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Cold Chain Market could be the answer to Africa’s food insecurity


  • The Middle East and Africa cold chain market will expand by 7.4% to $35.1 Billion by 2028.
  • Over one third of food from Africa is lost to spoilage or wastage partly due to poor storage capacity.
  • Studies show that leading cause of food wastage is spoilage due to lack of cold storage systems.

The demand for cold storage supply chain products in Africa is rapidly growing. The segment has been tipped as critical in solving the food insecurity crisis ravaging the continent of 1.4 billion people. Rise of cold storage systems is also attributable to growing demand from consumers as Africa’s urbanization and modernization intensifies.

According to Market Data Forecast, the size of the Middle East and Africa (MEA) cold chain market will expand at a CAGR of 7.4 per cent to $35.1 billion by 2028 from 23.8B of 2022. The bellwether for this trajectory has been the rapid emergence of cold chain technology startups across the continent that a sealing a yawning gap.

Africa’s cold chain ecosystem

In light of this, the Nigerian start-up Figorr recently secured $1.5 million in seed funding. The startup develops Internet of Things (IoT) powered solutions to complement last-mile delivery of perishable goods. This aids in eradicating losses associated with transportation and storage of temperature-sensitive and perishable goods in Africa.

Hitherto, the West African startup has raised $1.7 million in equity funding, and $275,000 in grants from various entities such as the Africa Business Heroes by Jack Ma Foundation, Google Black Founders Fund, FbStart and Lafiya Innovators by Impact Hub.

Overall, technology hubs Kenya, South Africa, Ghana, Nigeria, Morocco, Egypt and Rwanda are leading Africa’s cold chain supply market.

The cold storage landscape in Africa has been changing over recent years. The demand for viable cold chain storage, packaging and transportation solutions has been increasing exponentially. The need for effective and efficient cold supply chain was particularly more evident at the height of Covid-19 pandemic as government stepped out to vaccinate the populations.

The case for proper cold chain systems

Vaccine storage and the last mile distribution became a hurdle in many parts of Africa. Several countries were unable to administer the life-saving Covid-19 vaccines to their citizens. Inarguably, vaccines require meticulous care, they need to be stored and distributed at extremely low temperatures. This calls for proper cold chain storage and handling, coupled with good distribution across the supply chain to maintain their quality, effectiveness and potency.

Furthermore, this has been fueled by the rampant post-harvest losses that derail the achievement of Africa’s food security. According to the UN Africa holds 65 percent of the world’s total arable land. The food and agriculture industry contributes up to 35 % of the continent’s GDP, and employs about half of its people. Both agricultural produce and distribution of medical supplies is heavily affected by the lack of proper cold storage facilities.

African farmers encounter a plethora of challenges such as lack of access to electricity and poor infrastructure. Above all, they face a mammoth challenge when it comes to storage of their crops, pertinently temperature sensitive products.

Consequently, this leads to loss of harvests and the leftovers are not sold at optimal prices. This then underscores the importance of cold storage solutions, which help to extend the shelf life of fresh produce, as they are vulnerable to spoilage. It’s a mandatory requirement for temperature sensitive products such as food and medicine, to be stored in consistent temperatures throughout the supply chain to prevent wastage.

Also Read: Investing in agri-tech startups in Africa will power agriculture


Famine and drought ravaging Africa
Hunger crisis due to famine causing daunting food insecurity in Africa.

Food insecurity remains an existential hurdle in Africa. The global food crisis instigated by the historic-high inflation levels has further aggravated the situation. According to the UN, an estimated 60 million people in the Horn of Africa are currently  in urgent need of food aid. Furthermore, the Integrated Food Security Classification (IPC), has revealed that an estimated 20.3 million people which is 42% of the population are currently facing acute food insecurity in Sudan, due to the ongoing conflict between rival military factions. According to the AfDB, an estimated 246 million Africans suffer from hunger and malnutrition.

To boot, a recent report by the World Bank, underlines that up to 73 million people in Eastern and Southern Africa, are currently experiencing acute food insecurity. Moreover, the UN Food and Agriculture Organization (FAO), has identified 18 hunger hotspots, covering 22 countries across the world in the June to November UN Outlook report. Kenya, Ethiopia, Central African Republic (CAR), and the Democratic Republic of Congo (DRC) are among the African countries mentioned.

