Cold Chain Top Countries Report

2016 Top Markets Report
Cold Supply Chain
A Market Assessment Tool for U.S. Exporters
May 2016
U.S. Department of Commerce | International Trade Administration | Industry & Analysis (I&A)
Industry & Analysis (I&A) staff of industry, trade and economic analysts
devise and implement international trade, investment, and export
promotion strategies that strengthen the global competitiveness of U.S.
industries. These initiatives unlock export, and investment opportunities
for U.S. businesses by combining in-depth quantitative and qualitative
analysis with ITAs industry relationships.
For more information, visit

www.trade.gov/industry
I&A is part of the International Trade Administration, whose mission is to

create prosperity by strengthening the competitiveness of U.S. industry,
promoting trade and investment, and ensuring fair trade and compliance
with trade laws and agreements.
John Miller, I&As Industry Specialist for Cold Chain and Distribution Services,
served as the lead author for this report. Thank you to all cold chain industry
representatives who have provided insight including: ITAs Strategic Partners of
The Global Cold Chain Alliance, APICS, FedEx, UPS, and the International Air
Transport Association.
Table of Contents
Executive Summary ...............................................................................................................................3
Overview and Key Findings ................................................................................................................5
Country Case Studies

Australia .................................................................................................................................................. 19
Brazil ......................................................................................................................................................... 21
China ......................................................................................................................................................... 25
India .......................................................................................................................................................... 29
Indonesia................................................................................................................................................. 33
Japan ......................................................................................................................................................... 37
Kenya ........................................................................................................................................................ 41
Malaysia ................................................................................................................................................... 45
Mexico ...................................................................................................................................................... 49
Singapore ................................................................................................................................................ 53
Vietnam.................................................................................................................................................... 57
Addendum: Resources for U.S. Exporters ................................................................................... 61
Appendices
Appendix 1: Methodology ....................................................................................................... 63
Appendix 2: Scorecards ........................................................................................................... 65
Appendix 3: Citations............................................................................................................... 68
2016 ITA Cold Chain Top Markets Report | 1

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Executive Summary
The 2016 Cold Chain Top Markets Report is being launched during a time of increased interest in international
trade. The completion of negotiations in the Trans Pacific Partnership, and hopes for its quick ratification, has
sparked expectations of improved opportunities to expand trade within partner countries.
The report also comes at a time when an increasing understanding of the global value chains that are the key
drivers for the flow of trade in both goods and services is impacting the way that industries and government view
trade in terms of investment and policy development. As a business function of distribution services, cold chain
services are force multipliers that create a world of opportunities for related trade and exports of goods. A cold
chain can most readily be defined as a series of warehousing and distribution activities that is designed to ensure
ideal storage and transportation conditions for temperature-sensitive products. Cold chain services also have the
added benefit of improving quality of life for billions of people around the world and are in high demand,
especially in less developed economies that suffer from malnutrition, high rates of food spoilage and chronic
disease.
This years report uses World Economic Forum research as well as industry insight to assess 20 international
markets for cold chain expansion. The case studies section of the report covers 11 countries that collectively
represent more than $450 billion out of more than $1.8 trillion in total sales by U.S. majority owned foreign
affiliates in distribution services. The countries also represent more than $800 billion in total U.S. goods and
services exports. The expansion of foreign affiliates and their corresponding sales contributes to U.S. companies
bottom lines and does not detract from U.S. jobs but rather increases the need for U.S. workforce to support
business operations here in the United States.
Ultimately, the report finds that cold chains grow in support of distribution services operation, primarily in the
retail and franchise sectors. In developing markets, cold chains provide opportunities for small and medium-sized
farmers and businesses to enter the supply chains of international markets, exporting their temperature-sensitive
products to retailers around the world. In consumer markets, cold chains provide access to products previously
unavailable locally, raising the quality of life through fresher, safer food, pharmaceuticals and biologics while
increasing opportunities for retail and franchise sales growth.
The biggest barriers to cold chain growth remain government protectionist measures and non-tariff barriers, often
in related distribution services industries. The difficulties and delays of clearing customs or transporting products
across borders is also a major impediment for services.
Through policy development, commercial dialogues, participation in trade negotiations and managing Industry
Advisory Committees, including the Advisory Committee on Supply Chain Competitiveness, the International Trade
Administration (ITA) has been focused on reducing these barriers to trade and will continue to work with countries
around the world to provide opportunities for distribution service providers to compete on a level playing field.


Overview and Key Findings
Introduction established for decades. The development of cold chain
systems, especially in terms of government policy,
The development of cold chain systems is a force however, is a fairly new concept. Cold chain systems
multiplier that can generate exports and open new can most aptly be viewed as a business function in a
markets over multiple sectors over an extended period, global value chain rather than as an industry. As a
rather than a one-off export transaction that can be business function, they encompass activities and
quantified simply as an export success. U.S. businesses processes that span several industries and support the
understand the need for viable and efficient cold chain exports and sales of numerous other industries. The
systems; they spend hundreds of millions of dollars United States has a competitive advantage in cold chain
each year to build and maintain both cold storage and systems derived from some of the most advanced
transportation systems, which allow U.S. businesses to technologies and logistics management services in the
flourish. Export promotion and trade policy agencies world.
should focus on the development of international cold
chains through improved regulatory environments, Key Findings: Top Markets and Methdology
increased skill level of workforce and encouragement
of infrastructure investment, thereby promoting the This report assesses the global market for U.S.
benefits of U.S. services. manufacturers and service providers in refrigerated
supply chains (cold chain). The focus is primarily for
Cold chain systems are crucial to the growth of global U.S. government (USG) decision makers to develop
trade in perishable products and to the worldwide sound policy as well as to assist U.S. companies
availability of food and health supplies. Each year, searching for market opportunities.
billions of tons of fresh food products and millions of
dollars worth of U.S. exports are lost due to poor cold The report details the basis for understanding the
chain systems in developing markets. The World market and developing industry and export promotion
Economic Forum lists food crises as fourth on its top strategies. It is driven by developments in supply chain
1
global risks of highest concern for the next 10 years. technology and its many linkages to other industry
Globally, billions of dollars are spent on improving sectors and potential exports of services and
agricultural processes to create higher food yields, but manufactured goods for the cold chain area itself and
the fact that nearly half of all food never makes it to a for other sectors dependent on the systems.
2
consumers plate is largely ignored.
The report assesses market opportunities in 20
Global losses in the food industry total more than $750 countries, drawing from well-known World Economic
3
billion annually. These losses primarily result from lack Forum/World Bank rankings, business criteria for
of proper facilities, improper food safety handling selecting locations for investment and private sector
procedures and insufficient training for those estimates of business potential. The methodology
personnel working in the cold chain. Additionally, over section sets out regional assessments of the markets for
$260 billion of annual biopharma sales are dependent these indicators and then examines individual markets
on cold chain logistics to ensure the efficacy of their in more depth. Case studies were developed for 11
4
products. countries chosen based on interest expressed by
government or private sector representatives to the
The concept and technology for controlling the ITA's Supply Chain Team.
temperature of sensitive products has been well-
Figure 1: Projected Cold Chain Export Markets (Bold indicates case studies included in report)
1. Singapore 5. Japan 9. Australia 13. Mexico 17. Vietnam

2. United Arab Emirates 6. Germany 10. China 14. Thailand 18. Colombia
3. United Kingdom 7. Canada 11. Poland 15. India 19. Kenya
4. Netherlands 8. Malaysia 12. South Africa 16. Indonesia 20. Brazil

Ultimately, the report finds that there are significant Finally, the demand within a country must be
opportunities for growth of U.S. cold chain services in considered. The potential size of the market will
key markets. These opportunities may not be quick or depend on consumer needs, the number of consumers
easy to achieve, but they represent a potentially strong in the country, products produced and demanded by
long-term payoff for U.S. business. the market, as well as the level of development within
the market.
U.S. businesses engaged in international cold chain
activity assess markets against specific criteria when When determining which global markets policy-makers
selecting locations for expansion. The four primary should target for export promotion and trade policy
criteria, according to industry sources, include the activities, it is important to account for the primary
governmental regulatory environment, whether there decision-making criteria of U.S. businesses engaged in
is a trainable skilled labor force, the infrastructure the cold chain market. In this report and the case
environment and the potential demand within the studies that follow, the criteria for evaluating markets
country or region. was based on the four specific aspects of
Government/Regulations, Labor Force, Infrastructure
Government/Regulatory and Demand. These are reflected in the reports
scorecard and country case studies.
The first aspect that U.S. industries consider when
looking at a new market is the regulatory environment The scorecard for this report is derived from the Global
of the country. In particular, U.S. industry looks for a Competitiveness Index 2015-2016 created by the World
stable government with transparent policymaking plus Economic Forum for their Global Competitiveness
6
technical regulations, standards and procedures for Report. By using this competitiveness index, a cross-
assessment of conformity that are non-discriminatory country analysis based on these market evaluation
and based on relevant internationally recognized best criteria is possible. Particular aspects of the index were
practices. Legal frameworks that allow companies to used to represent the primary criteria that industry
resolve legal disputes and challenge regulations are indicated as a priority in market selection.
essential when identifying potential export markets.
The scorecard assigns a numeric value to each of the
Labor Force criteria on a scale of 1 to 7, with 7 being the highest
score in a particular category. The scorecard is color-
Another important aspect for market decision-making coded using red, yellow and green to indicate
is the quality and skill level of the potential work force comparative values of countries in the same income
in the market. Industry must have the capacity to train level. It is important to note that the colors yellow and
and develop the talent and the management required red do not necessarily represent a poor environment
to run an efficient supply chain operation. but rather represent the lower 40 percent of scores in
the given income level.
Infrastructure
New for 2016, a separate category has been added to
The infrastructure within a country is another key assess industrys interest in each of the countries. The
aspect in a companys selection of export markets. Global Cold China Alliance, which represents all major
Electricity and IT infrastructure must be sufficient to industries engaged in temperature controlled logistics,
support logistics operations. Transportation provided ratings on a scale of 1 to 7, with 7 being the
infrastructure must be capable of supporting the highest score based on their members expressed
reliable distribution of a product within the country or interest. This industry interest category effectively
region without excessive delays. The International contributes 20 percent of the total country score.
Association of Refrigerated Warehouses has noted a
strong correlation of cold storage capacity to a The case studies in this report analyze selected
countrys transportation score in the World Economic potential markets and assess important
5
Forums Transport Index. competitiveness factors. These case studies are
intended to aid ITA in promoting the development of
Demand efficient international cold chains to improve U.S.
export opportunities. Inclusion of countries in the case

study section does not necessarily indicate that these rate (CAGR) of cold chain markets is anticipated to
9
are higher ranked countries of opportunity but rather reach nearly 16 percent into 2019.
that government or private sector representatives have
expressed interest in learning more about these The United States is a world leader in developing the
markets to ITAs Supply Chain Team. technology and processes necessary to develop and
manage cold chain systems efficiently; therefore, the
Industry Overview and Competitiveness U.S. is well positioned to capture a large share of the
global market for cold chain development. According to
The series of warehousing and distribution activities the Global Cold Chain Alliance, an industry association
that comprise a cold chain system are designed to comprised of the many industries that make up cold
ensure ideal storage and transportation conditions for chain services, global refrigerated warehouse capacity
temperature-sensitive products. Dozens of U.S. export increased by 20 percent from 2012 to 2014, and three
industries depend on the vital links that cold chain of the top five refrigerated warehouse operators by
10
systems provide. U.S. businesses invest hundreds of total volume are U.S. companies.
millions of dollars in their cold chain operations to
create efficiency and reliability because an end-to-end Operators providing value-adding activities, such as
cold chain is only as efficient and secure as the weakest harvesting and food processing, pass off their products
link in the system. Each link in the cold chain must to cold chain service providers for storage,
maintain the same level of integrity for the customer to transportation and delivery. While the majority of cold
receive a satisfactory product. A single breakdown in chain services are utilized in the fresh food market, cold
the chain can result in catastrophic losses of product. chain operators typically transport and distribute both
processed and fresh foods, especially in the U.S.
Figure 2: Refrigerated CAGR Fresh foods, like fruits, vegetables, meat, poultry and
Warehouse Capacity 2008-2014 dairy, require an uninterrupted cold chain due to their
Growth by Country (Percent)
perishable nature. By controlling parameters of
India 43
temperature, humidity and atmospheric composition,
China 35
Mexico 27
along with utilizing proper handling procedures, cold
Brazil 26 chain service providers can increase the product life of
United States 9 fresh foods for days, weeks or even months. These
Global Cold Chain Alliance services allow fresh products to hold their value longer,
increasing their transportability and providing
opportunities that expand their market reach.
Cold chain services that support perishable food
distribution globally are estimated to be valued at Cold chain systems for processed foods have a slightly
7
nearly $250 billion. Experts also estimate that cold different flow. The activities involved in processing are
chain logistics spending in support of biopharma usually transformative in nature and involve adding
industry is more than $10 billion and is expected to ingredients or preservatives or altering the natural
grow to $13 billion by 2019. Asia alone contributes to characteristics of the food product. These alterations
8
$1.2 billion in growth. The compound annual growth can extend the life of the resulting product by months

or even years. In some cases, processing may delink the The Global Cold Chain Alliance (GCCA), through its core
product from the cold chain system if the resulting partner, the World Food Logistics Organization (WFLO),
product is no longer susceptible to temperature shifts. maintains information and research on the safe
harvesting, storage, handling and transporting of
The nature of processing also allows the use of lower different commodities and temperature-sensitive
grade food products that are not suitable quality for products. ITA has a strong partnership with GCCA to
the fresh food market. Thus, processing can be help expand and grow cold chain systems around the
considered as an option to maximize food harvesting world based on international best practices.
and to optimize the utilization of available cold chains
and various grades of harvested food. Each cold chain varies by region, location and
temperature requirements; however, ensuring a cold
The exact structure of each cold chain varies chain for agricultural products begins at the farm.
significantly depending on product and customer Produce often goes through precooling at the harvest
requirements; however, the goal of a properly designed location and is then loaded onto a truck or other
cold chain system is to safely move temperature- transportation unit designed to keep the produce
sensitive products in a way that reduces waste, protected from the sun and held within a desirable
maintains the quality and integrity of the product and temperature range, as it travels to a processor facility
limits opportunities for bacterial contamination. A or a temperature controlled warehouse. In less-
complete cold chain system may include post-harvest developed locations, transportation may be carried out
pre-cooling or freezing, processing, temperature on covered trucks or smaller carts; in more developed
controlled warehouse or storage, retail or distribution locations, these transportation solutions can include
and refrigerated transport between locations. insulated reefer trucks.
Requirements for cold chain facilities vary based on the Depending on the type of product and its ultimate
size, type and amount of product, along with the destination, a product may proceed to one of several
particular requirements of the customer. Fruits and types of facilities. A cool dry storage facility protects
vegetables often require cool facilities and are stored the product and keeps it from high temperature
around 55F. Most dairy products require temperatures fluctuations and humidity. A cold storage facility may
just above freezing around 35F. Meat and poultry be appropriate for products that require a lower
products are typically stored just below freezing at temperature to remain fresh. This reduces the chance
approximately 28F. Ice cream and other frozen for bacterial introduction. A super cold facility is
products may require deep freezing at temperatures designed for products that may need to be kept frozen.
that can range from -10F to -150F. Sometimes these temperatures may be 100 or more
Figure 4:

Figure 5:
below zero. At each of these facilities, the product is Sample Storage Temperatures
kept at the ideal temperature until it is loaded onto an
appropriate vehicle and shipped to a distribution
center or its final destination, such as a retailer or Processed Foods (pickled,
restaurant.
>650 F dried, cooked)
Cooking oils
Onions
At the retailer or restaurant, a product must be stored
at the appropriate temperature in a refrigerator or
freezer, as it awaits its final user, typically a home use
customer or restaurant customer. Sub Tropical Fruits and
Cold chain systems are critical to the operations of U.S.

500-650 F Seeds
Chocolate
franchisors and retail service providers. Modern retail
sales have been growing at a rate of 10 to 15 percent
globally and have reached 50 percent of market share
Fresh Fruits and Vegetables
320-500 F
11
in most large emerging markets. U.S. franchise brands
Milk and Dairy Products
for food concepts are known for quality and safety
Flowers and Eggs
around the world. In order to maintain their
reputations, franchisors must have reliable and safe
means to transport products to their retail operations.
Meat, Fish and Poultry
Cold chain services typically have a deep vertical co-
ordination with the retail and franchise customers that
<00 F Frozen Fruits and
Vegetables
Ice Cream
receive their services, allowing those customers to
ensure the quality and the safety upon which they have
built their reputations. The level of co-ordination often prepared food delivery. In the U.S. and China, there are
extends beyond just how products are stored and a growing number of delivery services that offer fast
transported, to the local farmers, and allows for control food and dining beyond the traditional pizza delivery
12
of how food is grown and harvested. experience. A third party, rather than a vertically
integrated part of a retail franchise, often provides
In some less-developed economies that lack cold chain these services to the restaurant operator or directly to
services, retailers and franchisors have had to invest the consumer, much like a 3PL would offer delivery and
large sums of money in developing their own cold chain transportation for products.
logistics systems. While companies like Wal-Mart,
McDonalds and YUM! have the necessary capital to Grocery delivery, including fresh and frozen foods, is a
establish cold chain systems for their operations, the rapidly growing service that is being utilized around the
lack of cold chain development more broadly in many world. In the U.K., as much as 27 percent of shoppers
countries represents a significant limitation for many utilize e-commerce for their monthly grocery shopping
U.S. companies. This is especially true for small and and have their food delivered directly to their home.
medium size enterprises (SMEs) attempting to expand This industry is expected to reach $23 billion by 2020.
into international markets. U.S. web retailer and supply chain specialist, Amazon,
recently struck a deal with a major U.K. grocer to
14
Transportation costs are often the most challenging expand same day delivery of groceries in the country.
13
obstacles to suppliers in developing countries. In The complexities of warehousing and delivering fresh
countries with well-developed cold chains, most retail products directly to consumers are beyond the
and franchise service providers outsource their supply specialty of most retailers, and these services are
chain operations to third party logistics providers (3PLs) mostly contracted to cold chain service providers.
and to other cold chain service providers that meet
their requirements based on their products and Among Asian economies and developing markets, e-
business strategies. commerce is having an outsized impact on the delivery
of retail products, including fresh and prepared foods.
A recent global trend in cold chain is the rise of E- ITA anticipates that many of these economies will skip
commerce for fresh food and grocery sales, as well as cycles of normal development, bypassing the standard

