India’s first and only countrywide cold chain logistics service, Snowman Frozen Foods Ltd, is gearing to cash in on the boom in the retail and cash-and-carry sector by spending up to Rs80 crore to expand its facilities.
The company will put in place four large cold stores across the four metros and an equal number of smaller cold stores elsewhere, besides adding to its existing fleet of refrigerated vans and trucks.
The Bangalore-based Snowman has, in the decade it’s been around, stored ice-creams for Hindustan Unilever Ltd’s Baskin Robbins brand, poultry for Godrej and the Tatas’ Taj Group of hotels, potatoes for McDonald’s and pizza base for Pizza Hut, among others.
More recently, it’s added clients such as the retail and cash-and-carry businesses, including Metro, Monday to Sunday and Reliance Fresh. With cold stores at 16 locations across the country and a fleet of about 98 refrigerated vehicles, the company has been covering around 120 cities. Majority-owned by logistics company Gateway Distriparks Ltd, it’s the only national player in a highly fragmented and disorganized market.
“We have so far operated only small and medium sized stores with capacities ranging between 300 and 1,200 tonnes,” said Prem Gupta, director of Snowman and vice-chairman of Gateway.
Starting next year, the company is going to think and act big, he said. “At our recent board meeting, we decided to set up four cold stores in Delhi, Mumbai, Bangalore and Chennai, each with a capacity for 5,000 tonnes of food products,” Gupta added.
Though the retail sector in India has been steadily growing over the past decade, the evolution of organized cold chain logistics has not been so successful, hampered by several factors.
These include high investments and bad roads that consume higher quantities of fuel, escalating costs. A high 40% import duty on refrigeration units has been another deterrent.
Snowman is also conducting a pilot project in collaboration with ITC Ltd and Ingersoll Rand for procuring, sorting, cleaning, packaging and transporting fresh farm products on a daily basis.
“The market is changing and the big players in the food business are getting into more centralized procurement and distribution of their products. We see a big role for ourselves in this changing market situation,” Gupta said.