Horn of Africa hunger crisis

According to the World Bank, Africa spends $43 billion annually on food imports to feed its people, in order to seal the deficit in food supply. The World Food Programme (WFP) requires $810 million to respond to the hunger crisis in the Horn of Africa alone yet other regions in the continent are also in need of food aid. By 2030, Africa is projected to be a $1 trillion food market, with the burgeoning population, and increased consumption in cities driving the demand for more products.

Cold storage startups are key in the provision of cooling systems and solutions for the preservation of both perishable products along temperature-controlled supply chains via continuous refrigeration.

Also Read: AgriTech: Africa’s pathway to end food insecurity

Curbing food wastage with an empowered cold supply chain industry

The climate change crisis has significantly contributed to the dire food insecurity in Africa but so has food wastage. It is estimated that more than one third of food produced in Africa is lost to spoilage or waste. The leading cause of food wastage is spoilage due to lack of cold storage facilities, to extend the shelf life especially of temperature sensitive food items.

This stark numbers could be lower, if food wastage was completely eliminated. Food wastage leads to huge losses economically, socially and even leads to environmental degradation. This is by causing temperatures to rise when decay occurs in waste landfills and emit methane, which is a potent greenhouse gas (GHG).

Food spoilage due to lack of sufficient cold chain storage solutions in Africa
Food loss and wastage in Africa derailing food security achievement.
Photo-FL & WP

UNEP says about 15 per cent of food-related carbon dioxide emissions comes from food losses. This is attributable to lack of refrigeration and spoilage in transport and processing. Overall, total food wastage is responsible for around 6 per cent of global GHG emissions. This translates to around three times the global emissions from aviation.

Additionally, UNEP indicates that if 50-75 per cent of food waste is cut by 2050 without resorting to fossil fuel, energy intensive methods and dangerous refrigerants, avoidable emissions could be equal to 10.3-18.8 gigatons of carbon dioxide.

Reliance on outdated generic cold rooms

A report by Briter Intelligence says farmers and agri-traders rely on makeshift coolers or outdated, generic cold rooms. These systems are unreliable, poorly maintained and have high operational costs.

In a similar way, health centers lacking medical fridges have seen their supplies like blood and pharmaceuticals go to waste due to improper handling. Most of the available systems require access to electricity and water, which are out of reach or costly to poor farmers in rural areas.

Cold storage or cold supply chain products can help reduce spoilage and maintain quality and efficacy, but require sufficient electricity to work effectively. There is urgent need to deploy resilient, reliable and sustainable cold chains to tackle food and medicine losses in Africa. According to FAO, 40 per cent of food in Sub-Sahara Africa spoils before it reaches the consumer.

Food wastage erodes farmer incomes

Its also estimated that 30-40% of horticultural produce in sub-Saharan Africa does not make it to market, hindered by informal and unreliable supply chains. This pulls the veil on the unmet demand for temperature-controlled cold storage warehouses and transportation services. Overall, food wastage affects not only the consumers, but the returns to farmers. It negatively impacts the environment by producing methane. Such losses also put to waste resources used to grow the food in the first place.

Spoilage and wastage of perishable fresh produce due to disruptions in the cold supply chain in Africa
Fruit and vegetable spoilage due to lack of sufficient cold storage facilities in Africa ,aggravating food insecurity.

Statistics from the African Development Bank (AfDB), indicate that more than 640 million people lack access to electricity, which is really the conduit of sustainably maintaining constant cold temperature for both food and medical supplies to thrive. However, to rise to the challenge, some startups have developed solar-powered cold storage solutions to pertinently cater to remote areas.

Also Read: Is Africa’s Warehousing; Logistics Market ripe for Industrial Robots?

Startups Revolutionizing Africa’s Cold Supply Chain Industry

The tide has been steadily changing with startups innovating digital solutions to respond to emerging challenges. These startups offer cold storage products and solutions that are energy- efficient, and compliant with export standards. They are also affordable and well equipped with temperature and performance monitoring systems.