transition from wet market to brick and mortar provided by U.S. companies physically operating in
supermarkets and organized retail. Instead, many large another country are often recorded not as exports but
metropolitan markets will see the largest growth in as U.S. owned foreign affiliate sales.
direct to consumer e-commerce and m-commerce
(commerce conducted through mobile devices) sales of According to BEA, services exports in 2013 totaled $662
temperature-sensitive products. Thus, a rapidly billion. Distribution services accounted for $46.6 billion
advancing model of distribution that will more heavily of these exports, with logistics services functions
utilize cold chain services is expected. Smaller cold (including cold chain services) representing 51 percent
storage facilities located closer to urban environments or $23.9 billion.
are likely to grow quickly.
By contrast, services supplied by U.S. owned foreign
While food and beverage products are the most affiliates amount to more than $1.3 trillion, and
commonly associated commodities that utilize cold distribution services accounted for $399 billion in 2012,
chains, they are not the only ones. Many the latest numbers on record. These foreign affiliates in
pharmaceuticals, vaccines, bioengineered drugs and distribution services had total sales of over $1.8 trillion
15
biologics that are derived from living cells must remain in 2013.
within a limited range of temperatures to maintain
their viability. To meet these requirements, U.S. In the realm of services, there is growing evidence that
express delivery service providers, such as FedEx and the focus of exports as a primary indicator of economic
UPS along with foreign companies such as DHL, have activity is outdated. As more businesses operate on a
made huge investments to develop complete logistics global level and reallocate their resources on the
systems throughout the world. These systems maintain specific business functions in which they have a
the integrity of the vaccines and other healthcare comparative advantage, distribution, logistics and cold
products that they transport for various manufacturers chain services will continue to facilitate an ever-
and healthcare providers. Their cold chain systems growing international market of innovation, efficiency
include warehouses, specialized aviation and ground and competition. From 2008 to 2012, sales by logistics
transportation equipment, advanced software services affiliates rose on average 21 percent,
management systems and extensive personnel training. suggesting that cold chain and logistics service
providers are responding to an international demand
16
Developing cold chain systems provides export for value-added services.
opportunities across the services and manufacturing
spectrum. Cold chain-related design and engineering, Global Industry Landscape
maintenance, logistics and software, and IT
development amount to billions of dollars of U.S. In the United States, cold chain systems are well-
services exports each year. Likewise, manufactured developed through many years of investment and
products, such as industrial racking systems, forklifts, provide high quality of life benefits to U.S. consumers.
trucks and commercial HVAC systems contribute to In fact, in 2008, the World Health Organization
billions of direct U.S. goods exports. Global expansion attributed refrigeration as a major factor in the
of cold chain systems also helps U.S. agricultural reduction of stomach cancer by nearly 90 percent in
17
producers expand their market opportunities overseas. the United States since 1930.
The markets opened through efficient internationally Cold chains in the United States are designed to meet
developed cold chain systems allow U.S. franchisors high demands from businesses, consumers and
and retailers to continue to expand the services trade regulators. Businesses require products that meet the
surplus that the United States has held for more than level of quality of their business structure; consumers
four decades. Services exports, however, can be demand the highest quality available based on the
notoriously difficult to quantify. The Bureau of price they are willing to pay; and regulators, such as the
Economic Analysis (BEA), the U.S. government entity U.S. Department of Agriculture (USDA) and U.S. Food
responsible for recording trade data, defines cross and Drug Administration (FDA), set requirements and
border trade as occurring when suppliers in one minimum safety standards for the handling of many
country provide goods or services to consumers in consumer foods and temperature-sensitive products.
another country, with people, information or money These market demands have resulted in a competitive
crossing national borders. Therefore, sales of services

U.S. industry, with standards that lead the world in biotechnology products that require cold chain has
terms of safety and integrity. risen drastically around the world. Nearly half of the
top 50 global drug products in 2013 required cold chain
U.S. cold chains have reshaped the consumer market services. These drug sales amounted to $104 billion,
over several decades. Product seasonality issues rarely and the overall cold chain biopharma industry is
20
exist in the United States today, as retailers are able to expected to grow to $350 billion by 2019.
source from countries with alternate climates. Global
trade in perishable products has continued to grow Cargo challenges in air transportation have led to some
year after year. pharmaceuticals shifting to sea modes in recent years.
The International Air Transport Association (IATA)
Flowers are an example of a product that utilizes and found that temperature excursions (a product
depends on cold chain storage. Cold storage permits temperature that has deviated beyond its acceptable
flowers of all varieties to be purchased year round, by range) are one of the primary reasons shippers are
sourcing them from South America and keeping them shifting away from air transportation. Further, the
fresh through the extensive U.S. cold chain. The United organization found that more than half of all
States imports more than 5 billion fresh cut flowers temperature excursions occur when packages are with
each year. Exports of temperature-sensitive products airline cargo handlers or in airports. As a result, IATA
from the U.S. to many of these same sourcing countries created a global pharmaceutical logistics certification
are still limited, however, due to inadequate program through their Center of Excellence of
distribution cold chains outside of the United States. Independent Validator (CEIV). The certification program
trains stakeholders on regulations and standards,
Figure 6: Fresh Cut Flowers Jan 1-Feb compliance and accountability, and audits for
Imports: 14 2014 adequately equipped facilities. The program allows
2014 Valentines Season (millions) stakeholders to easily search and identify cold chain
By Country of Export (cbp.gov) 21
service providers that meet certification standards.
Colombia 505.9
Ecuador 184.2
IATA has also been heavily engaged in the development
Mexico 43.1
Netherlands 21.3
of industry best practices and standards for perishable
Costa Rica 9.5 air cargo and has produced the Perishable Cargo
Kenya 8.3 Regulations manual to improve and standardize the
Thailand 7.6 practices among its 280 airline and air cargo handling
22
Guatemala 7.1 members.
Peru 1.7
India 1.7 Due to cold chain services multiple industrial
Customs and Border Protection components, including logistics, transportation,
distribution, and equipment and technology industries,
it is difficult to describe the industrial nature of the
Improving technologies in cold transportation has
global cold chain sector in general or structural terms.
created a shift in transporat modes; flowers are
Rather, using a global value chain view of cold chains as
increasingly being transported to the U.S. via ocean
a business function is a more effective way to view the
going vessels, rather than the traditional, more
various activities and businesses involved in the service.
expensive air transportation option. In fact, global
The following is a snapshot of the cold chain services
shipments of all perishable products by ocean carriers
18 warehousing, third-party logistics, express delivery,
has increased rapidly over the last 35 years. Reasons
industrial transportation equipment and personal
for the shift include greater availability of refrigerated
protective equipment activities.
containers, improved facilites at ports and better
technology options for monitoring shipments in
19 Warehousing
route.
Americold Logistics, based in Atlanta, GA, is by far the
Air transporation is still a heavily relied on mode of cold
largest firm in the cold storage and 3PL logistics sector.
transportation for many high value items, such as
The company operates 1.1 billion cubic ft. of
biologics and bioengineered drugs which can cost as
refrigerated storage, with more than 230 facilities, and
much as $100,000 or more. The amount of
has almost $2.5 billion in annual sales. Outside the

United States, the company has operations in allows businesses to focus on their core competencies
Argentina, Australia, China and New Zealand. while having 3PLs specialized systems handle most or
Americold supplies more than 3,000 customers, all of their logistics requirements. These services can
including Tysons, Heinz, Con-Agra and General Mills, often be customized for individual clients based on the
23
with more than 90,000 freight shipments each year. clients specific needs and can include air, rail, maritime
and truck freight; brokerage and customs services;
warehousing; and distribution and in-bound and out-
Figure 7: Cold Storage By Storage
Sales bound freight consolidation.
3 Revenue
Volume (mil. ft )
(millions)
Americold (U.S.) 992 $2,430
Shipments via 3PLs rose 7.2 percent in the second
Lineage Logistics (U.S.) 600 $206 quarter of 2014, according to the Transportation
24
Swire Group (U.K.) 335 N/A Intermediaries Association. The role of 3PLs to
Preferred Freezer (U.S) 258 $441 manage fulfillment in the cold chain sector is likely to
Nichirei Logistics (Japan) 152 $188 continue to grow for the foreseeable future due to the
Kloosterboer (NLD) 124 N/A increasing role of omnichannel retailing, especially in
VersaCold Logistics (Can) 119 $419 the fast growing ASEAN region.
Partner Logistics (U.S.) 101 N/A
Interstate Warehousing 83 N/A According to the Journal of Commerce, revenue from
(U.S.) the top 50 logistics companies was $248 billion in 2014,
AGRO Merchants (U.S.) 80 $76 25
an increase of almost 5 percent. C.H. Robinson
Nordic Logistics (U.S.) 70 $100
Worldwide led U.S. logistics companies with $11.9
Cloverleaf Cold Storage 65 $39
(U.S) billion of sales revenue. With few physical assets of its
Burris Logistics (U.S.) 72 $2,630 own, C.H. Robinson contracts with more than 66,000
Global Cold Chain Alliance and Hoovers.com carriers around the world to manage 14.3 million
26
shipments to more than 46,000 customers. C.H
Robinson buys, sells and transports food and
Other major refrigerated warehousing providers
agriculture products around the world.
include Lineage Logistics, Swire Cold Chain Logistics,
Preferred Freezer, Nichirei Logistics and Burris Logistics. Sales
Lineage, based in California, primarily operates in the Figure 8: Top 10 Global 3PL's
Revenue
U.S. with 600 million cubic feet of storage. Lineage had (millions)
earnings of $206.4 million in 2014. Swire Group is held DHL Logistics (GER) $37.5
by holding company John Swire & Sons and includes Kuehne + Nagel (SZ) $23.4
numerous cold chain service companies, including DB Schenker Logistics (GER) $19.0
Swire, Finlay and U.S. Cold Storage. The collective C.H. Robinson (US) $11.9
DSV (DEN) $8.7
companies operate in Australia, China, Sri Lanka, the
CEVA Logistics (NE) $7.9
United States and Vietnam; they have 335 million cubic
Panalpina (SZ) $7.3
ft. of storage. Preferred Freezer, based in New Jersey, Dachser (GER) $7.1
has 260 million cubic ft. of cold storage, mostly near Expeditors International (US) $6.6
freight hubs in the United States, China and Vietnam SNCF Geodis (FRA) $5.8
where it also provides cross docking and transshipping Journal of Commerce
services. Nichirei Logistics, with 152 million cu ft., is the
logistics subsidiary of Nichirei Corporation in Japan, a Express Delivery Services
food processor with nearly $5 billion in annual sales.
Burris Logistics, based in Delaware, has 15 facilities United Parcel Services (UPS) subsidiary, UPS Supply
with 72 million cubic feet and has estimated sales of Chain Solutions, is one of the top 3PL service providers,
$2.63 billion. though UPS primary focus is as an express delivery
service provider that transports more than 17 million
Third Party Logistics packages per day to over 220 countries. The company
operates more than 106,000 vehicles, over 600 aircraft
Third party logistics operators (3PLs) provide integrated 27
and exceeded $58 billion in sales in 2014. UPS has
warehousing and transportation services to businesses developed Temperature True, a packaging and
on an outsourced basis. The availability of 3PL services transportation system that provides services to more

than 500 healthcare companies. UPS has developed 49 Great Dane Trailers with a variety of dry bed, flatbed
facilities dedicated to the temperature-sensitive and refrigerated sales. Companies like Thermo King, a
healthcare industry with cryogenic freezing to -150F. division of Ingersoll Rand, provide temperature control
systems for trucks, trailers, rail cars and shipping
Figure 9: Express Delivery Sales containers. Thermo King has annual sales estimated at
Services Revenue $548 million.
Deutsche Post (Ger) $68.83B
UPS (U.S.) $58.23B
Cold chain spending in the biopharma industry on
FedEx (U.S.) $47.43B
insulated boxes, blankets, phase change materials,
LA POSTE (FRA) $14.56B
Hoovers.com temperature controlled shipping containers, sensors
and recorders, and other tertiary packing and
30
instrumentation is estimated at $3.1 billion.
Another major U.S. service provider is FedEx, which
delivers more than 3.5 million packages per day to Personal Protective Equipment
more than 220 countries. With more than 56,000
vehicles and over 650 aircraft, FedEx generated more There are also a number of SMEs in the U.S. cold chain
28
than $47 billion in sales in 2015. FedEx has also sector. For example, Georgia based Refrigiwear
rapidly developed logistics hubs throughout the world provides Personal Protective Equipment for workers
catering to temperature-sensitive transportation and operating in the cold environments of warehouses. The
uses a system called SenseAware that can monitor 55-year old company employs 142 workers and earns
product vitals of humidity, barometric pressure, $38 million in sales revenue from their 150,000 square
location, light exposure, at temperatures as low as - foot facility.
238F.
Challenges and Barriers
Within the United States, both companies have
established customs clearing processes and host U.S. While it can be challenging to operate a business in any
Customs and Border Protection (CBP) offices within international environment, one of the greatest
their facilities to allow international deliveries to challenges to cold chain expansion in a developing
proceed smoothly, without delays that could market is the lack of infrastructure necessary to sustain
potentially expose sensitive products to risk. cold chains. Transportation systems in many of these
economies can make reliably transporting refrigerated
Sales products in a timely manner difficult to near
Figure 10: Refrigerated
Transportation Manufacturers
Revenue impossible. In addition, lack of reliable power for cold
(millions) warehouses, power hookups for reefer trailers at ports
Wabash National $1,860 and transportation hubs, and adequate facilities at the
Utility Trailer Manufacturing $1,020 final customer locations add further costs and
J.B. Poindexter $708
complications.
Thermo King $548
Great Dane $466
Hoovers.com Over many years numerous aid agencies and
organizations, both government and private, have been
Industrial Transportation Equipment driven by the humanitarian benefits of cold chain to
address many of these infrastructure issues in markets
One of the largest U.S. manufacturers of reefers, or that suffer from massive food wastage and
refrigerated trailers, is Utility Trailer Manufacturing malnutrition, with varying degrees of success.
based in California. The family-owned company has Ultimately however, many of these groups fail to reach
more than 140 brands, and has estimated annual sales their goals of widespread cold chain development,
of over $1 billion and also builds specialized largely because they view cold chain as an industry of
29
refrigerated vans and delivery trucks. Other its own rather than a business function of a global
manufacturers of refrigerated trailers and commercial value chain. Thus, they fail to address the second and
trucks and vans include: Wabash National with a perhaps most pertinent challenge to the growth of cold
variety of manufactured products; J.B. Poindexter chain: finding ways to make a reasonable return on
which focuses on specialized trucks and vans; and investment.

Cold chain service providers operate as a business opportunities for small businesses and farmers where
function in the distribution services market and meet previously there were none. The highest quality
the needs of retailers and franchises. Due to the products from these small farms are mostly exported
enormous investment costs, cold chain operators need to other regions since consumers are often unable or
a significant amount of volume to become profitable unwilling to pay for the higher quality products locally,
within an ideal time frame of 2-3 years. These volumes and without economies of scale, local retailers are
typically are met predominantly through large, unable to support the investments necessary to
organized retailers and franchises. For these reasons, maintain the quality of products.
the growth of cold chain services often coincides with
the growth of the international retail and franchise The economic activity sparked by these international
markets. It is ultimately the retailers and the branded transactions increases the income of engaged locals
marketers that control the production and flow of and spurs investment by international retailers and
products through cold chains to the consumers. franchisors. As the economy develops into a higher
income consumer market and the retail industry
By their nature, most services, like retailers, provide becomes more organized, cold chain services will shift
sales to foreign countries that require a physical more product from exports to the retail and franchises
presence in that country. Service providers therefore that begin to operate locally.
establish branches or foreign affiliates to provide these
international services. It is critical that, in order for In many of these developing economies, smaller mom
services in a country to grow, there must be in place and pop retail establishments can often be the
business friendly government policies that are open to greatest recipients of benefits from this situation, since
foreign direct investment (FDI). Protectionist measures these local establishments are often able to utilize
by foreign governments, often seen in lower and economies of scale from the same supply chains as the
middle-income economies, tend to restrict foreign large companies without the large footprint.
services activities, especially in the area of distribution
services like retail. In doing so, these economies It cannot be overstressed that this model of the
inadvertently restrict the opportunities to expand and development of an economy through cold chain only
grow the business function of cold chain services. works in those economies with business friendly trade
policies. In fact, according to the World Bank, gravity
While the prime markets for cold chain are often model studies have shown that important drivers for
consumer driven, developed economies and, in some FDI include the growth potential for a market, the labor
cases, emerging economies can pose opportunities for environment and the distance and ease of reaching
cold chain operators to service exports that are important markets, which includes the openness of an
primarily headed to foreign consumer markets. These economy to trade. Further, the World Bank has
prime developing markets need to have policies that highlighted that a 1-percentage point difference in the
are open to FDI and facilitate ease of trade to allow regulatory indicator portion on the Ease of Doing
businesses to see clear paths to a return on the Business report correlates to FDI inflows of $250 to
31
investments they will need to make. $500 million annually.
In developing, lower income markets, the most likely In developed, higher income economies, competition
initial opportunities include design and engineering of from numerous cold chain service providers can pose a
warehouses, the operation of third party logistics and challenge. The most likely opportunities for U.S. cold
technologies that can efficiently overcome shortfalls in chain providers, therefore, will be in the consolidation
infrastructure development, for example: developing of existing fragmented systems into higher efficiency
economies with unreliable electricity may require systems that provide increased reliability and higher
unique solutions or alternative energy sources to quality options that allow retailers to cater to particular
properly maintain warehouse temperature; a lack of consumer tastes. New technologies that address
adequate roads may also mean new transportation particular aspects of each market, such as cultural
options or versatile refrigerated containers need to be preferences and omnichannel retail shopping, may also
developed. be a significant long-term growth opportunity.
As these solutions are developed and introduced, they

provide new access to international markets and

Opportunities temperatures by adjusting internal compartments to
meet specific product temperature needs. Often
Cold chain systems require industrial designers and modern trucks are fitted with GPS monitoring systems
engineers to develop efficient warehousing and storage that can provide data on location and can help
systems, as well as refrigeration units for operators maintain the temperature in individual
transportation vehicles and networks. Engineers and compartments. Individual trucks can cost between
industrial design teams take into account what type of $30,000 to well over $150,000. Warehousing vehicles
product will be stored in a warehouse facility, how and reefer trucks helped contribute to $4.5 billion
much processing will be done within the facility, the worth of trucks, buses and special purpose vehicles
36
quantity of items to be stored and the products exported by the United States. in 2014, and U.S.
specific handling requirements. Many facilities hold owned foreign affiliates in transportation equipment
37
varying types of product sizes and handling sold more than $3 billion in 2013.
requirements, and the design of these warehouses will
often take into account the need for flexibility in Managing cold warehousing and delivering products is
cooling and handling conditions. A cold warehouse and often contracted out to third party logistics operators
storage system may cost several million dollars to (3PLs), which provide important service export
design and build. These sales and services help opportunities. 3PLs offer outsourced logistics services
contribute to the $4 billion in U.S. industrial scaled and customized based on the needs of the
engineering exports and $12.3 billion in architecture customers they serve. Their expertise in management
32
and engineering services in 2014 and $184 billion and transportation logistics and economies of scale
33
dollars in industrial equipment exports in 2012. often provide services at a lower cost than customers
can provide for themselves. In 2013, U.S.-owned
Once these systems are in place, cold chain foreign affiliates in transportation and warehousing
38
warehouses require maintenance and repair services. had sales of more than $63 billion.
Freon-based systems are an affordable option for
small-scale chiller systems; however, ammonia-based In addition, express delivery service providers also have
refrigeration systems have long been the industry cold chain logistics services that are expanding
standard for large industrial refrigeration. U.S. internationally. Express delivery service providers can
companies have also developed new technologies for deliver high-value temperature-sensitive products,
small charge ammonia systems that use up to 98 primarily vaccines, medical and biotech products, by air
percent less ammonia and can replace older, inefficient to facilities around the world. These transportation
34
systems. All of these systems will require regular services contribute to the $90 billion of U.S. exports
39
maintenance performed by skilled professionals. Due seen in transport services in 2014.
to ammonias hazardous qualities, safety and
administrative controls must be implemented for Managing and coordinating the warehouse and
equipment maintenance and service. The United States transportation services that are necessary to maintain
exported $22.3 billion worth of maintenance and repair proper product temperatures is aided through
35
services in 2014 a number that ITA expects to advanced logistics and warehouse IT and managing
increase, as additional cold chain development takes software. While some logistics service providers
place in emerging markets. develop their own proprietary software, many rely on
IT and software service provided by technology
In a cold warehouse, forklifts and trucks are needed to companies. U.S. exports of computer software,
move and store pallets of products. These trucks vary telecommunications and information services totaled
40
significantly based on the type and design of a cold $75.3 billion in 2014, and services from U.S. foreign
41
chain facility. Additionally, refrigerated transportation affiliates sold more than $6 billion in 2013.
equipment, such as refrigerated trucks, will be required
to transport products to retailers, franchisors or end Once in place, cold chain systems make it possible for
users. U.S. exporters to reliably ship meat, poultry, fruit and
vegetables. Various forms of frozen and fresh food,
Modern refrigerated trucks, known as reefers, are wine and other beverages can also be exported
designed to be very versatile and can be configured in through these advanced systems. In 2014, nearly $145
42
minutes to carry a wide variety of cold products. Many billion worth of food products were exported. U.S.
trucks can carry products of varying refrigerated foreign affiliates in agriculture sold $547 million, and

food services sales amounted to nearly $39 billion in
43
2013.
Cold chain systems also allow U.S. pharmaceuticals,

biotech materials and some sensitive electronic
equipment to be exported safely.

