable technologies. Along with these, advanced technologies such as artificial intelligence integration, the trend of automation, and a rise in the number of fast service restaurants are showing a positive impact on the industry.
Business owners and supermarket operators have a wide range of environmental-friendly, operationally safe, and, perhaps most importantly, regulatory-compliant options to choose from. Also, the growing food and beverage industry in India is expected to boost sales in the commercial refrigerator sector shortly. The rapid rise in fast-food consumption among consumers, which includes items such as nuggets, French fries, breaded fingers and cutlets necessitates the use of commercial refrigerators to maintain freshness and is expected to drive significant demand for commercial refrigerators in the near future. Furthermore, increasing urbanization combined with increased western culture influence appears to emphasize massive baked food consumption, which is accelerating commercial refrigerator deployment and will proliferate the prominent growth of the Indian commercial refrigerator market in the coming years.
Innovation and development are important aspects of keeping the business afloat. One of the most valuable lessons that the pandemic has taught is to stay one step ahead and never to depend on the past; instead, work on cash flows and constantly innovate.
The author is Director, Elanpro
DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.