With around 28 years of professional experience in the industry, Dr K Rathnam explicates the challenges and the opportunities of FMCG sector’s supply chain, with special focus on Cold Storage Chain.
With around 28 years of professional experience in the industry, Dr, K Rathnam explicates the challenges and the opportunities of FMCG sector’s supply chain, with special focus on Cold Storage Chain.
The FMCG (fast moving consumer goods) sector is one of the few sectors to witness growth despite the economic slowdown brought by lockdowns and restrictions during 2020-21. Dr. K Rathnam, CEO of Milky Mist, explains, “NielsenIQ reported that the value of FMCG industry has increased by 36.9% Y-o-Y in the period ending in June 2021. The growth is largely driven by increase in consumption in rural areas.”
Evidently, the demand side of FMCG has displayed its rigidity in expansion of the segment prospects. On the supply side, there is huge untapped potential that can be mined to amplify the sector, which is already the fourth largest in Indian economy. Dr. Rathnam specifies, “ASSOCHAM (Associated Chambers of Commerce and Industry of India) reported that our cold chain market reached an astounding Rs. 1,121 billion in 2018, with a projected CAGR of 14.8% during 2019-2024”.
Despite these positive indicators, India’s FMCG sector is mired by an underdeveloped infrastructure in cold chain, lack of awareness regarding handling of perishable goods and various bottlenecks in the transportation segment – which together leads to inferior quality and quantity of goods.
Well versed with technological and distribution operations of the industry over the course of almost 3 decades, Dr. K Rathnam underscores the need of amplifying India’s cold storage chain. Serving in the capacity of CEO, he currently oversees the operations of Milky Mist which manufactures 100% value added dairy products in India.
Consumer goods have large volumes of supplies that are required to be rapidly moved across distributors and vendors on a daily basis. This necessitates a reliable logistics chain in which the perishable produces retain their inherent properties and do not get spoiled.
“As of today, about 60% of cold storage units are located in West Bengal, Uttar Pradesh and Bihar. There is immense potential as well as need to develop more facilities in cities like Pune, Bengaluru, Lucknow, Chennai, Hyderabad, Cochin and North East region where there is huge potential. Beyond cold storage, stakeholders ought to enhance cold chain supply, especially with last-mile connectivity.”
He continues, “Aggressive focus is requiredin deploying latest technology, funding R&D for scientific innovations, expanding the links of distributors with suppliers and retailers through cooling technology-infused transport infrastructure”.
Investment in the FMCG sector has seen growth during the last decade, as the FDI flow was estimated to be at Rs. 1,320 billion till September 2020. This has been driven by a synergetic approach adopted by various sectors such as logistics, cold storage units, retail chains, and most importantly, producers of perishable goods like fruits, dairy products, and vegetables.
Dr. K Rathnam, who represented Milky Mist at the Indian Cold Chain Summit in 2019, talked about ‘turning the cold chain ecosystem hot with the plinth of India’s modern retail’. He states, “At Milky Mist, we have incorporated Reefer trucks and refrigerated vehicles so that the lifecycle of our goods is prolonged by the cold chain management.”
Taking charge in cold chain, Milky Mist is India’s only dairy company which provides Visi-coolers to various outlets and it monitors the logistics movement with latest GPS technology for faster and efficient service. “It is through a dedicated investment and integration into cold chain infrastructure that the FMCG industry as whole can grow exponentially over the next few years”, he expresses.
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