Country Case Studies
The following pages include country case studies that summarize export opportunities in selected
markets. The overviews outline ITAs analysis of the U.S. export potential in each market and
represent a range of countries to illustrate a variety of points. The markets included in the case
studies are representative of certain regions and are not listed in any priority ranking order.


Australia
Australias established cold chain may benefit from the ratification Overall Rank High-Income
of TPP, as agriculture and other products exported from the Category
Ranking
country to TPP partners may see significant increases. The current
market may also see improvements in efficiency through
9 8
consolidation.
Australia has an estimated GDP of $1.46 trillion. U.S.

exports of goods and services are around $46 billion, Figure 11:
th Competitiveness Index Score
making it the United States 15 largest export
Government/Regulatory 4.5
market. U.S. majority owned foreign affiliate sales in Labor Force 4.9
Australia were $184 billion, and distribution services Infrastructure 5.6
44
accounted for $41 billion in 2013. Demand 4.7
Industry Interest 4.0
The population of Australia is considered high income, World Economic Forum and Global Cold Chain Alliance
Economic Statistics
with a per capita income of about $42,760 (PPP) per
Population 24 Million
year. Unemployment has increased over several years Cold Storage Capacity 5.08 M/m
3
45
to reach 6 percent in 2014. Pharmaceutical Sales $10.5 Billion
Food Spending $67 Billion
Modern supermarkets make up approximately 35 Food Spending per Capita $2,793
46 Agribusiness Market $44 Billion
percent of the Australian food retail market, and
Agriculture Imports N/A
food spending is expected to grow to $74 billion by
47 Agriculture Exports $80 Billion
2020. BMI and Global Cold Chain Alliance
The Australian franchise industry is well-established

with more than 1,000 franchisors and 65,000 franchise
units. Australian franchise concepts make up 92 Agriculture production is over $50 billion more than
percent of the market, with the U.S. share at around 3 half of which is exported primarily to its neighbors in
percent. Nearly 18 percent of franchisors are in the the Asia Pacific region. With the newly negotiated
food and beverage sector. With potential growth in Trans-Pacific Partnership (TPP), as well as negotiations
the healthy alternative side of food and beverage, with Asian economies for more trade agreements,
opportunities may exist for cold chain operations that farm output is expected to expand providing
service this aspect of the market. opportunities for U.S. cold chain service providers to
support the industry. The full agribusiness economy,
E-commerce in Australia has been estimated to be including supporting functions is over $150 billion,
over $17 billion in 2015, according to National more than 12 percent of the Australian economy.
Australia Bank, with over 12 million Internet
subscribers and 20 million cell phone subscribers, th
Australia ranks 13 out of 140 on the World Banks
indicating potential for growth in e-commerce for 48
Ease of Doing Business 2016 Rankings. Since 2013
refrigerated products. the Australian government has focused on improving
the business environment and its openness to
The pharmaceutical industry has seen sales of $10.5 investment by reviewing and reforming labor markets
billion in 2015, and sales are expected to remain flat and taxation and reducing regulatory barriers.
through 2020.

th
Australia is ranked 13 out of 124 countries in the private industry, such as ports that service western
World Economic Forums Human Capital index 2015. commodities industries.
The population has a median age of 37 and a labor
th
participation rate of 65.2 percent. More than 50 Australia ranked 16 out of 160 countries in the World
percent of the workforce is tertiary educated, yet only Banks 2014 Logistics Performance Index (LPI). The LPI
slightly more than 30 percent of the workforce is is an indicator of key dimensions of a countrys
engaged in high skilled employment, indicating an logistics performance, including Customs,
educated workforce that is underemployed for its skill Infrastructure, International Shipments, Competence,
49
level. Tracking and Tracing, and Timeliness. While Customs
has shown improvement, the Ease of International
51
Shipments has declined significantly. The ratification
of TPP may reverse this decline.
Figure 12: World Bank Doing Business Ranking
Country Ranking GDP Per Capita The U.S. has a free trade agreement with Australia
(2016) (PPP, 2014) that has virtually eliminated tariffs on U.S. exports.
Australia 13 $43,929 Australia is a signatory to the recently negotiated TPP.
Russia 51 $25,635 Upon ratification, U.S. businesses may find increased
potential for growth and more opportunities to
China 84 $13,206
participate in trade. The agreement will eliminate
Brazil 116 $15,838 tariffs, lower service barriers and increase
India 130 $5,701 transparency while also increasing competitiveness by
supporting strong intellectual property rights
protection and enforceable labor and environmental
Transport infrastructure has seen a downward trend
obligations.
since 2011, suggesting that Australia may not be
keeping up with growth, especially in ports and rail.
The TPP will promote fairness by ensuring non-
The countrys quality of transport infrastructure
th discriminatory treatment of U.S. goods and services,
overall, however, is ranked 16 out of 140 countries in
establishing rules for fair competition with State-
the World Economic Forum Global Competitiveness
50 owned enterprises and providing the same rights and
index. In recent years, with the decline of the
protections for U.S. investors that foreign investors
commodities markets, Australia has been selling off
currently enjoy in the United States while protecting
much of its government owned infrastructure to
the inherent right of governments to regulate.
Resources:
U.S. Commercial Service:

http://export.gov/Australia/
Australia Country Commercial Guide:

http://export.gov/ccg/australia090720.asp
Industrys Take:
Australia is a market dominated by several large
players and is reaping the benefits of a trade
agreement with China. That, however, does not
mean there is an opportunity for growth, as the
domestic market is relatively small in comparison to
other regions around the world. Thus, we see a round
of consolidation that might occur in the future.
Richard Tracy, Global Cold Chain Alliance

Brazil
Brazils culture, proximity to the United States and level of

Overall Rank Upper-Middle
development make it a prime location for cold chain export Category
growth; however, systemic government structural problems and Ranking
the effect of the regulatory environment on business 20
development and trade make any short to medium-term growth
6
diminutive.
With a GDP of $2.3 trillion, Brazil is the seventh largest Figure 13:
economy in the world and is the United States ninth Competitiveness Index Score
largest export market for goods. Exports to Brazil Government/Regulatory 3.0
account for 3 percent of total U.S. exports of goods Labor Force 3.6
and services or around $71 billion. U.S. majority Infrastructure 4.2
owned foreign affiliate sales in Brazil were $207 billion Demand/Business Factors 5.0
in 2013, and while retail sales numbers are not World Economic Forum and Global Cold Chain Alliance
available, distribution services contributed more than Economic Statistics
52
$18 billion. Population 208 Million
3
Cold Storage Capacity 16.0 M/m
More than half of Brazils population is considered Pharmaceutical Sales $26.3 Billion
middle class, earning between $11,500 and $29,000
Food Spending per Capita $963
per year. Unemployment has been increasing, and Agribusiness Market $222 Billion
inflation has recently been as high as 8.5 percent. Agriculture Imports $2.5 Billion
Agriculture Exports $7.3 Billion
The Brazilian retail market is heavily saturated. BMI and Global Cold Chain Alliance
Modern supermarkets have a market share of 50.7

percent and have seen slow growth of about 1.3
area of electronic sales is So Paulo, with 34 percent
percent over 2008 through 2013. The large
of total purchases.
metropolitan cities have limited opportunity for
growth overall; however, fresh food providers and
The pharmaceutical industry in Brazil has reached
franchise and restaurant service providers should
approximately $28 billion and has grown by 36
continue to see growth opportunities.
percent since 2010. Taxes on medicines are
approximately 34 percent, but the government
The franchise sector in Brazil is one of the main growth
expects these to be reduced over time.
engines and has consistently grown faster than the
stagnating economy. Many common U.S. franchise
Express delivery companies face particular challenges
restaurants have been expanding throughout Brazils
shipping into to the country. All goods processed
urban regions. Despite these trends, growth in
through the Simplified Custom Clearance, the process
franchising is likely to slow as the sector begins to
used for express delivery, face a flat 60 percent duty.
suffer the effects of an economy on the verge of
Express delivery providers bringing in refrigerated
depression.
items are also often charged a duty on the refrigerated
container, or unit load device, which is used to ship
E-commerce and m-commerce are rising in popularity,
temperature-sensitive products.
with as much as $14 billion in sales. Online sales of
refrigerated products, however, have not accounted
Agriculture is one of the largest sectors of the Brazilian
for any significant amount. The largest geographical
economy, comprising 22.8 percent, and large portions

of the country are still available to be cultivated. The Refrigerated warehouse service providers face
infrastructure of the country, however, creates numerous challenges in the Brazilian market. Lack of
extreme challenges in connecting farmland to the understanding about the cold chain within the
global economy. Opportunities may exist for 3PLs and Brazilian government has led to inefficient rules and
services that can provide vital cold chain links to these regulations. For example, a cool storage facility that
far flung Brazilian prairie regions. distributes prepackaged goods may be required to
abide by the same workplace guidelines as a meat
In October 2014, the Brazilian government published processing facility. As a result, employees are required
dietary guidelines that recommended the use of fresh to don full protective suits and scrub their boots and
foods over processed foods. The guidance suggests hands before entering or exiting the facility despite
that improved cold chain development will be needed the fact that warehouse employees will never come in
to meet the needs for fresh food. direct contact with any food or food products.
th
Brazil ranked 116 in the World Banks 2016 Ease of Most warehouse facilities in Brazil lack sufficient fire
Doing Business, a downgrade of 5 places since 2015, suppression systems because regulations do not exist
when the survey was recalculated. Of particular note that require their use. Fire suppression systems, often
were low rankings in the categories of Paying Taxes, developed and sold by U.S. companies, can be
Dealing with Construction Permits, Trading Across prohibitively expensive due to customs and
53
Borders and Registering Property. importation taxes and fees. Technologies in cold chain
Brazils economy has been in a downward spiral for management, such as computer-based and GPS
nearly two years. In February 2016, Moodys Investor tracking systems, are likewise expensive to acquire
Service cut Brazils sovereign fund rating to junk, citing and use in Brazil, thereby limiting the speed of growth
political turmoil and the countrys gross debt, which in the Brazilian market.
has increased to two-thirds the value of its economy.
th
Moodys downgrade was the last of the three major Brazil is ranked 78 out of 124 countries in the World
ratings firms to downgrade the country's investment Economic Forums Human Capital index 2015. The
grade and with a negative outlook, with most analysts population has a median age of 29 and a labor
54
believing that more downgrades are coming. participation rate of 69.8 percent. Approximately 8
percent of the population is tertiary educated, and the
Figure 14: World Bank Doing Business Ranking th
country is ranked 108 in ease of finding skilled
57
Country Ranking GDP Per Capita employees.
(2016) (PPP, 2014)
Russia 51 $25,635 With a lower educated work force than other
China 84 $13,206 countries in the region, it is important for cold chain
Brazil
operators to perform a significant amount of on-the-
116 $15,838
job training.
India 130 $5,701
Transportation infrastructure in Brazil is a mixed bag
of success and failures. Brazils quality of transport
Customs issues, taxes and fees can limit opportunities th
infrastructure is ranked 77 out of 140 countries in
for U.S. businesses and inefficient rules and the World Economic Forum Global Competitiveness
regulations hamper growth opportunities for index. Of particular note are low rankings in areas of
businesses engaged in cold chain operations. Quality of Overall Infrastructure, Quality of Roads and
According to the World Bank, on average businesses Quality of Port Infrastructure
58
55
pay taxes totaling 69.2 percent of profits. Corruption
and high levels of crime also plague the business- Road transportation within and around major cities is
operating environment. often highly developed, though traffic congestion is a
major concern throughout most of the day.
Brazil has one of the lowest levels of market Distribution of products during off hours can be
penetration for refrigerated warehouses at .09 cubic limited due to cultural aspects surrounding business
meters per urban resident, though the market has practices and crime concerns.
been growing at a rate of 26.5 percent from 2008 to
56
2014.

th
Brazil ranked 65 out of 160 countries in the World poorly developed and regulations surrounding
Banks 2014 Logistics Performance Index (LPI). The LPI management of rail lines make travel by rail a means
is an indicator of key dimensions of a countrys of last resort for temperature-sensitive products.
logistics performance including Customs,
Infrastructure, International Shipments, Competence, Improvements to Brazils government regulatory
Tracking and Tracing, and Timeliness. Virtually every environment through trade facilitation can play a role
category in the index declined from the previous in identifying where improvements can be made
studies of 2010 and 2012. Brazils customs are ranked within the cold chain system. Brazil recently ratified
th 59
94 in the survey, reflecting Brazils heavily the World Trade Organization Trade Facilitation
bureaucratic processes which focus on using customs Agreement, which may indicate a willingness to focus
clearance as a profit center. on this area.
Logistics in Brazil are some of the most costly in the The ITA is working with the Brazilian government
world. Distribution makes up about 32 percent of through the U.S Brazil Commercial Dialogue to map
logistics costs, suggesting that there are considerable the cold chain and identify trade bottlenecks and
opportunities for 3PLs and service providers that can barriers. The identification of these barriers will help
implement improvements in warehousing, inventory guide policy efforts to reduce and remove these
management and transportation management. impediments to trade for distribution services
industries.
While rail is considered to be about 30 percent
cheaper than road transportation, rail infrastructure is
Resources: Trade and Investment Guide (Brazil Export):

Brazil Country Commercial Guide: http://www.brasilexport.gov.br/
http://export.gov/ccg/brazil090732.asp
Securities Exchange Commission (CVM):
USTR National Trade Estimate Report: http://www.cvm.gov.br/subportal_ingles/index.html
https://ustr.gov/sites/default/files/files/reports/2015/
NTE/2015%20NTE%20Brazil.pdf Superintendence of Private Insurance (SUSEP):
http://www.susep.gov.br/english-susep/index
U.S. Mission to Brazil - Intellectual Property
Protection:
http://brazil.usembassy.gov/intelprop.html Associao Brasileira da Indstria de Armazenagem
Frigorificada:
U.S. Commercial Service: http://www.abiaf.org.br/
http://export.gov/Brazil/
Brazil Agency for Industrial Development (ABDI):
Brazil Chamber of Electronic Commerce: http://www.abdi.com.br/
www.camara-e.net
Brazil Bank Federation (Febraban):
Brazilian Association of Credit Card and Service http://www.febraban.org.br/
Companies:
www.abecs.org.br Brazil Franchise Association (ABF):
http://www.portaldofranchising.com.br
E-bit - Certificao de Consumidores:
www.ebit.com.br
Industrys Take:
Foreign Investment and International Trade Promotion The devaluation of the Real is negatively affecting the
Agency (APEX Brasil): Brazilian business climate. If the political situation
http://www2.apexbrasil.com.br/en could become more stable, the economy would
improve.
Industrial Property Institute (INPI): Richard Tracy, Global Cold Chain Alliance
http://www.inpi.gov.br/


China
With a large, rapidly growing demand and well-established Overall Rank Upper-Middle
Category
infrastructure in large urban populations, China is a top market
Ranking
for cold chain development.
10 2
With a GDP of more than $11 trillion, China is the Figure 15:
largest economy in our Top Market Report. Exports of Competitiveness Index Score
goods and services to China reached $167.2 billion in Government/Regulatory 4.1
2014, a growth of 4.4 percent, and accounted for 7.1 Labor Force 4.4
percent of all U.S. exports. U.S. majority owned Infrastructure 4.7
Demand/Business Factors 4.8
foreign affiliate sales in China were $260 billion, and
distribution services accounted for more than $40 World Economic Forum and Global Cold Chain Alliance
60
billion in 2013. Economic Statistics
Population 1.376 Billion
3
The population of China is considered upper middle Cold Storage Capacity 76 M/m
income, with a per capita income of about $13,170 Pharmaceutical Sales $108 Billion
Food Spending $1.2 Trillion
(PPP) per year. Unemployment has held steady at 4.7 Food Spending per Capita $875
percent, and inflation was less than 1 percent in Agribusiness Market $1.36 Trillion
61
2014. Agriculture Imports $65.7 Billion
Agriculture Exports $10.5 Billion
China is currently undergoing a rapid transition from a BMI and Global Cold Chain Alliance
manufacturing and construction led economy to a

consumer led economy. The rapidly growing middle
class offers huge opportunities for retailers, franchises, and total stores from the top 100
franchisors and restaurant service providers to expand franchises amount to over 120,000. Nearly 40 percent
and grow. At 5.34 percent, the market share of of franchise operations are engaged in food and
modern grocery retailers is at the low end of the beverage and retail. Per-capita grocery sales at these
spectrum for all countries; however, this market share establishments have increased at an annual growth
has increased at a rate of 64.9 percent from 2008 to rate of 7.6 percent from 2008 to 2014.
63
62
2013.
U.S. businesses must be mindful of the challenge to
Many consumers outside of first tier cities still find reliable suppliers that use proper practices and
purchase agriculture and food products from a training; in 2013 a supplier sold KFC and McDonalds
traditional wet market, limiting the full utilization of expired meat. This food safety scare hurt the brand
cold chains. On the other hand, major cities like Beijing reputation of McDonalds and KFC and led to a
and Shanghai have seen a dramatic increase in the significant plunge in sales.
demand for and utilization of cold chain warehouse
and transportation systems, especially as western The Chinese population has more than 632 million
businesses and cultural influences become more Internet users, and more than 400 million participate
popular and consumers become more educated and in online shopping. According to China governments
aware of food safety issues. National Bureau of Statistics, e-commerce sales
increased by nearly 50 percent from 2013 to 2014 to
Franchising is still a relatively new concept in China, reach $449 billion. Sales are expected to reach as high
though U.S. franchisors and retailers have seen as $1 trillion by 2019.
considerable growth. There are more than 4,500

