One of the fastest-growing segments in India and the world is the Hotels, Restaurants, and Catering (HORECA) sector and its allied Cloud kitchens and quick service restaurants (QSR). The market for food services in India is predicted to increase from US$ 41.1 billion in 2022 to US$ 79.65 billion by 2028, with a CAGR of 11.19%, There are many reasons why this industry saw a major boom in the past couple of years and is set to continue the growth trajectory, thanks to factors like an increase in migration of working professionals and millennials, urbanization, and higher disposable income. Covid also had a major role to play in increasing demand for doorstep delivery, giving a major boost to cloud kitchens in India. Driven by rapid tech adoption and innovative service offerings, the sector is set to grow at approximately 15.5% to 17.5% CAGR during 2024-2028 and may achieve a market value of USD 2.5 billion by 2028.
However, even as the sector continues to boom, especially with penetration in Tier II, and III markets, it is marred with several challenges, including access to efficient cold storage and temperature-controlled transportation. The cold supply chain is significant for not just storage of raw materials, transportation, and last-mile delivery but also vital in maintaining quality and creating positive customer experience and loyalty. From the stage of the procurement of raw materials to the last-mile delivery needs, the cold supply chain for HORECA needs to be urgently upgraded so as to ensure end-to-end efficiency.
Here are some of the severe challenges faced by the sector and how tech-driven solutions by reliable Cold Supply Chain service providers, can help solve them:
- Chaotic Infrastructure:
Unorganized last mile delivery infrastructure faces a lot of challenges due to a variety of factors, like lack of temperature-controlled transport and infrastructure for both procuring raw produce as well as delivery of finished, lack of reefer vehicles for shorter distances or smaller volumes, inconsistency in the maintenance of optimum temperature while in transit and imperfect handling by under-trained delivery agents. These lead to restaurants and cloud kitchens resorting to the usage of ice boxes for delivering temperature-sensitive finished products such as desserts, bakery items, dairy products, etc. which considerably compromises the quality of the product and hamper customer experience.
A cold chain partner with a fleet of reefer vehicles that are equipped with AI, ML, IoT devices, and blockchain-based smart contracts, enables minimum damage during last-mile deliveries and can also help in ensuring end-to-end transparency, consistent temperature monitoring, and route optimization.
- Lacking Cold Storages:
Effective storage for food materials, including agricultural produce and other raw materials used by the HORECA sector in bulk, is vital to ensure a good quality finished product. However, traditional storage solutions comprise large spaces that may or may not be effectively monitored in terms of temperature and may not be fit for storage of multiple products that need to be handled differently. Generally, Cold storage provides solutions for 1000+ tons of consignments but they hardly have the facility to store 5 or 50 tons of materials which are usually required by quick service restaurants, perishable food companies, or could kitchens.
An effective Cold Supply Chain partner with AI and ML integrated warehousing can ensure various materials are stored as per their optimum temperature needs. The storage facility can also monitor inventory through a tech-enabled warehouse management system that offers end-to-end visibility and facilitates predictive analysis for every cold chain function.
- Traditional Tracing Techniques:
Old-school monitoring mechanisms and manual inspections, coupled with ineffective tracing solutions, can lead to slip-ups and human errors, resulting in substandard food quality. Being a perishable of high value, food supply chains need to be closely monitored, with every movement being tracked, recorded, and communicated to ensure that the quality, and integrity of the product are intact.
A tech-enabled cold supply chain partner can help deploy blockchain and IoT to provide real-time tracking and tracing solutions so as to be able to identify and address any inefficiencies, as soon as they are spotted. They can also help with more efficient route planning, a major hassle for cloud kitchens when scheduling hundreds of deliveries every day. This helps in not only maintaining quality but also ensure faster deliveries, lower operational costs, and steady revenues.
India’s HORECA (Hotel, Restaurant, and Catering) industry is experiencing a surge, with metro, tier 2, and tier 3 cities as well as towns embracing cloud kitchens. The combination of rising disposable incomes and widespread smartphone accessibility has fueled this trend. However, to sustain this boom successfully, the HORECA players must establish a robust cold supply chain infrastructure. Embracing a tech-driven cold chain becomes a crucial growth catalyst for the industry, allowing them to leverage the ongoing boom and achieve overall success.
