The overall cold chain market has increased from revenues of USD ~ million in 2011 to USD ~ million in 2017 at a CAGR of ~% during this period.
Progressive measures taken by the government have resulted in augmentation of production and consumption in many sectors which are highly dependent upon the cold chain industry. The major products handled by the cold chain industry in Turkey are bakery, confectionary & dairy products followed by meat and sea food. Transportation and storage of pharmaceutical and agricultural products also contribute a major share to the revenue of the cold chain industry.
Increase in industrial activities has resulted in tremendous expansion of the catering sector. The number of fast-food restaurants and pastry shops has increased dramatically during the last decade. This trend can especially be seen in highly populated cities such as Istanbul, Ankara and Izmir. All these economical and cultural changes have positively affected the cold chain industry of the country.
One of the primary factors for the growth of the cold chain industry in Turkey has been the growth of the food retail sector in the country. Food retail covers around ~% of all Turkish retail sales, and it is growing at a steady rate of ~% year-on-year. Proliferation of modern retail outlets and supermarkets all over the country and their specialized demand is gradually transforming the industry as well.
Some of the major players in the market are now gradually implementing modern cold chain systems in storage facilities and transportation fleets instead of using the conventional technology.
Which is More Dominant – Cold Storage or Cold Transport?
During 2017, cold transport dominated the overall cold chain market in terms of market revenue. However, the overall share of cold transport in the cold chain market has decreased from ~ % in 2011 to ~ % in 2017.
In recent years, there has been a shift in the country’s retail sector; from local market called “bakkals” to a more western influenced retail model. A number of supermarket chains have come up in the country. As of 2016, there were around ~ supermarket chains, operating more than ~ outlets throughout the country.
These supermarket outlets highly depend on cold transport for their supply of confectionary items, dairy products, meat, sea food and a number of other temperature sensitive products.
With the growth in number of these outlets, the cold transport sector has also witnessed growth in its revenues. The cold transport market in terms of revenue has increased from USD ~ million in 2011 to USD ~ million in 2017.
Although frozen food is gaining popularity in the country the consumption of fresh food still dominates. In Turkey, it is imperative that stock in the supermarkets and other retail stores is delivered in top condition regularly for customers. The products are not stored for long duration of time in cold storage warehouses. This is one of the main reasons that the cold transport contributed higher revenue to the market in comparison to cold storage.
Share of cold storage in the revenues of cold chain market has increased from ~% in 2011 to ~% in 2017 with the increase in number of cold storage warehouses from around ~ in 2011 to around ~ in 2017.
The consumption habit of Turkish population has changed over the past decade. This has been majorly in the urban areas of the country where people have less time to cook at home and they prefer consuming ready to eat food products or eat outside.
The overall revenue of the cold storage market has increased from USD ~ million in 2011 to USD ~ million in 2017. There has been significant growth in consumption of chocolates and other confectionary products. In 2017, the revenue for confectionary products market in Turkey was USD ~ million. The change in consumption habits along with the increasing population has led to increase in demand for cold storage space in the country.
What have Been the Major trends And Developments In Turkey Cold Chain Market?
Changing Consumer Habits and Growing Demand for Frozen Food
Societal changes, rapid urbanization, changing consumer habits, and others are some of the several reasons that derive the demand for frozen food in Turkey. Traditionally, fresh produce was used for preparing food, but due to the rapid urbanization and convenience, there has been a shift in the preference of Turkish consumer towards frozen food. There is also demand for foreign foods and imported or luxury brands by the consumer class with higher income levels. The frozen food market in Turkey has been estimated around USD ~ million in 2017 which is expected to reach USD ~ million BY 2022, while the ice-cream and frozen desserts industry in Turkey in 2017 was around USD ~ million and is expected to reach USD ~ million by 2022.
Gradual Growth of Value Added Services Providers
The cold chain market in Turkey is witnessing a gradual increase in the number of value added service providers because of a heightened demand in the local and international market. This has led to cold chain companies in realizing the benefits of providing end-to-end services to its customers. Companies like Polar Express have already started providing a range of value added services to its customers and has plan to expand its spectrum of services. The industry is gradually following the footsteps and introducing these essential services.
Increasing Popularity of Internet of Things in the Cold Chain Industry
The Internet of Things is the global network of physical objects, including devices, buildings and vehicles, all linked to the internet. As such, the IoT has numerous practical applications for the cold chain sector. The Internet of Things (IoT) is set to revolutionize the cold transport industry across the globe including Turkey. In cold chain, information is key to an efficient and profitable business. Combined with other technological innovations, such as cloud computing, GPS and radio frequency identification (RFID) chips, real time identity, location and other cargo information, can be tracked securely anywhere in the world.
Emergence of E- Commerce
The companies have started forming strategic alliances with e-commerce, especially with companies dealing in delivering of fresh food, fish, sea food and meat products. The development and integration of e-commerce with cold chain has provided greater level of opportunity to the new players to enter into the market. The E-Commerce market for 2017 in Turkey is estimated to be USD ~ million. Hence, the rise in competition in the ecommerce segment has instilled organizations to provide fresh delivery options to their customers in order to gain a competitive edge in the market. This has in turn generated the requirement of cold chain logistics services.
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