As in many Asian markets, e-commerce is giving rise to farm regions, combined with the fact that most farms
a new trend among shoppers who purchase groceries are small and do not have the economy of scale to
and meals online to be delivered to their residence or invest in cold chain transportation, make farm to fork
business, bypassing typical retail establishments. Food cold chain development difficult. These challenges,
products purchased online are often deemed to be however, also provide opportunities for 3PLs and cold
safer and of better quality than those purchased at chain service providers to develop unique solutions
local markets. This alters the standard model of cold that can link these farmlands to the global economy.
chain services and opens a new opportunity for U.S.
th
cold chain service providers. 3PLs who have been able China ranked 84 in the World Banks 2016 Ease of
to develop new, efficient ways to deliver temperature- Doing Business, a slide of 1 place since 2015, when the
sensitive products directly to consumers have seen survey was recalculated. Of particular note were low
massive growth that will likely continue for the rankings in the categories of Dealing with Construction
foreseeable future. With continued improvement of Permits, Starting a Business, Protecting Minority
66
the cold chain sector, U.S. SMEs are also expected to Investors and Paying Taxes.
find better opportunities to enter the Chinese market.
th
China is ranked 64 out of 124 countries in the World
Pharmaceutical sales in China are expected to hit $115 Economic Forums Human Capital index 2015. The
billion in 2016 and reach nearly $200 billion within population has a median age of 35, and a labor
64
seven years. A major driver of cold chain biopharma participation rate of 71.3 percent. Less than 6 percent
expansion in China is likely to be insulin. Currently, 25 of the population is tertiary educated, and the country
th 67
percent of the world diabetic population lives in China, is ranked 27 in ease of finding skilled employees.
yet China only consumes about 6 percent of the
65
worlds insulin. Transportation and storage of Figure 16: World Bank Ease of Doing Business
vaccines and pharmaceuticals by ill-equipped or Ranking
untrained service providers has been a big problem in Country Ranking GDP Per Capita
China. Experts have expressed to ITA that many of the (2016) (PPP, 2014)
vaccines administered in the country have been Russia 51 $25,635
rendered ineffective due to temperature fluctuations. China 84 $13,206
Brazil 116 $15,838
U.S. express delivery companies have made significant
investments in China to meet the many opportunities India 130 $5,701
and challenges the market holds. These investments
include establishing aviation hub operations to link Refrigerated warehouse capacity has seen CAGR of 34
China with global markets, establishing delivery percent, and investments increased by $16 billion in
68
services throughout China and buying Chinese logistics 2013. The need for cold chain service providers,
firms to expand. In China, express delivery services refrigerated warehouses, 3 PL's and EDS will continue
(EDS) have become a thriving industry, but industry to expand at a rapid pace. The country is expected to
still faces several problems. become the largest 3PL market in the world by the
end of 2016, and there is a large opportunity for U.S.
69
Burdensome and often conflicting regulatory service providers to gain market share.
requirements are imposed by different Chinese
government agencies, not only at the national level Cold chain capacity may increase by as much as 20
but also at the provincial and municipal levels. This times current capacity over the next decade. It is
skews competition and adds to operators costs. A key important that the emerging cold chain industry
industry regulator also owns a key state-owned utilizes international best practices that U.S.
competitor. Licensing, customs and transportation businesses have come to expect; otherwise, U.S.
inefficiencies all must be addressed. export expansion opportunities may be limited.
China accounts for 17 percent of U.S. agriculture
exports, making it the largest agriculture export To help increase the use of international best practices
market for the United States. At nearly $1.4 trillion, in cold chain operations, ITA created the American
agriculture comprises more than 10 percent of the Cold Chain Working Group, comprised of industry
Chinese economy. The expansive size of the country representatives and government officials that periodically
and the lack of infrastructure in the lesser-populated

meet in Shanghai to discuss the timing and facilities necessary for operations. Due to the massive
implementation of applying international best size of the country, infrastructure outside of the major
practices in the cold chain sector. cities, including transportation and electricity can
sometimes be a challenge.
th
China ranked 28 out of 160 countries in the World
Banks 2014 Logistics Performance Index (LPI). The LPI Resources:
is an indicator of key dimensions of a countrys
logistics performance including Customs, U.S. Commercial Service:
Infrastructure, International Shipments, Competence, http://www.export.gov/china/
Tracking and Tracing, and Timeliness. The country has
shown overall improvement in every category of the China Country Commercial Guide:
Index since 2007, though the category of Customs has http://export.gov/ccg/china
th
slightly declined since 2012 to the rank of 38, due
largely to the cumbersome process and significant Agricultural Affairs Office: [email protected]
70
amounts of paperwork.
The Chinese Central Governments Official Web Portal
A lack of knowledge of internationally recognized best http://english.gov.cn/
practices, clear concise regulations and enforcement
in transportation and cold chain logistics means Guide to Investment in China (site of Chinas Ministry
smaller logistics providers in China often cut corners to of Commerce)
save costs. This has led to inconsistencies in quality http://fdi.gov.cn/
and mistrust between businesses and consumers and
acts as a barrier for any company entering the market The American Chamber of Commerce in Shanghai
71
that utilizes proper practices and equipment. China Business Report 2013-2014
http://www.amcham-
Lack of trained labor specific to the logistics industry shanghai.org/ftpuploadfiles/Website/CBR/2013-2014-
has made business expansion difficult for many U.S. China-Business-Report.pdf
companies. APICS (formerly the American Society of
Transportation and Logistics) has developed training and China Council for the Promotion of International Trade
certification in logistics management and is working on http://www.bizchinanow.com
similar programs for the cold chain industry in China.
Events:
While China seems to have no shortage of available
labor, the struggle of logistics companies to reduce APICS 2016 SHANGHAI Shanghai, China | 14-15 April
costs often means lower levels of training for 2016
employees. Cold chain operators may find a limited
amount of trained labor available for operations and
should, therefore, anticipate providing extensive
amounts of training for all aspects of logistics and cold
chain operation. Further work is necessary to improve Industrys Take:
logistics management and reduce barriers to entry for The devaluation of the Real is negatively affecting the
U.S. companies. Brazilian business climate. If the political situation
could become more stable, the economy would
Chinas quality of transport infrastructure is ranked improve.
st
51 out of 140 countries in the World Economic Forum Richard Tracy, Global Cold Chain Alliance
Global Competitiveness index and has consistently
72
improved in the category since 2011. The
infrastructure is well-established in most urban
locations. While congestion can be a major source of
frustration, many logistics providers have developed
solutions, such as delivery by mopeds and scooters.
Electricity in urban environments is generally stable,
allowing cold chain providers the means to power the


India
Overall Rank Lower-

Indias potential market size should make it near the top of the Top
Middle
Market countries; however, constantly shifting regulatory barriers Category
and complex tax schemes limit the large scale investments 15 Ranking
necessary to fully realize the countrys potential. 1
With an estimated GDP of $2 trillion, India is expected Figure 17:

to see growth of nearly 7.5 percent. Exports of goods Competitiveness Index Score
and services from the U.S. amounted to $38.9 billion or Government/Regulatory 4.1
1.8 percent of all U.S. exports in 2015. U.S. majority Labor Force 4.1
owned foreign affiliate sales in India were $70.8 billion Infrastructure 3.8
Demand 4.5
and distribution services accounted for more than $13
73 Industry Interest 4.0
billion in 2013. World Economic Forum and Global Cold Chain Alliance
The population of India is considered lower middle Economic Statistics
income, with a per capita income of about $5,630 (PPP) Population 1.31 Billion
3
per year. Unemployment has held steady at 3.6 Cold Storage Capacity 131 M/m
74 Pharmaceutical Sales $16.3 Billion
percent, and inflation was 3.0 percent in 2014.
The $500 billion dollar retail industry is serviced by over Agribusiness Market $263 Billion
12 million mostly family-owned businesses. Such a Agriculture Imports $6.4 Billion
fragmented industry can make it difficult for cold chain Agriculture Exports $8.1 Billion
operators to see sufficient returns on the large BMI and Global Cold Chain Alliance
investment that is required to set up efficient

operations. It is estimated that the highly fragmented
cold chain sector that has sprouted up includes more E-commerce has averaged 34 percent growth over the
75
than 3,500 mostly unorganized participants. last several years to reach about $22 billion. Internet
use in India has grown significantly to 250 million
India is currently undergoing a rapid transition to a people. Unfortunately, the Government of India forbids
consumer led economy. With over 250 million middle- foreign direct investment in business-to-consumer e-
income consumers, huge opportunities should exist for commerce, and as of yet, sales of groceries and
retailers to expand and grow. Protectionist policies of temperature-sensitive products have not taken off like
the Indian government, however, have prevented many in other Asian economies. In February 2016, The
Western retailers from entering the market and have Economic Times reported that the Indian government
kept the share of modern supermarkets in India down may be looking into changes to e-commerce regulations
to an abysmal .05 percent, lower than virtually all other that would allow for 100 percent FDI in marketplace
countries in the developed or developing world. With a models of e-commerce, potentially creating
76 77
growth rate at 4.3 percent, it is unlikely much will opportunities for U.S. investment.
change in the near future.
Express delivery companies are helping to increase the
The franchise sector in India is rapidly expanding. investment into air cargo infrastructure in India. The
Currently valued at around $14 billion, the sector is country currently handles around 2.5 million tons of air
anticipated to reach more than $50 billion in the next cargo.
two years. U.S. fast food, casual restaurants and the
food and beverage segments are anticipated to reach Even though India is the largest producer of fruit and
$1.2 billion. the second largest producer of vegetables in the world,
it represents only 1 percent of world exports, and

th
childhood malnutrition in the country is as high as 45 2016, an increase from 134 in 2015, yet it is still the
80
percent. India is also the largest producer of milk, and lowest rated of the BRIC economies. Companies
30,000 refrigerated trucks in the country primarily serve entering the market can expect varying business and
the dairy market. economic conditions across all of Indias 29 states and 7
union territories, due largely to the decentralized nature
India is one of the largest consumers of food in the of Indias political system.
world and is the third largest producer of agriculture.
Huge opportunities may exist for U.S. cold chain In 2014 India Prime Minister Narendra Modi stated that
providers that can efficiently consolidate the 3,500 his governments goal was to bring India into the Top 50
companies currently engaged in cold chain operations. of the World Banks Doing Business ranking by
The food service industry is estimated to be nearly $50 increasing transparency and simplifying rules.
billion and is anticipated to grow at 10 percent annually
for the next several years. Despite some positive developments, including the
Government of India's reduction of certain foreign
The Global Cold Chain Alliance estimates that the cold direct investment (FDI) restrictions, businesses often
storage market in India has been growing at a rate of 25 remain reluctant to invest in the market due to a variety
78
percent per year to reach $8 billion in 2014. Despite of problems that make it difficult to operate, including
the growth, India sees nearly 40 percent of its produce poor infrastructure, a complex tariff regime with some
go to waste annually due to inadequate cold chain of the highest tariffs in the world, protectionist policies,
infrastructure; one-third of its losses occur during bureaucratic inefficiencies and intellectual property
79
storage and transit. . theft.
th
Experts have estimated that India has less than half the India is ranked 100 out of 124 countries in the World
cold chain capacity necessary to meet its current needs Economic Forums Human Capital index 2015. The
and will require as much as $100 billion of infrastructure population has a median age of 25 and a labor
investment over many years. While some optimistic participation rate of 54.2 percent. Approximately 6
estimates expect the cold chain sector to grow to $12 to percent of the population is tertiary educated, and the
th
$15 billion over the next five years, many large retailers country is ranked 40 in ease of finding skilled
81
and large cold chain service providers will likely employees.
continue to hold off investing the amount of large scale
capital necessary to efficiently serve the country until
the retail market is more organized, restrictions are Country Ranking GDP Per Capita
(2016) (PPP, 2014)
lowered and there are greater opportunities for return
Russia 51 $25,635
on investment.
China 84 $13,206
In recent years, the Indian government has made Brazil 116 $15,838
attempts to improve investment in cold chain, including
India 130 $5,701
exempting customs duties on refrigeration units and
equipment, setting up Mega Food Parks, providing tax
benefits on investments and even creating a National The Government of India has taken a lot of steps to
Centre for Cold Chain Development. These have been reduce restrictions on FDI; however, much of the
welcome changes and have added to the cold storage leading government partys constituents are small shop
growth rate; however, most large potential investors owners, and thus, it is still very protective of the multi-
still remain on the sidelines, awaiting improvements to brand retail sector and limits opportunities for outside
the retail environment, especially since cold chain competitors to enter the market.
operations in India can cost more than double that of
many other countries. Currently, multi-brand retailers may own up to 51
percent of a business in India with the following
India has been a disappointment for many service restrictions:
industries over the last several years, as high Must seek state government approval
expectations for greater export opportunities have not Only permitted to open in cities with a population
th
been realized. India was ranked 130 out of 189 greater than 1 million residents
countries in the World Banks Doing Business rankings in

Must commit 50 percent of the first $100 million Global Competitiveness index. The quality of roads has
investment into developing backend infrastructure been increasing since 2001; however, there is a
Must source a minimum of 30 percent of the total downward trend in quality of railroad and air transport
87
value of goods from Indian SMEs infrastructure.
According to the World Economic Forum, the small- Sixty percent of freight moves on a road network with
scale and fragmented retail market that the less than 5 percent of those roads national highways.
government protects in India prevents the scale of The average truck speed across the country is around 13
capital investment necessary to create a modern M.P.H. Often, retail stores may not be able to meet
82
logistics system. A refrigerated transportation study demands due to delays in shipment caused by
performed by Ernst & Young for the Indian Ministry of transportation infrastructure.
Agricultures National Centre for Cold Chain
Development (NCCD) recommended the government A low level of organized 3PLs means that as much as 75
promote more organized retailing to encourage percent of truck owners have a fleet of less than 5
83
investment in the cold chain sector. vehicles. Most of these trucks are more poorly
maintained and are more than a decade old.
Further, the WTO reported in 2015 that Indias trade
policy is used to regulate domestic supply and policies The Indian government has plans to upgrade the 13
frequently change, causing disruptions and major ports to accommodate the nearly 200 percent
unpredictability for business. Import and export taxes increase in cargo expected over the next seven years.
and duties, as well as minimum export prices, are used Currently, the ports suffer from outdated and
ad hoc and prevent significant long-term strategic insufficient cargo handling equipment and terminals.
84
development across industries. This anticipated investment may provide opportunities
for U.S. companies to develop cold chain facilities that
In June 2015, the WTO ruled that the restrictions India can help India meet current and future demand.
put in place on U.S. agriculture products, including
poultry, eggs and live pigs, citing concerns about avian Despite having the fourth largest rail system in the
influenza violated the WTO Sanitary and Phytosanitary world, most shippers avoid rail. The national rail system
(SPS) Agreement. Afterward, according to the U.S. is underinvested, but the Indian government is
International Trade Commission, the Indian Ministry of developing a dedicated freight corridor plan that will
Commerce examined ways to scientifically justify span 2,000 miles across the eastern and western sides
85
protecting Indias poultry farmers from U.S. imports. of the country. In February 2016, the Indian
government announced that it would budget $17.6
th
India ranked 54 out of 160 countries in World Banks billion on rail development for the fiscal year starting in
2014 Logistics Performance Index (LPI). The LPI is an April, a 21 percent increase from the previous year.
indicator of key dimensions of a countrys logistics
performance including Customs, Infrastructure, Opportunities may exist for cold chain operators that
International Shipments, Competence, Tracking and can create or utilize technologies that reduce
Tracing, and Timeliness. Overall, the country has dependence on the electricity grid. Energy
remained virtually unchanged in almost every category infrastructure is extremely lacking and serves as a huge
of the Index since 2007, though the category of Logistics impediment to integrating cold chain capabilities across
86
Competence has significantly declined. the supply chain.
th
India's current tax scheme has encouraged logistics The World Economic Forum ranked India 98 out of 140
88
companies to create small stocking facilities located in quality of electricity supply . Energy can contribute
throughout India's 30 states. The complexities of to 30 percent or more of cold chain operations costs in
taxation and the subsidization rules of India's national India, and many farmers do not have access to
government prevent large logistics companies from electricity. As recently as 2012, India had a multi-day
creating economies of scale through efficient hub-and- blackout, which affected over 620 million people.
spoke type distribution systems. Companies involved with cold storage must anticipate
nd
Indias quality of transport infrastructure is ranked 32 and adapt to the infrastructure by investing in costly
out of 140 countries in the World Economic Forum generators or risk losing their products in the event of
electricity failure.

Resources:
U.S. India Business Council:
U.S. Commercial Service: http://www.usibc.com/
http://www.export.gov/india/
Confederation of Indian Industry:
Country Commercial Guide: http://www.cii.in/
http://www.export.gov/ccg/india090814.asp
Events:
Global Cold Chain Alliance:
http://www.gcca.org/contact/india/ India Cold Chain Expo:
Madhya Pradesh, December 16-17, 2016
American Chamber of Commerce, India: www.gcca.org
http://www.amchamindia.com/
Industrys Take:
India is a huge market that is being eyed, from a distance,
by major logistics players. Equipment suppliers are already
there in full force; however, they are facing issues of price
sensitivity. Many customers make major purchasing
decisions based solely on price as opposed to quality.
Finally, the vast majority of consumers in India are still not
demanding the use of cold chain.