Technological developments in the sector are bolstering the quality and safety of perishable items. Innovations are helping cut product wastage, spoilage, while ameliorating efficiency in the supply chain. Startups offering cold chain solutions in Africa from storage, packaging to transportation are addressing financing barriers. They are also plugging energy gaps, and cutting food losses. What’s more, economies are realizing less medical supply wastages.

A report by Briter Bridges says growth of Africa’s private sector and venture capital is bolstering cold storage startups. Some firms are receiving backing from investors via initiatives such as Energy Access Ventures, Google for Startups, and All On.

Solar-powered cold rooms helping farmers in remote areas secure their harvests.
Solar-powered cold storage rooms are a lifesaver to farmers in rural Africa in preventing post-harvest losses.
Photo/Food Tank

Tackling post-harvest losses

Further, Briter Intelligence underscores some of the needs startups are meeting across the supply chain. These include reducing post-harvest losses by building solar-powered cold storage facilities for farmers. Startups are also curbing medical supply wastage via adoption of cost-effective cold chain solutions. This is enabling healthcare providers to deliver life-saving medical services to patients.

Cold chain products extend the shelf life of highly perishable medical supplies. Some of supplies benefitting are insulin, vaccines, blood, organs and tissues. Pharmaceuticals requiring great care and precision during transportation are also benefitting a great deal,

In addition, cold chain startups are enabling proper storage and monitoring of food and medicines. Some fruits, vegetables and flowers have specific temperature, pressure, relative humidity, and airflow requirements. They, therefore, need customizable solutions to keep them fresh.

Businesses need the right equipment to monitor the storage of fresh produce and medicines to reduce losses. Proper storage extends produce and medicines shelf-life, cuts operational expenditure, and increases revenue. Startups addressing this need offer remote monitoring systems. This provides access to insightful data on storage conditions of perishable products. The offering also has smart packaging, which ensures end-to-end traceability during shipment.

Cold storage for fresh produce could help restore food security in Africa
Cold storage for Africa’s fresh produce could help prevent post-harvest losses and restore food security.

Charging systems for agro-traders

Assisting farmers to meet required export standards. Startups like InspiraFarms offer solutions that enable farmers to comply with the required export standards, for the sale of their produce. By the same token, startups provide access to income-enhancing opportunities for agro traders. This is by availing lighting and charging for agro traders via an off-grid solar lighting system. Moreover, they also provide electrification to growers and traders, to keep their stores open for longer at night.

To boot, startups have been eliminating the need of owning efficient cooling systems via their Cooling as a Service (CaaS) business model, which allows farmers and retailers to pay for the unit of cooling that they consume. Additionally, they also facilitate last mile supply chain.

Also Read: Africa’s warehousing sector set to record massive growth

Africa’s Cold Chain Trailblazers

Some startups trailblazers in the continent include Kenya-based Solar Freeze. Solar-Freeze offers energy efficient mobile cold storage products, assisting smallholder farmers mitigate post-harvest losses.

Another firm is InspiraFarms also based in Kenya. It provides energy efficient pre-cooling and cold chain solutions for smallholder farmers. Further south, Cape Town-based Pharma Scout designs and builds remote monitoring solutions to store medicines.

In the mix is Coldbox Store, a Nigerian company. It is building and operating solar-powered cooling solutions for storage and distribution of temperature-sensitive agricultural products. Similarly based in Nigeria is Life Bank, a startup which guarantees the safe delivery of medical supplies to healthcare facilities.

ColdHubs is yet another Nigerian company that offers access to affordable solar-powered cold stations, for storing and preserving perishable foods. Koolboks based in both Paris and Nigeria provides access to affordable solar refrigeration, for agro traders to enable them spend less and sell more.

In Ghana, Accra-based Freezelink builds cold chain infrastructure for farmers and pharmaceutical players.

Africa will witness a surge in production of pharmaceutical goods in step with the African Union and African Centres for Disease Control and Prevention’s goal of producing 60 per cent the continent’s vaccine needs locally by 2040.

Therefore, there is need for more financing of cold storage value chain to turn this vision into a reality. With over 1.4 billion population, there is limitless potential for the industry to thrive. There remains a myriad of opportunities for investors and financing needs, too. Africa’s cold supply chain will advance to global standards once policymakers fix these challenges.

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