Celcius Logistics: Revolutionizing India’s Cold Supply Chain with Tech-Driven Solutions
Celcius, a cold-chain marketplace startup, has emerged as a game-changer in this landscape. It stands out as the sole aggregator platform in India, offering state-of-the-art technology and operational solutions for Reefer logistics and cold storage warehousing. The inspiration behind Celcius can be traced back to the outbreak of the Covid-19 pandemic in India in 2020. The nationwide lockdown exposed significant deficiencies in the existing cold chain network. The lack of personnel and coordination between shippers and transporters resulted in chaos during the transportation of essential goods across the country.
Understanding the urgent need for contactless deliveries and anticipating the future distribution of the Covid-19 vaccine, the founders of Celcius came together to create India’s pioneering digital marketplace for the cold supply chain. Their simple yet innovative solution addresses the challenges posed by the pandemic and sets the stage for an efficient and seamless cold chain infrastructure to support essential services and industries like HORECA.
The traditional cold chain system faces numerous challenges due to a lack of visibility and coordination throughout the transit and storage process. However, Celcius has revolutionized this approach by integrating technology to ensure accountability from booking to delivery. Their web and app-based platform carefully verifies shippers and transporters before listing them, guaranteeing reliability and trustworthiness.
The key advantage of Celcius’ platform is its centralized booking system, where all data is collated in one place, streamlining operations and enhancing efficiency. During transit, customers can access real-time tracking of both the shipment’s thermal conditions and its location, providing complete peace of mind.
The payment process is equally seamless, allowing users to make payments in a single click through various options like cards, bank transfers, or UPI on the app. But Celcius doesn’t stop there; it offers additional features such as multi-temperature loading, multi-location pickup and drop facilities, as well as a user-friendly ratings system for transporters and shippers. Moreover, the platform includes an online bidding system that facilitates smooth negotiations.
By addressing the drawbacks of the conventional cold chain and providing these comprehensive features, Celcius has become a leading force in the tech-driven cold supply chain industry.
The brand has also tied up with finance institutions like Shriram Transport and Finance Company and with OEMs like Ashok Leyland and Tata.
As of March 2023, Celcius has transported over 100 thousand tonnes of perishable cargo for sectors like dairy, fresh agricultural produce, pharma, fruits, seafood and vaccines across 350 cities in India. In September 2022, Celcius launched its smart last mile delivery platform that addresses the most pertinent pain points in India’s fragile cold supply chain. The brand also partnered with vehicle owners and automotive manufacturers to create a robust on ground network of reefer vehicles, that is integrated with the smart platform which has been created with a unique Inventory Management System (IMS). Celcius has launched this platform in six metros and plans on expanding this to other tier-2 cites and towns in the next six months. The company has already secured contracts for storage and distribution from clients like Zepto, Maersk, Jubilant foodworks and others, and also handles distribution for Zomato, Innovative foods limited and a host of other Cloud kitchens and local businesses who get instant access to all the asset inventory via Celcius’s last mile delivery platform.
The startup has also ventured across the border to import fruits from Afghanistan and to export seafood outside India. Celcius’ clientele include Zepto, Zomato, Baskin Robbins, Maersk, Sumeru, Godrej Agrovet ,Gadre Marine, Reliance Pharma, Balmer & Laurie, Vadilal, Dominos and many others.
Since its inception, Celcius Logistics has grown to 4500+ vehicles, 107 cold storages, 7 Distribution centre’s and 100+ Hyperlocal riders. Their future plans include upgrading their platform with Warehouse Management Systems (WMS) and an enhanced version of their existing Transportation Management Systems(TMS), introducing an in-depth cold storage warehousing solution, securing a reach in over 500 cities in the future, and scaling their business in terms of team size and reach.
These efforts are all in line with the brand’s vision of building a truly unbroken cold supply chain network that leverages the best in innovative technology to drive efficiency and cost effectiveness, across sectors.