Indonesia
Indonesia ranks high in opportunities as a potentially large Overall Rank Lower-

market primed for infrastructure investment. Numerous Middle
Category
challenges, however, limit the interests of cold chain
Ranking
providers. It is the fourth most populous nation, and its 16
booming economy is experiencing rapidly rising incomes. 2
th
With a GDP of nearly $862 billion, Indonesia is the 16 Figure 19:
largest economy in the world. Goods and services Competitiveness Index Score
exports to Indonesia accounted for $10.7 billion in Government/Regulatory 4.0
2015. U.S. majority owned foreign affiliate sales in Labor Force 4.2
Indonesia were $31 billion in 2013, and while retail Infrastructure 4.4
Demand 4.5
sales are not available, distribution services
89 Industry Interest 3.0
contributed more than $2 billion. World Economic Forum and Global Cold Chain Alliance
Economic Statistics
The population of Indonesia is considered lower Population 258 Million
3
middle income, with a per capita income of about Cold Storage Capacity 12.3 M/m
$10,190 (PPP) per year. Unemployment has been Pharmaceutical Sales $5.8 Billion
stable around 6.2 percent, and inflation was 6.4
90 Food Spending per Capita $697
percent in 2014. Household spending per capita is Agribusiness Market $141 Billion
$6,810 and is expected to reach $9,098 by 2020 Agriculture Imports $4.7 Billion
91
(PPP). Agriculture Exports $11.4 Billion
BMI and Global Cold Chain Alliance
The consumer economy in Indonesia is booming, and

the country has abundant natural resources.
Infrastructure development in the country, however, with expansion of large retail markets. Deregulation
has not kept up, providing both opportunities and has helped remove some barriers, but new local
challenges for cold chain operators. content requirements are becoming burdensome to
business, and government corruption is a large
Small traditional shops dominate Indonesias retail concern.
landscape with little variety or few options available to
consumers. Furthermore, shelf space is limited, which The franchise sector in Indonesia is strong, with over
serves as a barrier to entry for many food producers 1,100 franchises and growth rates of 8 to 14 percent
wishing to sell products in the market. Significant expected to continue for the foreseeable future. Food
opportunities, however, do exist for food retailers to and beverage, quick serve and fine dining are all
find ways to better serve these markets. expected to expand in the country, as there is a strong
demand for U.S. restaurants and bars, especially in the
Within the larger metropolitan areas, wealthier major cities.
consumer groups often prefer fresh produce. Given
the rise in consumer income, ITA expects a E-commerce and m-commerce are rising in popularity
commensurate increase in demand for temperature- across Indonesia, with 4.6 million online shoppers
sensitive products sold by modern retailers. spending as much as $3.5 billion 2015. The industry is
expected to grow to 8.7 million customers this year
Despite a growth in supermarkets, protectionist and 135 million by 2023. Across Asian nations, there
activities of Indonesias government have interfered has been a trend toward purchasing groceries and
food products online. With Indonesias young, tech

savvy population this may be a great opportunity for category of transportation receded in quality since
cold chain service providers. 2013, indicating that Indonesia is not keeping up with
the rest of the world in transportation development.
The pharmaceutical industry in Indonesia has reached Quality of port infrastructure was the lowest rated
96
nearly $6 billion in 2015. Indonesia is in the process of category of transport infrastructure. Due to traffic,
implementing a national health insurance plan that poor infrastructure and pervasive corruption, many
will cover the entire countrys population by 2019, and choose to utilize warehousing in Singapore rather than
pharmaceutical sales are expected to rise to $9.7 central warehousing in Indonesia.
billion by 2020.
Indonesias ports are under strict government
Indonesias agriculture market is expected to grow to oversight, limiting the expertise and investment that
nearly $200 billion by 2020. Poultry, beef and veal foreign port operators and investors can provide. A
production are anticipated to increase 3 to 5 percent report from Maersk Line cited a lack of equipment,
annually through 2020, while consumption is expected low port efficiency and poor road access causing
92
to rise 4 to 6 percent annually. Indonesia has a congestion and sub-optimal port-efficiency, making it
97
significant fishery sector that is also in need of cold difficult to keep produce fresh.
chain services.
rd
Indonesia ranked 53 out of 160 countries in World
A swiftly growing domestic market was cited by Agility Banks 2014 Logistics Performance Index (LPI). The LPI
in ranking Indonesia fourth in their 2015 Emerging is an indicator of key dimensions of a countrys
93
Markets Logistics Index. The index highlights markets logistics performance including Customs,
that are primed for logistics investment. Infrastructure, International Shipments, Competence,
Tracking and Tracing, and Timeliness. Overall, the
th
Indonesia ranked 109 in the World Banks 2016 Ease country has shown slight improvements in most
of Doing Business Rankings, an increase of 11 places categories since 2007, but the categories of Tracking
since 2015, when the survey was recalculated. Of and Tracing and Ease of International Shipments have
98
particular note were low rankings in the categories of shown downward trends.
Starting a Business, Enforcing Contracts and Paying
94
Taxes. Indonesia has been described as a complicated market
for foreign producers and distributors to maintain an
th
Indonesia is ranked 69 out of 124 countries in the advantage in, due to geography and lack of
World Economic Forums Human Capital index 2015. infrastructure capabilities. There are 6,000 inhabited
The population has a median age of 27 and a labor islands in Indonesia spanning 5,000 km from east to
participation rate of 67.7 percent. Less than 5 percent west, making it difficult to efficiently and quickly
of the population is tertiary educated, and the country transport, store and distribute temperature-sensitive
th 95
is ranked 37 in ease of finding skilled employees. products. Even consumers on the island of Java, which
is home to the majority of the Indonesian population,
Figure 20: World Bank Ease of Doing Business are difficult to reach because shoppers are spread out
99
Ranking across the archipelago.
Country Ranking GDP Per Capita
(2016) (PPP, 2014) A majority of Indonesias remote sites lack available
Indonesia 109 $10,517 electrical power, which poses a significant constraint
Russia 51 $25,635 on cold chain development. The Government of
Indonesia is striving to address these infrastructure
China 84 $13,206
deficiencies by building seven maritime clusters that
Brazil 116 $15,838 will be powered by renewable energy and plans to
India 130 $5,701 open up the cold storage sector to 100 percent foreign
investment.
Indonesias quality of transport infrastructure is Halal logistics, which is prevalent in Malaysia (see
th
ranked 39 out of 140 countries in the World Malaysia case study), is becoming increasingly
Economic Forum Global Competitiveness index. Every prevalent in Indonesia and is a trend to monitor. U.S.
firms that are unaware of the certification

requirements and the special requirements involved in sensitive halal products may be at a competitive
transporting, storing and distributing temperature- disadvantage.
Resources: Country Commercial Guide:

http://export.gov/ccg/indonesia090815.asp
http://www.export.gov/indonesia/ Ministry of Trade:
www.kemendag.go.id
Industrys Take:
Indonesia is on the list of low index cold storage markets.
There are abundant natural resources; however, the
infrastructure is too poor to exploit them efficiently. Another
challenge is how to service a growing population that is
spread over an island nation.


Japan
Japans cold chain system is well-established. Cold chain Overall Rank High-Income
suppliers will be watching for new opportunities that may Category
Ranking
develop through the ratification of TPP and resulting
expected increases in international trade.
5 5
Japan has an estimated GDP of $4.6 trillion, making it more than 250,000 stores in the franchise industry
the third largest economy in the world. Exports of amounted to over $208 billion. The largest category of
goods and services from the U.S. amounted to $114.7 franchise establishments was in convenience stores at
billion in 2015. U.S. majority owned foreign affiliate 41 percent followed by food service chains at 17.2
sales in Japan were $235.9 billion, and distribution percent.
services accounted for more than $65 billion in
100
2013.
Figure 21:
The population of Japan is considered high income, Competitiveness Index Score
with a per capita income of about $37,920 (PPP) per Labor Force 4.7
year. Unemployment has steadily decreased for Infrastructure 6.0
several years to 3.7 percent in 2014, and inflation was Demand 5.6
101
1.6 percent in 2014 Industry Interest 4.0
World Economic Forum and Global Cold Chain Alliance
Japans food and agriculture market is estimated at Economic Statistics

nearly $1 trillion, spurred on by the importance of Population 127 Million
3
Cold Storage Capacity 32.6 M/m
food in the Japanese culture. Japanese spend, on
Pharmaceutical Sales $95 Billion
average, 23 percent of disposable income on food. Food Spending $311 Billion
Food spending is expected to reach nearly $354 billion Food Spending per Capita $2,455
102
by 2020. Agribusiness Market $68 Billion
Agriculture Imports $64 Billion
Consumers in the Japanese market tend to be Agriculture Exports N/A
obsessed with the quality and the taste of food over
the quantity, but recent trends have shown that the
importance placed on food value is increasing.
Branding is important to consumers as is the Japans 90 percent Internet penetration and a culture
appearance of food products, increasing the that prides itself on technology have led to
importance of high quality cold chain operations. outstanding growth in e-commerce. According to the
Ministry of Economy, Trade and Industry (METI), e-
Japan has a highly developed consumer driven commerce sales to consumers have increased at
economy based on a large and very broad middle class double digits annually since 2012, when the industry
with a high per capita income. Therefore, catering to saw growth of over 110 percent. Japan has more
consumer preferences, rather than competing on price active cell phones than citizens at 120 percent,
alone, presents an opportunity for U.S. exporters. U.S. according to the World Bank; therefore, it should be
brands in particular have an advantage due to their no surprise that m-commerce is the fastest growing
reputation for safe, high value products. segment of e-commerce, with more than 50 percent
growth in the first quarter of 2015. Food and beverage
With more than 1,300 chains, the franchise sector in sales currently account for around 12 percent of the
103
Japan is well-developed and growing. Sales from the $107 billion consumer e-commerce industry.

Japan spends more on health per capita than any Tracking and Tracing, and Timeliness. Overall, the
other country in the world. Pharmaceutical sales in country has shown slight declines in most categories
107
Japan are estimated at $95 billion in 2015 and are since 2007.
anticipated to increase to $108 billion by 2020, due in
104
part to Japans aging population. Imports account Japan has a well-established rule of law and is a large
for 31 percent of the market, and U.S. market share is player in international trade with strong protection for
around 20 percent when accounting for licensed property rights, including intellectual property rights.
th
compounds to Japanese manufacturers. Japan Despite this, Japan ranks 34 on the World Banks
represents an attractive opportunity for refrigerated Ease of Doing Business Ranking for 2016. Primary
logistics service providers to serve the growing challenges include paying taxes, getting credit and
108
pharmaceutical industry. starting a business. In addition, the United States
continues to call on the Japanese government to
Japan imports more food products than any other improve its regulatory environment, which can often
country in the world at $64 billion. The United States be overly burdensome toward business. Tariffs are low
is the largest single supplier of food to the country but complex, and the country has numerous
with $13.9 billion in exports. Consumer ready foods restrictions, including a bureaucracy that limits
account for $6.5 billion, which makes Japan the largest openness to foreign participation.
destination for these U.S. exports.
Figure 22: World Bank Ease of Doing Business
Japan is ranked fifth out of 124 countries in the World Ranking
Economic Forums Human Capital index 2015. The Country Ranking GDP Per Capita
population has a median age of 45 and a labor (2016) (PPP, 2014)
participation rate of 59.2 percent. More than 29 Japan 34 $36,426
percent of the population is tertiary educated, and the Russia 51 $25,635
rd
country is ranked 23 in ease of finding skilled
105 China 84 $13,206
employees.
Brazil 116 $15,838
Japan has a physical infrastructure that is very well- India 130 $5,701
developed and extends across the country. Japans
quality of transport infrastructure is ranked fifth out of
140 countries in the World Economic Forum Global
Competitiveness index. Port and air infrastructure are Japan is a party to the recently negotiated Trans-
the only categories that are not in the top 10 in the Pacific Partnership (TPP). Upon ratification, U.S.
world, but these have improved since 2011.
106 businesses may find increased potential for growth
Upgrading aging infrastructure has been a fiscal and more opportunities to participate in trade. The
stimulus priority for the government since 2012. agreement will eliminate tariffs, lower service barriers
and increase transparency, while also increasing
Supply chains in Japan have experienced a lot of competitiveness by supporting strong intellectual
consolidation, though there is still much room for property rights protection and establishing
further streamlining. U.S. cold chain service providers enforceable labor and environmental obligations.
may find great opportunities in further consolidation
and incorporation of new management and operation The TPP will promote fairness by ensuring non-
practices. discriminatory treatment of U.S. goods and services,
establishing rules for fair competition with State-
th
Japan ranked 10 out of 160 countries in the World owned enterprises and providing the same rights and
Banks 2014 Logistics Performance Index (LPI). The LPI protections for U.S. investors that foreign investors
is an indicator of key dimensions of a countrys currently enjoy in the United States while protecting
logistics performance, including Customs, the inherent right of governments to regulate.
Infrastructure, International Shipments, Competence,

Resources:
Japan External Trade Organization (JETRO):
U.S. Commercial Service: http://www.jetro.go.jp/en/invest/setting_up
http://export.gov/Japan/
Foreign Agricultural Service (FAS), U.S. Embassy, Tokyo
Japan Country Commercial Guide: http://www.usdajapan.org
http://export.gov/ccg/japan090820.asp
Events: Event: BioJapan 2015

Date: October 14 - 16, 2015
Event: INTERPHEX JAPAN Venue: Pacifico Yokohama
Date: June 29-Jul 1, 2016 Web: http://www.ics-expo.jp/biojapan/index.html
Venue: Tokyo Big Sight
Web: www.interphex.jp/en/Home/ Event: Medical Japan 2016
Date: February 24 26, 2016
Venue: Intex Osaka
Web: http://www.interphex-osaka.jp/en/
Event: CPhI Japan 2016

Date: April 20 22, 2016
Venue: Tokyo Big Sight
Web: http://www.cphi.com/japan/home/
Industrys Take:
Japan is a mature market with little to no growth in the cold
chain industry. It has been dominated by a number of
domestic players for years, and since the economy is flat,
this market is not high on the list of countries in which to
invest.
Global Cold Chain Alliance Industry Member


Kenya
Kenya and the other members of the East African Community Overall Rank Lower-
(Tanzania, Rwanda, Uganda and Burundi) are making progress in Middle
improving their regulatory environment and may have great long Category
Ranking
term potential. The massive amount of infrastructure 19
investments necessary, combined with the risk of government 4
change and the limited retail market size, however, currently put
Kenya in the lower half of our top market survey.
The following case study highlights and is primarily sourced from a Kenya Cold Chain Assessment performed by
the Global Cold Chain Alliance in partnership with the International Trade Administration. The full assessment
report is available at: http://www.gcca.org/resources/publications/white-papers-reports/keeping-it-cool-
assessing-cold-chain-in-kenya/
Kenya has an estimated GDP of $61 billion, and from the thousands of small farms spread across the
exports of goods from the U.S. amounted to $936 country, which currently have virtually no access to
million in 2015. U.S. majority owned foreign affiliate global trade markets.
sales in Kenya were $966 million in 2013, an increase
of 33 percent from 2012, though distribution services Pharmaceutical sales in Kenya are estimated at $797
109
data is not available for the country. million in 2015 and are anticipated to increase at a
compound annual growth of 9.5 percent to reach
111
The population of Kenya is considered lower middle around $1.2 billion by 2020.
income, with a per capita income of about $2,940
(PPP) per year. Unemployment has held steady at 9.2 Figure 23:
percent, but it should be noted that some unofficial Competitiveness Index Score
estimates range as high as 40 percent. Inflation was Government/Regulatory 3.8
110
7.5 percent in 2014. Labor Force 4.4
Infrastructure 3.8
Food spending is expected to grow 10 percent Demand 4.3
annually to reach $17.6 billion by 2020, boosted by World Economic Forum and Global Cold Chain Alliance
rising incomes and awareness of the health benefits of Economic Statistics
fresh foods. Population 204 Million
Cold Storage Capacity N/A
Franchising in Kenya is most common in the hospitality Pharmaceutical Sales $742 Million
Food Spending $10.9 Billion
sector with about a dozen world-renowned firms.
Food and beverage franchises have seen the most Agribusiness Market $8.9 Billion
growth despite the challenges in supply chains. Agriculture Imports $234 Million
Agriculture Exports $643 Million
Internet use in Kenya is low by many measures with BMI and Global Cold Chain Alliance
less than 25 million users. Due to the expansion of

wireless cell phone service, however, the country is
seeing a rapid growth in users. E-commerce is limited Kenyas agri-business is estimated at $8.9 billion in
112
to only a few industries, including airline hospitality, 2015 and is expected to rise $10.6 billion by 2020.
banking and courier services. Opportunities may exist Approximately 30 percent of Kenyas economy is
for 3PLs that can harness the power of the growing based on agriculture despite a virtual lack of options
cell phone market to schedule pickups and deliveries for most farmers to reach global markets.

Opportunities may exist for 3PLs and logistics with seaports that serve as gateways to its landlocked
providers that can navigate the complicated neighbors.
challenges of linking farms to the global market.
Kenyas 45 million people are classified as lower-
th
Kenya ranked 108 in the World Banks 2016 Ease of middle income, which puts it in the same classification
Doing Business, an improvement of 21 places since as Egypt, Indonesia, Morocco, Nigeria, Senegal and
2015, when the survey was recalculated. The country Ukraine. The country prioritizes academic education,
was one of the surveys largest movers, with but it lacks vocational training, which has led to a skills
improvements in Getting Credit, Getting Electricity gap in the labor market. The country also has some of
113
and Registering Property. the highest minimum wages in the East African region.
st
Kenya is ranked 101 out of 124 countries in the Agriculture represents 30 percent of Kenyas GDP, and
World Economic Forums Human Capital index 2015. the majority of the production occurs on small farms
The population has a median age of 19 and a labor that are engaged primarily in subsistence farming.
participation rate of 67.3 percent. Less than 6 percent These farms have neither the means nor incentive to
of the population is tertiary educated, and the country invest in cold storage and lack the knowledge or
th 114
is ranked 14 in ease of finding skilled employees. capacity to apply proper packaging or handling
techniques. Furthermore, a lack of access to adequate
Figure 24: World Bank Doing Business Ranking transportation infrastructure virtually cuts these
Country Ranking GDP Per Capita farmers off from all but the most local, informal
(2016) (PPP, 2014) consumer markets. Many agriculture products can be
Kenya 108 $2,954 seen transported along motorways in wheelbarrows
or on motorbikes, oxcarts or small vehicles, and many
Russia 51 $25,635
markets are supplied by pushcart.
China 84 $13,206
Brazil 116 $15,838 Current return on investment for cold chain in Kenya is
India 130 $5,701
estimated to take eight to ten years, far longer than
the three year ROI that is expected by most foreign
direct investors. High startup costs, long bureaucratic
In Sub-Saharan Africa, nearly 94 percent of all wasted delays and confusing rules and regulations combined
115
food is a direct result of insufficient supply chains. As with numerous legal and illegal fees throughout the
such, the Middle East and Africa is a significant long- business process make entering the market a daunting
term expansion goal for many food franchises. To task, especially for a capital intensive industry like cold
date, investment has been centered in the Middle chain.
East, North Africa and South Africa. In the past few
years, however, franchises have begun to look at Most warehouses in Kenya are established for the
underdeveloped markets, such as Kenya, as an export market, and many are created expressly for air
expansion opportunity. While franchises such as YUM shipment. The flower industry is one area that is well-
Brands already have locations in several Sub-Saharan
established and follows best international practices for
markets, the area remains largely underdeveloped. exporting. Kenya is a large exporter of fresh cut
flowers and accounts for 38 percent of flower imports
Kenya is the largest and most dynamic economy in the
into the European Union.
East African Community. It has a highly
entrepreneurial population that serves as the logistics On the domestic side, there are a few small firms
and financial hub for the region. The quality of within the major metropolitan areas that have cold
th
transport infrastructure is ranked 69 out of 140
facilities, though most are not designed and built for
countries in the World Economic Forum Global higher volume or efficiency befitting retail distribution
116
Competitiveness index, but Kenya has increasingly networks. Manual labor is often substituted for use of
become an important player in global food markets proper equipment and design, which leads to
with a thriving vegetable export industry. This is
inconsistencies, product damage and breaks in the
largely due to Kenyas location near many shipping cold chain.
routes and increasing capabilities of food processers
and producers. Kenya is one of only two EAC countries

Retailers and quick service restaurants face significant Global Standards. More than 80 percent of the local
constraints in Kenya and East Africa, including the lack food market in Kenya is informal, and these products
of cold storage facilities, poor infrastructure and the suffer from a fundamental lack of understanding or
seasonality of supplies. Despite this, many have consumer demand for best practices in handling and
committed to expanding operations, and quick service transportation.
restaurants are becoming a major driver in the growth
of cold chains. Most franchises have strict sourcing Rural distribution for food products is often based on
controls and requirements that prevent the use of informal networks where firms, such as Coca-Cola and
lower standard produce, thus having well-established Unilever, employ locals to take goods to consumers.
cold chain systems in place are necessary for their While these distribution networks are somewhat
growth. Despite the challenges, some franchisees have functional, they are often not efficient. Exporters that
reported that demand is out-pacing growth in the can make large investments in distribution networks
region. to supply the mass market may therefore develop a
118
competitive advantage.
th
Kenya ranks 145 out of 175 on Transparency
Internationals Corruption Perception Index, and many Approximately 18 percent of households in Kenya are
businesses consider any interaction with government connected to a power grid, and the lack of access to
as having a negative impact on business. Kenya electricity makes building a cold storage facility
operates a tax on the movement of agriculture outside of the main metropolitan zones very difficult.
products called a cess. The rate of the cess and the Even within metropolitan areas, weekly or even daily
application process seem to be arbitrary and up to the outages are common, necessitating backup systems.
discretion of the local authority, allowing Power surges and fluctuations are also common,
opportunities for illegal tariffs and fees. There are adding to wear and tear on compressors and other
suggestions that illegal government "fees" or payoffs equipment. Sourcing repair parts and services can also
may cost as much as 10 to 15 percent of revenue. be a major challenge for operators in the region.
Businesses that do not pay these fees may see delays
in shipments. There is significant opportunity for Kenya to increase
the competiveness of its exports through investment
The lack of clarity in food safety regulations and in ports. Refrigerated storage at the Port of Mombasa
enforcement is a major concern for cold chain does not exist, congestion is sometimes an issue and
operators. Across Africa, cold chain providers are most shippers of perishable products spend a
often hesitant to invest in the market due to a lack of premium on airfreight to avoid these issues. Uganda
transparency in government regulations that has also complained of theft of transit cargo at the
sometimes can generate an appearance of corruption. Port of Mombasa.
th
Kenya ranked 74 out of 160 countries in the World Kenya has a generally well-educated and mobile
Banks 2014 Logistics Performance Index (LPI). The LPI workforce with an entrepreneurial spirit. A lack of
is an indicator of key dimensions of a countrys vocational training, however, will need to be taken
logistics performance, including Customs, into account for businesses entering into the market.
Infrastructure, International Shipments, Competence, Also, a fundamental lack of basic food safety
Tracking and Tracing, and Timeliness. Overall, the knowledge and best practices by food handlers within
country has shown slight improvements since 2007, the countrys local supply chain mean that cold chain
though the category of Customs has declined operators must be diligent in establishing procedures,
st 117
significantly to rank 151 out of 160 in 2014. training and guidelines for food safety and handling.
3PLs in Kenya are virtually non-existent, forcing most Unemployment in Kenya ranges from 10 to 20
cold chains in Kenya to be vertically integrated and percent, and the majority of Kenyas workforce is
designed to meet the specific needs of individual engaged in the informal economy. In fact, USAID
businesses. These businesses invest in vertical estimates that a little more than 10 percent of
integration, primarily to export commodities; as a employed youth are engaged in the formal economy.
result, food-handling practices for exported products
follow international best practices, including Hazard Most Kenyans make purchases through local markets
Analysis and Critical Control Points (HACCP) and BRC or directly from farmers. These markets tend to sell

lower quality products that have never been A growing middle class that has seen significant wage
refrigerated. Consumers generally cannot afford the raises indicates that there is potential for demand to
higher quality products that would come from an increase over the long term, and recent growth in
established cold chain system. quick service restaurant franchises in the Kenya
market demonstrates a positive development.
Resources:

http://www.export.gov/kenya/
Country Commercial Guide:

http://export.gov/ccg/kenya
African Growth and Opportunity Act (AGOA):

www.agoa.gov
Kenya Customs Department:

www.kra.go.ke
East African Community:

www.eac.int
Industrys Take:
A recent study of the cold chain sector in Kenya showed the
need is great, but consumer demand currently does not
allow for sustainable growth in the near future. The
challenge is how to match the domestic growth in the cold
chain to complement what is being done for exports.
Global Cold Chain Alliance Industry Member

Malaysia
Malaysias Competitiveness Index puts the country near the Overall Rank Upper-Middle
top in all categories. Concerns over transparency and Category
protectionist measures may cast a shadow on its future Ranking
growth potential. 8 1
Malaysia has an estimated GDP of $338 billion. Exports long-term, as the emergence of online shopping for
of goods from the U.S. amounted to $13 billion, but groceries should create additional demand for
U.S. services export data is unavailable. U.S. majority refrigerated trucks and warehouses near major
owned foreign affiliate sales in Malaysia were $51.1 population centers.
billion, and distribution services accounted for more
than $4.6 billion in 2013, though retail data is Figure 25:
119
unavailable. All trade figures are down from their Competitiveness Index Score
th
peak in 2011, but Malaysia is the United States 19 Government/Regulatory 5.2
largest trading partner. Labor Force 5.4
Infrastructure 5.5
Demand 5.3
The population of Malaysia is considered upper middle Industry Interest 3.0
income, with a per capita income of about $24,770 World Economic Forum and Global Cold Chain Alliance
(PPP) per year. Unemployment has dropped to 2 Economic Statistics
120
percent, and inflation was 3.1 percent in 2014. Population 30.3 Million
Cold Storage Capacity N/A
The organized food retail sector accounts for less than Pharmaceutical Sales $2 Billion
half of grocery sales in Malaysia. Food spending is Food Spending per Capita $974
expected to grow more than 8 percent annually to Agribusiness Market $28 Billion
121
reach $45.6 billion by 2020, boosted by rising Agriculture Imports $1.3 Billion
incomes and awareness of the health benefits of fresh Agriculture Exports $4.4 Billion
foods. BMI and Global Cold Chain Alliance
The franchise sector in Malaysia is seeing steady

growth. U.S. franchisors are 39 percent of all foreign Pharmaceutical sales in Malaysia are estimated at $2
operating franchise establishments in Malaysia. The billion in 2015 and are anticipated to increase at a
food and beverage sector is the largest single sector of compound annual growth of 9.5 percent to reach
the franchise industry in Malaysia, comprising 36 around 3.2 billion by 2020. Malaysia represents an
percent of all approved franchises. attractive opportunity for refrigerated logistics service
providers to serve the growing pharmaceutical
E-commerce in Malaysia has grown substantially. industry. The Government of Malaysia has announced
Nearly 70 percent of the population, or more than 21 that it will invest in the biotech sector to boost
122
million people, have adopted e-commerce. It is production capabilities.
anticipated that this growth will continue through at
least 2020 due in part to the governments push to Malaysias agri-business is estimated at $28 billion and
123
promote the use of the Internet to connect to global is expected to rise to $38 billion by 2020. In 2013,
economies. Across Asian nations, there has been a the United States exported $181 million of dairy
trend toward purchasing groceries and food products products to Malaysia, comprising 16 percent of
online. Although these grocery sales are primarily non- imports. Fresh fruits amounted to $77 million,
refrigerated products now, this may represent a great increasing at a rate of 10 percent annually.
opportunity for cold chain service providers in the

th
Malaysia ranked 18 in the World Banks 2016 Ease of MS1500:2400 is Malaysias proprietary halal standard.
Doing Business Rankings, a drop of one place since The certification process is stricter than that of other
2015, when the survey was recalculated. Prior to the countries, including Saudi Arabia. The Department of
methodology changes, Malaysia ranked as high as Islamic Development, or JAKIM, is Malaysias halal
sixth place in 2014. certifying authority.
Figure 26: World Bank Doing Business Ranking The additional requirements necessary for
certification can often increase the cost of production
Country Ranking GDP Per Capita
(2016) (PPP, 2014) for U.S. companies and producers. While many
consumers support halal logistics it requires the entire
Malaysia 18 $13,956
supply chain to adhere to certain principles; if one
Russia 51 $25,635 partner in a supply chain does not adhere to these
China 84 $13,206 principles, the product cannot be labeled as halal. In
Brazil 116 $15,838
the case of Malaysia, a partner in the supply chain that
has been certified halal by a different authority (such
India 130 $5,701 as Saudi Arabia) will not automatically receive
certification by Malaysias halal standards. Several U.S.
nd
Malaysia is ranked 52 out of 124 countries in the producers that have been approved by Saudi halal
World Economic Forums Human Capital index 2015. authorities have not been approved by Malaysia.
participation rate of 57.5 percent. More than 13 Malaysias quality of transport infrastructure is ranked
th
percent of the population is tertiary educated, and the 10 out of 140 countries in the World Economic
country is ranked fourth in ease of finding skilled Forum Global Competitiveness index. With the
124
employees. exception of air transport, all categories of
126
transportation have improved since 2011. It is
Malaysia has a high potential for cold chain sector worth noting that the Government of Malaysia has
growth in the ASEAN region. Quality products and the been a strong supporter of port development. The
potential for trade within the ASEAN region make Malaysian government has been proactive in
Malaysia an attractive market for U.S. service promoting infrastructure, and opportunity exists for
providers. Cold chain logistics companies currently in cold chain services to conduct business in this region.
the market include CCN, IGLO, Kotena National,
Integrated Cold Chain, MAFC, Haisan, MISC, IMC, Researchers have found that lack of regulatory forms
Gerimis, Gold Coin, Vesco, NCB, Bifrost, LTS and to facilitate the logistics industry and lack of
Actionpack. The expected annual increases of 7 information sharing with regard to expansion and
percent in consumer spending and a growing middle development of the logistics industry are constraints
127
class over the next several years represent a good for industry. Companies intending to undertake cold
opportunity for retail growth and imports from the chain logistics and related services are required to:
United States. Incorporate a company under the Companies
Act of 1965
More than 60 percent of Malaysias population is Obtain the appropriate licenses, e.g., for
Muslim, and Malaysia is a forerunner in the halal food operating public/private bonded warehouses
production industry. This can represent an and commercial vehicles and haulage (Class A
opportunity for refrigerated logistics services. Given license).
the demand for halal food products in Malaysia, cold
chain logistics providers interested in entering this th
Malaysia ranked 25 out of 160 countries in the World
market should consider getting certified to appeal to Banks 2014 Logistics Performance Index (LPI). The LPI
all consumer segments. is an indicator of key dimensions of a countrys
logistics performance, including Customs,
The Malaysian government expects the country to Infrastructure, International Shipments, Competence,
become a global hub for halal products with its Tracking and Tracing, and Timeliness. Overall, the
extensive product lines, halal distribution centers and country has remained virtually unchanged in almost
government promoted certification process for halal every category of the Index from 2007, though the
125
production, processing and distribution.

category of Ease of International Shipments has shown employees and instead promote hiring ethnic Malay
128
marked improvement. groups as opposed to other ethnic groups.
In late 2015, Malaysia launched a Logistics Masterplan Malaysia is a party to the recently negotiated Trans-
outlining the following: Pacific Partnership (TPP). Upon ratification, U.S.
Strengthening the institutional and regulatory businesses may find increased potential for growth
framework; and more opportunities to participate in trade. The
Improving trade facilitation mechanisms; agreement will eliminate tariffs, lower service barriers
Developing infrastructure and freight and increase transparency while also increasing
demand; competitiveness by instituting stronger intellectual
Strengthening technological and human property rights protection and establishing
resource development; and enforceable labor and environmental obligations.
Internationalization of logistics services.
The objective of the masterplan is to strengthen the The TPP will promote fairness by ensuring non-
position of Malaysia as the preferred logistics gateway discriminatory treatment of U.S. goods and services,
to Asia. establishing rules for fair competition with State-
owned enterprises and providing the same rights and
Malaysia currently has labor regulations that can be protections for U.S. investors that foreign investors
very challenging to comply with, especially for SMEs. currently enjoy in the United States while protecting
The regulations make it difficult to hire expatriate the inherent right of governments to regulate.
Resources:

http://www.export.gov/malaysia
Country Commercial Guide:

http://export.gov/ccg/malaysia
Halal certification information:

http://www.halal.gov.my/index.php
Industrys Take:
Malaysia is a very attractive market because of economic
growth, quality of products and the potential for trade in the
ASEAN region. There is a need to gather more specific
information about the cold chain industry that is currently
lacking.


Mexico
Mexicos national economic growth rate and proximity to the Overall Rank Upper-Middle
United States make it a key market for export growth. Category
Improvement in government regulation and streamlined Ranking
border and customs programs would accelerate cold chain 13 3
growth in Mexico.
Mexico has an estimated GDP of $1.3 trillion. Exports ranks at the bottom of OECD countries. Over 50
of goods and services from the U.S. amounted to $270 percent of the countrys 51.2 million Internet users are
billion, or 11.6 percent of all U.S. exports. U.S. majority in Mexico City, Guadalajara and Monterrey. There is a
owned foreign affiliate sales in Mexico were $235 cultural distrust of the largely ineffective postal and
billion, and distribution services accounted for more online payment systems; in fact, only 64 percent of e-
129
than $70 billion in 2013. commerce payments are made by credit card. Despite
these issues, e-commerce has grown by 42 percent to
The population of Mexico is considered upper middle reach $9.2 billion in 2013.
class, with a per capita income of about $16,640 (PPP)
per year. Unemployment has held steady at 4.9 Figure 27:
130
percent, and inflation was 4.7 percent in 2014. Competitiveness Index Score
Mexico has a great capacity for growth in the cold Labor Force 4.0
chain industry in the near future. Retailers and Infrastructure 4.4
franchisors in the food sector are focused on Demand/Business Factors 4.5
continuing the nearly 7 percent annual growth in food World Economic Forum and Global Cold Chain Alliance
sales that they have experienced for several years. Economic Statistics
Population 127 Million
While market share of modern supermarkets is low at Cold Storage Capacity 5.0 M/m
3
3.4 percent, Mexico has seen a growth rate of 54 Pharmaceutical Sales $11.2 Billion
percent from 2008 to 2013 and per-capita sales Food Spending $58.5 Billion
131 Food Spending per Capita $460
growth of 4.6 percent. Mexican demand for value- Agribusiness Market $52 Billion
added food imports has grown rapidly in recent years, Agriculture Imports $4.8 Billion
as the introduction of supermarket food distribution Agriculture Exports $1.4 Billion
132
systems has become more prominent. BMI and Global Cold Chain Alliance
Growth in consumer income will lead to increased

demand for food products; franchisors and other food Pharmaceutical sales are expected to reach $14 billion
133
retailers have significant opportunity to utilize a in Mexico by 2020. Cargo theft is a frequent
collaborative model when establishing cold chain concern and a huge entry barrier to the Mexican
infrastructure with Mexican farmers. market, especially with high value products like
pharmaceuticals. In the United States, pharmaceutical
The franchise sector in Mexico is the fifth largest distributors typically operate on low margins, and thus
market in the world and is expanding rapidly, cargo theft may jeopardize the financial health of a
estimated to have grown 11 percent in 2015. U.S. fast distributor and cause distributors to charge higher
food and casual restaurants are common, and the prices to account for the risk.
food and beverage segment is estimated to be nearly Mexico has burdensome customs procedures for
one-third of the total franchise market. express delivery services, and couriers are 100 percent
E-commerce faces numerous challenges in Mexico. liable for all of the contents of their shipments.
The rate of broadband penetration and digital literacy

th
Mexicos $52 billion agri-business is highly dependent Mexico is ranked 58 out of 124 countries in the
on trade with the United States. Most agricultural World Economic Forums Human Capital index 2015.
products in Mexico travel by truck, and the United The population has a median age of 26 and a labor
States is a large consumer of Mexican produce. There participation rate of 61.6 percent. More than 8
may be significant opportunity to expand cold storage percent of the population is tertiary educated, and the
st
facilities in regions that produce agricultural products country is ranked 61 in ease of finding skilled
134 136
exported to the United States. employees.
Figure 28: World Bank Doing Business Ranking Infrastructure is one area that has historically limited
Country Ranking GDP Per Capita Mexican cold chain capabilities. While Mexico has a
(2016) (PPP, 2014) modern highway system that connects main industrial
Mexico 38 $17,107 areas, transportation infrastructure beyond major
cities is often lacking. Mexicos quality of transport
Russia 51 $25,635 th
infrastructure is ranked 36 out of 140 countries in
China 84 $13,206 the World Economic Forum Global Competitiveness
Brazil 116 $15,838 index, with Quality of Railroad Infrastructure the
137
lowest scoring category.
India 130 $5,701
The government is focused on capitalizing on the 44

Mexico is the eighth largest food producer in the international trade agreements it has signed by
world at over $140 billion and comprises some of the modernizing roads and transportation infrastructure
largest international producers. As the Mexican to turn the country into a well-connected, global
economy continues to develop, demand for food logistics center. Current projects include modernizing
products will continue to increase. Furthermore, given and expanding ports and multimodal corridors.
the U.S.-Mexico relationship, demand on the U.S side Estimates attribute as much as 15 percent of total
has a large impact in Mexico. Geographic proximity product costs to transportation and logistics.
has made the United States and Mexico strategic
partners in the food industry. Mexico is the United th
Mexico ranked 50 out of 160 countries in the World
States second largest food supplier, totaling $17.7 Banks 2014 Logistics Performance Index (LPI). The LPI
billion in exports in 2013. is an indicator of key dimensions of a countrys
th
logistics performance, including Customs,
Mexico ranked 38 in the World Banks 2016 Ease of Infrastructure, International Shipments, Competence,
Doing Business, an improvement of four places since Tracking and Tracing, and Timeliness. The country has
2015, when the survey was recalculated. Of particular shown overall improvement trends in every category
note were low rankings in the categories of of the Index since 2007, though the categories of
135
Registering Property and Paying Taxes. Tracking and Tracing and Timeliness have declined
138
since 2010.
Corruption and crime are large concerns for
businesses in Mexico. The country has one of the Cold chain service providers are investing and growing
highest homicide rates in the world, and government throughout the country. The cold chain industry will
institutions are extremely inefficient. Mexico is very likely continue to see growth of nearly 30 percent as
open to trade and, through the NAFTA agreement, has Mexico upgrades its infrastructure. Maintaining a
relatively simple processes for importing and stable government and electricity supply, as well as
exporting, with low tariff rates on most U.S. products. improving transportation, will be essential to sustain
growth in the industry.

Resources: http://www.economia.gob.mx
U.S. Commercial Service Mexico American Chamber of Commerce in Mexico, A.C.

http://www.export.gov/mexico/index.asp http://www.amcham.com.mx
Mexican Embassy in the U.S. U.S.-Mexico Chamber of Commerce

http://www.embassyofmexico.org http://usmcoc.org
Mexican Office of the President Events:

www.presidencia.gob.mx
Expo Carga June 28-30, 2016
Secretariat of Economy (SE) http://www.expo-carga.com
Industrys Take:
Mexico is experiencing a high growth rate with regard to
exports and domestic consumers purchasing ready-to-eat
meals from the organized retail sector. There is one major 3PL
in Mexico; more and more players, however, are entering the
market. It will only be a matter of time before the global
players make their move.


Singapore
Singapores well-established infrastructure, favorable

Overall Rank High-Income
business climate and high per capita income make it a top Category
market for cold chain. Its strategic location is ideal for cross Ranking
docking and distribution networks to service the ASEAN 1
region.
1
Singapore has an estimated GDP of $308 billion, and and freeze it themselves to consume later. Therefore,
U.S. exports to Singapore amounted to nearly $43 significant opportunity exists for firms to sell food
billion in 2015. U.S. majority owned foreign affiliate items that are both fresh and readymade or easy to
sales were $405 billion in the country, and distribution prepare.
services accounted for more than $202 billion in
139
2013.
Figure 29:
The population of Singapore is considered high Competitiveness Index Score
income, with a per capita income of about $80,270 Government/Regulatory 6.0
Labor Force 5.8
(PPP) per year. Unemployment has held steady around
Infrastructure 6.3
3 percent, and inflation was low, around .2 percent, in Demand 5.1
140
2014. Industry Interest 5.0
World Economic Forum and Global Cold Chain Alliance
Singapores retail food sector is one of the most Economic Statistics
advanced in the world. Food spending is expected to Population 5.6 Million
141 Cold Storage Capacity N/A
reach nearly $9 billion by 2020. The mature nature Pharmaceutical Sales $793 Million
of Singapores mass grocery retail sector is evidenced Food Spending $6.8 Billion
by intense competition, which ensures that retailers Food Spending per Capita $1,205
must be highly innovative to compete. Agribusiness Market N/A
Agriculture Imports $1.2 Billion
Singapore has one of the highest per capita incomes in Agriculture Exports $1.1 Billion
the world, and more than 72 percent of the
population earns over $50,000 annually, presenting a
high level of consumer purchasing power. Therefore, Wet markets still represent a major point of sale for
catering to consumer preferences, rather than fresh grocery products. Wet markets are reminiscent
competing on price alone, presents an opportunity for of traditional markets and serve as destinations that
U.S. exporters. sell fresh produce, meat and fish products. Older
consumers tend to prefer shopping in these outlets.
Singaporean customers often value the ease of
shopping in convenience stores or online. Packaged The franchise sector in Singapore is well-developed
foods are an industry that appeals to this consumer and growing. There are more than 30,000 franchises in
segment, as these products are easier and less time- the country, and U.S. concepts are very well received.
consuming to cook. In the face of rising obesity rates, Many businesses use Singapore as a distribution
government initiatives and consumer choices to eat center and a showcase for concepts to the Asia region.
healthier have created demand for healthy processed With more than 15 million visitors each year, it is
foods. common for visitors to inquire into bringing a concept
seen in Singapore to their home country. Singapores
There is also strong demand for fresh products in well-developed infrastructure and strategic location
Singapore; even busy professionals who cannot make provide convenient access to the Asia region.
treks to the markets frequently will buy fresh produce

E-commerce in Singapore is estimated at $3.3 billion in building is the transit point for 90 percent of the
2015 and is expected to reach as high as $33 billion by perishable goods that pass through the airport. The
2020. The e-commerce site EBay estimates that e- facility has 18 temperature zones that range from -28
144
commerce accounts for as much as 5 percent of all C to 18 C. A recent 1,400 square meter facility run
retail sales in Singapore. by dnata expanded the total airport capacity to 75,000
145
tons annually.
E-commerce and direct to consumer deliveries of
temperature-sensitive products will find excellent Express delivery is greatly aided by the advanced
opportunities in this market due to relatively lower supply chain infrastructure in Singapore. Changi
overhead and real estate costs of operation and the Airport is served by more than 100 airlines with flights
ability to cater to consumers that do not have time tso to 80 countries and nearly 300 weekly freighter flights.
shop at a retail store. This may also represent a great The airport sets some of the highest standards for
opportunity for cold chain service providers, as the cargo and has goals of clearing 90 percent of cargo
growth of online shopping for food and groceries shipments through customs within 13 minutes.
should create additional demand for refrigerated
deliveries and warehouses near major population Due to land constraints, as much as 90 percent of food
centers. consumed must be imported. Recent trends have
shown Singaporean retailers sourcing more agriculture
Pharmaceutical sales in Singapore are estimated at products beyond the region to meet the 5.5 percent
$800 million and are anticipated to increase to around annual increase demand of the local markets. Products
$1 billion by 2020. Singapore represents an attractive range from generic to high-end organic foods. It is
opportunity for refrigerated logistics service providers estimated that, this year, Singapores dairy market will
to serve the growing pharmaceutical industry. be around $1 billion. The beef market will be $415
million, and the fresh fruits and vegetables market is
Singapores quality of transport infrastructure is anticipated to be about $1billion.
ranked third out of 140 countries in the World
Economic Forum Global Competitiveness index. All The Agro-Food and Veterinary Authority of Singapore
aspects of the infrastructure from road to rail, ports (AVA) worked with the food industry and SPRING
and air are all consistently rated in the top ten in the Singapore to launch a new Singapore Standard (SS) for
142
world. the cold chain management of vegetables in 2013.
Named SS 585: 2013, the new standard covers major
th
Singapore ranked 5 out of 160 countries in World supply links starting from the farm to the packing
Banks 2014 Logistics Performance Index (LPI). The LPI house, transportation, distribution, wholesale center
is an indicator of key dimensions of a countrys and retail. SPRING Singapore is now promoting
logistics performance, including Customs, international recognition and adoption of these
Infrastructure, International Shipments, Competence, standards from the International Standards
146
Tracking and Tracing, and Timeliness. While the Organization (ISO).
categories of Infrastructure and Customs have shown
slight improvements since 2007, almost every other About 15 percent of Singapores resident population is
143
category has declined. Muslim, and as such, there is a relatively strong
demand for halal food products in Singapore. Cold
Singapore has a highly developed and sophisticated chain logistics providers interested in entering this
cold chain distribution system. Cold chain operators market may want to consider halal certification to
are looking at further developing their Singapore appeal to all consumer segments.
facilities to create a cross-docking location to more
efficiently move product throughout the ASEAN Singapore has consistently ranked at the top of
region, which would help U.S. cold chain firms business friendly markets and is ranked first in the
improve their operating efficiency and market World Banks 2016 Ease of Doing Business Rankings.
prospects in the region. One risk, however, that should be monitored arises
when purchasing property. Because land is so scarce in
Singapore is becoming a hub for perishable products Singapore, numerous bidders often drive the price of
moving from one part of the world to another. At land to above its real value, making it costly to develop
Coolport@Changi, a $16 million 8,000 sq. meter sites and facilities needed for cold chain operations.

Singapore also has one of the most expensive labor participate in trade. The agreement will eliminate
markets in the world. This may be a barrier to entry tariffs, lower service barriers and increase
for SMEs looking to expand into this market. transparency while also increasing competitiveness by
instituting stronger intellectual property rights
th
Singapore is ranked 24 out of 124 countries in the protection and establishing enforceable labor and
World Economic Forums Human Capital Index 2015. environmental obligations.
participation rate of 67.8 percent. More than 21 The TPP will promote fairness by ensuring non-
percent of the population is tertiary educated, and the discriminatory treatment of U.S. goods and services,
th
country is ranked 20 in ease of finding skilled establishing rules for fair competition with State-
147
employees. owned enterprises and providing the same rights and
protections for U.S. investors that foreign investors
Figure 30: World Bank Doing Business Ranking currently enjoy in the United States while protecting
Country Ranking GDP Per Capita the inherent right of governments to regulate.
(2016) (PPP, 2014)
Singapore 1 $82,763 Singaporeans also pride themselves on being a 'foodie'
country, and 60 percent of Singaporeans eat out at
Russia 51 $25,635
least four times a week, according to the 2010
China 84 $13,206 National Nutrition Survey. "Eating out" includes
Brazil 116 $15,838 hawker centers, food courts, coffee shop stalls,
restaurants, coffee houses and workplace canteens as
India 130 $5,701
usual meal venues. A recent MasterCard survey on
consumer dining habits showed Singaporeans to be
The United States has a free trade agreement with one of the top spenders for dining out across the
Singapore that has brought tariffs on most products wider Asia Pacific. There is also a recognizable shift
down to zero. Singapore is also a party to the recently toward fine dining, new cuisines and differentiated
negotiated Trans-Pacific Partnership (TPP). Upon dining experiences among Singaporeans, creating
ratification, U.S. businesses may find increased increased demands for new perishable food items.
potential for growth and more opportunities to
Resources:
Restaurant Association of Singapore (RAS)
U.S. Commercial Service: www.ras.org.sg
http://www.export.gov/singapore/
Singapore Hotel Association (SHA)
Country Commercial Guide: www.sha.org.sg
http://export.gov/ccg/singapore090882.asp
Industrys Take:
Singapore is a highly developed country with at
sophisticated distribution system. There is opportunity to
make Singapore a staging station for cross-docking facilities
to move product more efficiently.


Vietnam
Strong foreign infrastructure and logistics activity signal that Overall Rank Lower-
Vietnam should be a growth market, though government Middle
regulatory concerns keep it on the lower end of this years Top Category
Markets rankings. 17 Ranking
3
Vietnam has an estimated GDP of $186 billion, and Across Asian nations, there has been a trend toward
exports of goods from the U.S. amounted to $5.7 purchasing groceries and food products online. This
billion in 2015. U.S. majority owned foreign affiliate may represent a great opportunity for cold chain
sales in Vietnam were $3.2 billion in 2013, an service providers, as the emergence of online
increase of 6.8 percent, but distribution services shopping for groceries should create additional
148
data is not available for the country. demand for refrigerated delivery and warehouses
near major population centers.
The population of Vietnam is considered lower
middle income, with a per capita income of about Figure 31:
$5,350 (PPP) per year. Unemployment is Competitiveness Index Score
approximately 2.3 percent, and inflation was 3.7 Government/Regulatory 3.8
149
percent in 2014. Labor Force 3.9
Infrastructure 3.9
Demand 4.2
Vietnams organized retail sector is at the beginning
stages of growth, and most retailers and cold chain World Economic Forum and Global Cold Chain Alliance
operators are continuing to monitor the Economic Statistics
development of the market. Food spending is Population 93.4 Million
expected to increase on average by 10.5 percent Cold Storage Capacity N/A
150 Pharmaceutical Sales $4.2 Billion
annually to reach over $31 billion by 2020. There
is a traditional preference to eat fresh products, Food Spending per Capita $204
leaving the frozen food segment fragmented. The Agribusiness Market $43.3 Billion
entry of major retailers with supermarket models Agriculture Imports $5.0 Billion
combined with increasing exports of farming and Agriculture Exports $5.2 Billion
seafood products are expected to drive demand for BMI and Global Cold Chain Alliance
cold chain services.
The estimated $46 billion franchise sector in Pharmaceutical sales in Vietnam are estimated at
Vietnam is very popular and well suited for the $4.2 billion and are anticipated to increase at a
developing economy. American food and beverage compound annual growth rate of over 12.5 percent
152
franchise brands have become big players in the to reach around $7.6 billion by 2020. Vietnam
market, as Vietnamese consumers associate western represents an attractive opportunity for refrigerated
brands with quality and lifestyle. logistics service providers to serve the growing
pharmaceutical industry.
With internet penetration at more than 45 percent,
e-commerce in Vietnam has grown substantially over Trade routes through Vietnam have increased
the last five years to reach nearly $4.2 billion in 2015 airfreight imports from the United States by an
153
and accounts for 2.1 percent of all retail sales, average of 19.2 percent since 2005, providing
according to the Vietnam E-Commerce and opportunities for express delivery services within the
country.
Information Technology Agency. The average Vietnams agribusiness market is expected to grow
151 154
shopper spent $165 online. to $51 billion by 2020. It is estimated that this

th
year, Singapores dairy imports from the United Vietnam is ranked 59 out of 124 countries in the
States will be around $1 billion, though most of that World Economic Forums Human Capital index 2015.
will be in dry powder form, which does not require The population has a median age of 29 and a labor
refrigeration. The poultry market sources its imports participation rate of 77.5 percent. Less than 9
primarily from Brazil and the United States and percent of the population is tertiary educated, and
th
expects to import 75 metric tons of U.S. poultry this the country is ranked 99 in ease of finding skilled
156
year. The Vietnamese market will import 20,000 employees.
metric tons of beef and 3,000 metric tons of pork
from the United States this year. The labor market can be challenging in Vietnam.
Managers often have a lack of incentive to improve
th
Vietnam ranked 90 in the World Banks 2016 Ease company processes. This has led to a productivity
of Doing Business, improving by three places since challenge in Vietnam. Companies wishing to expand
155
2015, when the survey was recalculated. to Vietnam should invest resources in training
quality management that can identify areas for
improvement and take action.
Country Ranking GDP Per Capita With over 54.5 million people, Vietnam has a large,
(2016) (PPP, 2014) literate labor force. The minimum wage ranges from
Vietnam 90 $5,629 $110 to $160 a month with urban districts subject to
Russia 51 $25,635 higher wages.
China 84 $13,206
The Vietnamese government has taken a proactive
Brazil 116 $15,838 step to promote cold chain infrastructure by
India 130 $5,701 introducing financial incentives to attract foreign
investment. Vietnams government has also made it
Vietnam still remains a relatively risky place to do a policy initiative to promote the rapid growth of
business, as laws and regulations are not always infrastructure and attract many of the worlds
transparent. Furthermore, there are restrictions on largest infrastructure companies; as a result, many
157
forms of foreign direct investment that deter some 3PLs have benefited.
retailers from entering this market. th
Vietnam ranked 48 out of 160 countries in World
Vietnam is a party to the recently negotiated Trans- Banks 2014 Logistics Performance Index (LPI). The
Pacific Partnership (TPP). Upon ratification, U.S. LPI is an indicator of key dimensions of a countrys
businesses may find increased potential for growth logistics performance, including Customs,
and more opportunities to participate in trade. The Infrastructure, International Shipments,
agreement will eliminate tariffs, lower service Competence, Tracking and Tracing, and Timeliness.
barriers and increase transparency while also Overall, the country has shown improvement in
increasing competitiveness by instituting stronger almost every category of the Index since 2007,
intellectual property rights protection and though the category of Customs has slightly
158
establishing enforceable labor and environmental declined.
obligations.
Foreign logistics firms have a strong presence in
The TPP will promote fairness by ensuring non- Vietnam, capturing 80 percent of market share
discriminatory treatment of U.S. goods and services, worth $48 billion. While ocean shipping services are
establishing rules for fair competition with State- dominated by joint ventures, domestic firms mostly
owned enterprises and providing the same rights handle road-shipping services. Cold chain has been
and protections for U.S. investors that foreign identified as one of the key growth opportunities for
investors currently enjoy in the United States while foreign investors in Vietnam, an area where there
protecting the inherent right of governments to has been significant international investment.
regulate.
Vietnams quality of transport infrastructure is
th
ranked 67 out of 140 countries in the World
Economic Forum Global Competitiveness index.

Every category of transportation infrastructure has Vietnams agricultural and seafood exports, creating
improved since 2011, though the quality of roads additional demand for refrigerated services.
and the overall quality of the transport
159
infrastructure is very low. Preferred Freezer, a U.S.-based refrigerated
warehousing firm, operates a large cold storage
The refrigerated products and services industry facility in Vietnam that is one of the most modern
would be wise to monitor the state of bulk rail refrigerated warehouses in the country and utilizes
shipping in Vietnam to determine the market state of the art automation technology as well as
opportunity for both refrigerated rail cars and advanced inventory tracking methods.
refrigerated warehouses at intermodal links and
trans-shipment hubs. Furthermore, according to Resources:
Business Monitor International, the poor state of
domestic infrastructure capabilities provides strong U.S. Commercial Service:
160
demand for foreign construction companies. http://www.export.gov/vietnam/
While retailers have expanded to Vietnam in recent Country Commercial Guide:

years, distribution networks remain http://export.gov/ccg/vietnam090915.asp
underdeveloped. Vietnam has had traditionally low
investment in the rail industry, leaving cost-effective American Chamber of Commerce (AmCham) HCMC:
bulk rail freight underutilized. There have been http://www.amchamvietnam.com/
several plans to expand rail capacity, and increased
Chinese investment may promote Vietnams rail American Chamber of Commerce- Hanoi:
sector. Reduced transport costs can further promote http://www.amchamhanoi.com
Industrys Take:
The cold storage market in Vietnam is over-built for current
operations. The organized retail sector is just starting to take
off, and thus, most players are keeping an eye on the
situation. There is potential for companies with a longer-term
approach.


Addendum: Resources for U.S. Exporters
The U.S. government has numerous resources available to help U.S. exporters: from additional market
research to guides to export financing, to overseas trade missions, to staff around the country and the
world. A few key resources are highlighted below. For additional information about services from the
International Trade Administration (ITA), please visit www.export.gov.
Country Commercial Guides Trade missions include among other activities: one-
http://export.gov/ccg/ on-one meetings with foreign industry executives
Written by U.S. Embassy trade experts worldwide, and government officials that are pre-screened to
the Country Commercial Guides provide an excellent match specific business objectives.
starting point for what you need to know about
exporting and doing business in a foreign market. Certified Trade Fairs
The reports include sections addressing: market http://www.export.gov/eac/show_short_trade_eve
overview, challenges, opportunities and entry nts.asp?CountryName=null&StateName=null&Indust
strategies; political environment; selling U.S. ryName=null&TypeName=International%20Trade%2
products and services; trade regulations, customs 0Fair&StartDate=null&EndDate=null
and standards; and much more. The Department of Commerce's trade fair
certification program endorses overseas trade shows
Basic Guide to Exporting that are reliable venues and good markets for U.S.
http://export.gov/basicguide/ firms to sell their products and services abroad.
A Basic Guide to Exporting addresses virtually every These shows serve as a vital access vehicle for U.S.
issue a company looking to export might face. firms to enter and expand to foreign markets. The
Numerous sections, charts, lists and definitions certified show/U.S. pavilion ensures a high-quality,
throughout the books 19 chapters provide in-depth multi-faceted opportunity for American companies
information and solid advice about the key activities to successfully market overseas. Among other
and issues relevant to any prospective exporter. benefits, certified trade fairs provide U.S. exhibitors
with help facilitating contacts, market information,
Trade Finance Guide: A Quick Reference for U.S. counseling and other services to enhance their
Exporters marketing efforts.
http://www.export.gov/tradefinanceguide/index.asp
Trade Finance Guide: A Quick Reference for U.S. International Buyer Program
Exporters is designed to help U.S. companies, http://export.gov/ibp/
especially small and medium-sized enterprises, learn The International Buyer Program (IBP) brings
the basics of trade finance so that they can turn their thousands of international buyers to the United
export opportunities into actual sales and achieve States for business-to-business matchmaking with
the ultimate goal of getting paidespecially on U.S. firms exhibiting at major industry trade shows.
timefor those sales. Concise, two-page chapters Every year, the International Buyer Program results
offer the basics of numerous financing techniques in millions of dollars in new business for U.S.
from open accounts to forfaiting, to government companies by bringing pre-screened international
assisted foreign-buyer financing. buyers, representatives and distributors to selected
shows. U.S. country and industry experts are on site
Trade Missions at IBP shows to provide hands-on export counseling,
http://www.export.gov/trademissions/ market analysis and matchmaking services. Each IBP
Department of Commerce trade missions are show also has an International Business Center,
overseas programs for U.S. firms that wish to explore where U.S. companies can meet privately with
and pursue export opportunities by meeting directly prospective international buyers, prospective sales
with potential clients in their markets. representatives and business partners and obtain
assistance from experienced ITA staff.

The Advocacy Center
http://www.export.gov/advocacy/
The Advocacy Center coordinates U.S. government
interagency advocacy efforts on behalf of U.S.
exporters bidding on public-sector contracts with
overseas governments and government agencies.
The Advocacy Center helps to ensure that sales of
U.S. products and services have the best possible
chance competing abroad. Advocacy assistance is
wide and varied but often involves companies that
want the U.S. government to communicate a
message to foreign governments or government-
owned corporations on behalf of their commercial
interest, typically in a competitive bid contest.
U.S. Commercial Service

http://www.export.gov/usoffices/index.asp
With offices throughout the United States and in
U.S. Embassies and consulates in nearly 80 countries,
the U.S. Commercial Service utilizes its global
network of trade professionals to connect U.S.
companies with international buyers worldwide.
Whether looking to make their first export sale or
expand to additional international markets,
companies will find the expertise they need to tap
into lucrative opportunities and increase their
bottom line. This includes trade counseling,
actionable market intelligence, business
matchmaking, and commercial diplomacy.

Appendix 1: Methodology
Key Market Assessment Requirements
U.S. businesses engaged in international cold chain activity assess markets against specific criteria when selecting
locations for expansion. The four primary criteria, according to industry sources, are the governmental regulatory
environment, whether there is a trainable skilled labor force, the infrastructure environment and the potential
demand within the country or region.
Government/Regulatory
The first aspect that U.S. industries consider when looking at a new market is the regulatory environment of the
country. In particular, U.S. industry looks for a stable government with transparent policymaking plus technical
regulations, standards and procedures for assessment of conformity that are non-discriminatory and based on
relevant, internationally recognized best practices. Legal frameworks that allow companies to resolve legal
disputes and challenge regulations are essential when identifying potential export markets.
Labor Force
Another important aspect for market decision-making is the quality and skill level of the potential work force in the
market. Industry must have the capacity to train and develop the talent and the management required to run an
efficient supply chain operation.
Infrastructure
The infrastructure within a country is another key aspect in a companys selection of export markets. Electricity
and IT infrastructure must be sufficient to support logistics operations. Transportation infrastructure must be
capable of supporting the reliable distribution of a product within the country or region without excessive delays.
The International Association of Refrigerated Warehouses has noted a strong correlation of cold storage capacity
161
to a countrys transportation score in the World Economic Forums Transport Index.
Demand
Finally, the demand within a country must be considered. The potential size of the market will depend on
consumer needs, the number of consumers in the country, products produced and demanded by the market as
well as the level of development within the market.
Methodology
When determining which global markets policy-makers should target for export promotion and trade policy
activities, it is important to account for the primary decision-making criteria of U.S. businesses engaged in the cold
chain market. In this report and the case studies that follow, the criteria for evaluating markets was based on the
four specific aspects of Government/Regulations, Labor Force, Infrastructure and Demand. These are reflected in
the reports scorecard and country case studies.
The scorecard for this report is derived from the Global Competitiveness Index 2015-2016 created by the World
162
Economic Forum for their Global Competitiveness Report. By using this competitiveness index, a cross-country
analysis based on these market evaluation criteria is possible. Particular aspects of the index were used to
represent the primary criteria that industry indicated as a priority in market selection.

The scorecard assigns a numeric value to each of the criteria on a scale of 1 to 7, with 7 being the highest score in a
particular category. The scorecard is color-coded, using red, yellow and green to indicate comparative values of
countries in the same income level. It is important to note that the colors yellow and red do not necessarily
represent a poor environment but rather represent the lower 40 percent of scores in the given income level.
New for 2016, a separate category has been added to assess industrys interest in each of the countries. The Global
Cold China Alliance, which represents all major industries engaged in temperature-controlled logistics, provided
ratings on a scale of 1 to 7, with 7 being the highest score based on their members expressed interest. This
industry interest category effectively contributes 20 percent to the total country score.
The case studies in this report analyze selected potential markets and assess important competitiveness factors.
These case studies are intended to aid ITA in promoting the development of efficient international cold chains to
improve U.S. export opportunities. Inclusion or omission of countries in the case study section does not necessarily
indicate that these are higher or lower ranked countries of opportunity but rather that government or private
sector representatives have expressed interest in learning more about these markets to ITAs Supply Chain Team.

Appendix 2: Scorecards
Cold Chain Competitiveness Scorecard: High Income Economies 163
Criteria (1 - 7 Best) U.S. Australia Canada Germany Japan Netherlands Poland Singapore UAE U.K.
Government/Regulatory 4.8 4.9 5.1 5.1 5.1 5.4 3.9 6.0 5.6 5.3
Ethics and corruption 4.5 5.3 5.3 5.1 5.5 5.7 3.7 6.2 6.2 5.4
Intellectual Property Protection 5.8 5.8 5.8 5.7 6.1 6.0 4.0 6.2 5.5 6.0
Legal framework- settling disputes 4.9 4.9 5.2 5.3 5.4 5.5 3.7 6.2 5.2 5.7
Legal framework- challenging regulations 4.8 4.7 5.0 5.2 4.6 5.5 3.1 5.2 4.7 5.3
Transparency of government policymaking 5.0 4.9 5.3 5.1 5.5 5.5 3.6 6.2 5.4 5.5
Foreign competition 4.5 4.8 4.9 5.0 4.6 5.8 5.0 6.4 5.9 5.3
Security 4.9 5.7 5.6 5.3 5.5 5.6 5.1 6.2 6.5 5.4
Burden of government regulation 3.6 3.3 3.8 3.9 3.6 3.9 2.8 5.4 5.2 3.9
Labor Force 5.6 4.5 5.2 4.6 4.7 4.8 3.9 5.8 5.6 5.5
Flexibility 5.4 4.2 5.2 4.2 5.2 4.7 4.3 6.1 6.0 5.4
Flexibility of wage determination 5.7 4.1 5.4 3.6 6.0 3.7 5.6 6.0 6.1 5.8
Hiring and firing practices 5.0 2.9 4.5 3.4 3.0 3.6 3.5 5.4 5.1 4.8
Country capacity to attract talent 5.8 4.8 5.3 4.7 3.3 5.0 2.4 6.0 5.9 5.9
Country capacity to retain talent 5.7 4.5 4.9 4.9 4.2 5.1 2.7 5.4 5.5 5.3
Reliance on professional management 5.9 5.8 5.9 5.7 5.6 6.1 4.3 6.1 5.5 5.9
On-the-job training 5.4 5.2 5.1 5.5 5.4 5.7 4.4 5.6 5.2 5.3
Infrastructure 5.8 5.6 5.7 6.0 6.0 6.1 4.4 6.3 6.2 5.9
Electricity and telephony infrastructure 5.8 6.2 5.9 6.3 6.3 6.3 5.1 6.5 5.9 6.4
Transport infrastructure 5.9 5.2 5.6 6.0 6.1 6.3 3.5 6.5 6.6 5.6
Technological adoption 5.8 5.4 5.5 5.6 5.7 5.7 4.5 6.0 6.1 5.8
Demand / Business Factors 5.4 4.7 5.0 5.4 5.6 5.3 4.5 5.1 5.4 5.3
Domestic market size 7.0 5.1 5.3 5.9 6.1 4.8 5.0 4.4 4.6 5.7
Domestic competition 5.2 4.9 5.3 5.0 5.0 5.5 4.7 5.8 5.8 5.3
Foreign competition 4.5 4.8 4.9 5.0 4.6 5.8 5.0 6.4 5.9 5.3
Control of international distribution 5.3 4.1 4.6 5.5 5.5 5.0 3.6 4.4 5.3 5.0
Local supplier quantity 5.4 4.7 5.1 5.8 6.2 5.2 5.1 4.5 5.4 5.6
Local supplier quality 5.5 5.3 5.4 6.0 6.2 5.6 4.9 5.1 5.3 5.4
State of cluster development 5.5 4.1 4.5 5.5 5.3 5.2 3.6 5.1 5.5 5.3
Quality of Demand Conditions 5.0 4.6 4.9 4.7 5.7 4.9 4.1 5.2 5.1 5.0
Industry Interest 4.0 4.0 4.0 4.0 4.0 4.0 5.0 5.0 5.0 5.0
Total Score 5.1 4.7 5.0 5.0 5.1 5.1 4.3 5.6 5.6 5.4
High-income economies tend to have well-developed distribution services, including cold chain systems. These
systems serve retail and franchise markets that are equally well-developed. Most opportunities for cold chain
service providers in these markets will be in acquisitions and consolidation of the services to improve efficiency in
the systems. U.S. cold chain providers and 3PLs that utilize the latest technologies and management practices to
solve unique challenges in specific markets are the most likely candidates to expand in these markets.

Cold Chain Competiveness Scorecard: Upper Middle Income Economies164
Criteria (1 - 7 Best) Brazil China Colombia Malaysia Mexico S. Africa Thailand

Government/Regulatory 3.0 4.1 3.2 5.2 3.4 4.4 3.7
Ethics and corruption 2.1 4.0 2.5 4.8 2.5 3.2 2.9
Intellectual Property Protection 3.7 4.0 3.7 5.4 3.8 5.4 3.2
Legal framework - settling disputes 2.8 4.0 3.1 5.3 3.1 5.3 3.9
Legal framework - challenging regulations 2.9 3.5 3.0 5.0 3.0 5.0 3.7
Transparency of government policymaking 3.1 4.5 3.9 5.3 4.1 4.5 3.8
Foreign competition 3.2 3.9 3.9 5.5 4.4 4.5 4.8
Security 4.2 4.7 3.1 5.2 3.2 4.1 3.8
Burden of government regulation 1.7 4.0 2.6 5.0 2.8 2.9 3.3
Labor Force 3.6 4.4 4.0 5.4 4.0 3.7 4.2
Flexibility 3.6 4.4 4.5 5.2 4.3 3.7 4.1
Flexibility of wage determination 4.0 5.0 5.3 5.5 5.1 2.7 4.3
Hiring and firing practices 2.3 4.6 3.6 5.3 3.5 2.2 4.5
Country capacity to attract talent 3.0 4.2 3.2 5.3 3.4 3.8 3.8
Country capacity to retain talent 3.7 4.2 3.3 5.3 3.5 3.6 4.0
Reliance on professional management 4.4 4.4 4.3 5.7 4.2 5.4 4.5
On-the-job training 3.9 4.2 3.8 5.5 4.1 4.7 4.2
Infrastructure 4.2 4.7 4.0 5.5 4.4 4.4 4.7
Electricity and telephony infrastructure 4.4 4.4 4.3 5.2 3.9 3.5 4.7
Transport infrastructure 3.5 5.1 3.2 5.8 4.5 4.7 4.6
Technological adoption 4.6 4.5 4.5 5.6 4.9 5.1 4.8
Demand / Business Factors 4.2 4.8 4.2 5.3 4.5 4.5 4.6
Domestic market size 5.8 7.0 4.7 4.8 5.5 4.8 5.0
Domestic competition 3.7 4.5 3.9 5.5 4.2 4.9 4.6
Foreign competition 3.2 3.9 3.9 5.5 4.4 4.5 4.8
Control of international distribution 3.8 4.3 3.8 5.2 4.0 4.3 4.1
Local supplier quantity 4.7 5.2 4.9 5.4 4.6 4.6 4.8
Local supplier quality 4.3 4.3 4.7 5.3 4.7 4.8 4.4
State of cluster development 4.2 4.5 3.7 5.3 4.2 4.2 4.1
Quality of Demand Conditions 3.9 4.4 4.1 5.3 4.1 4.2 4.8
Industry Interest 4.0 5.0 3.0 3.0 5.0 4.0 4.0
Total Score 3.8 4.6 3.7 4.9 4.3 4.2 4.2
Upper middle-income markets tend to be prime for cold chain expansion and often have some established retail
and franchise industries that already utilize cols chain systems. These systems may vary from rudimentary to
advanced. There are likely many opportunities for a variety of cold chain service providers to enter and expand in
these markets, though the government/regulatory environment may hinder growth opportunities in many
countries.

Cold Chain Competiveness Scorecard: Lower Middle Income Economies165
Criteria (1 - 7 Best) India Indonesia Kenya Vietnam

Government/Regulatory 4.1 4.0 3.7 3.8
Ethics and corruption 4.1 3.7 3.0 3.1
Intellectual Property Protection 4.2 4.3 3.7 3.6
Legal framework - settling disputes 4.2 3.9 4.0 3.7
Legal framework - challenging regulations 4.1 3.9 4.0 3.4
Transparency of government policymaking 4.2 4.1 4.2 3.8
Foreign competition 3.9 4.1 4.1 4.7
Security 3.9 4.1 3.1 4.5
Burden of government regulation 4.0 3.8 3.7 3.2
Labor Force 4.1 4.2 4.3 3.9
Flexibility 4.5 3.6 4.8 4.4
Flexibility of wage determination 4.0 4.3 5.2 5.0
Hiring and firing practices 4.4 4.3 4.1 4.2
Country capacity to attract talent 3.8 4.1 3.7 3.3
Country capacity to retain talent 3.9 4.1 3.5 3.2
Reliance on professional management 3.9 4.7 4.4 3.6
On-the-job training 4.2 4.5 4.4 3.8
Infrastructure 3.8 4.4 3.7 3.9
Electricity and telephony infrastructure 2.8 4.0 2.8 4.1
Transport infrastructure 4.6 4.4 3.6 3.6
Technological adoption 4.1 4.8 4.8 4.0
Demand / Business Factors 4.5 4.5 4.2 4.2
Domestic market size 6.4 5.7 3.7 4.5
Domestic competition 4.2 4.5 4.5 4.4
Foreign competition 3.9 4.1 4.1 4.7
Control of international distribution 4.0 4.2 3.8 3.7
Local supplier quantity 4.6 4.7 5.1 4.5
Local supplier quality 4.3 4.2 4.4 3.8
State of cluster development 4.4 4.4 4.1 3.8
Quality of Demand Conditions 4.1 4.4 3.9 3.8
Industry Interest 4.0 3.0 3.0 4.0
Total Score 4.1 4.0 3.8 3.9
Lower-middle income economies are usually in the burgeoning stages of retail and cold chain development. These
economies often need extensive investment for efficient systems. With less developed retail markets, it may be
difficult for many cold chain service providers to find profit opportunities in the local market; therefore, exporting
to other consumers markets usually offers the greatest opportunities. The growth of these markets will often hinge
on the ease of doing business and trade; government policies and infrastructure development are often the largest
impediments to business and to the growth of these economies.

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8
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34
The Global Cold Chain Alliance; New Refrigeration Technology Could Improve Energy Efficiency and Safety
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35
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50
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72
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What industries are highlighted as strategic partners?

2016 Top Markets Report

Cold Supply Chain

A Market Assessment Tool for U.S. Exporters

For more information, visit

I&A is part of the International Trade Administration, whose mission is to

Overview and Key Findings ................................................................................................................5

Country Case Studies

Addendum: Resources for U.S. Exporters ................................................................................... 61

2016 ITA Cold Chain Top Markets Report | 1

2016 ITA Cold Chain Top Markets Report | 2

2016 ITA Cold Chain Top Markets Report | 3

2016 ITA Cold Chain Top Markets Report | 4

1. Singapore 5. Japan 9. Australia 13. Mexico 17. Vietnam

2016 ITA Cold Chain Top Markets Report | 5

2016 ITA Cold Chain Top Markets Report | 6

2016 ITA Cold Chain Top Markets Report | 7

2016 ITA Cold Chain Top Markets Report | 8

Cold chain systems are critical to the operations of U.S.

2016 ITA Cold Chain Top Markets Report | 9

2016 ITA Cold Chain Top Markets Report | 10

2016 ITA Cold Chain Top Markets Report | 11

2016 ITA Cold Chain Top Markets Report | 12

2016 ITA Cold Chain Top Markets Report | 13

As these solutions are developed and introduced, they

2016 ITA Cold Chain Top Markets Report | 14

2016 ITA Cold Chain Top Markets Report | 15

Cold chain systems also allow U.S. pharmaceuticals,

2016 ITA Cold Chain Top Markets Report | 16

2016 ITA Cold Chain Top Markets Report | 17

2016 ITA Cold Chain Top Markets Report | 18

Australia has an estimated GDP of $1.46 trillion. U.S.

The Australian franchise industry is well-established

2016 ITA Cold Chain Top Markets Report | 19

U.S. Commercial Service:

Australia Country Commercial Guide:

2016 ITA Cold Chain Top Markets Report | 20

Brazils culture, proximity to the United States and level of

Modern supermarkets have a market share of 50.7

2016 ITA Cold Chain Top Markets Report | 21

2016 ITA Cold Chain Top Markets Report | 22

Resources: Trade and Investment Guide (Brazil Export):

2016 ITA Cold Chain Top Markets Report | 23

2016 ITA Cold Chain Top Markets Report | 24

manufacturing and construction led economy to a

2016 ITA Cold Chain Top Markets Report | 25

2016 ITA Cold Chain Top Markets Report | 26

2016 ITA Cold Chain Top Markets Report | 27

2016 ITA Cold Chain Top Markets Report | 28

Overall Rank Lower-

With an estimated GDP of $2 trillion, India is expected Figure 17:

investment that is required to set up efficient

2016 ITA Cold Chain Top Markets Report | 29

2016 ITA Cold Chain Top Markets Report | 30

2016 ITA Cold Chain Top Markets Report | 31

2016 ITA Cold Chain Top Markets Report | 32