The UAE Cold Chain market is projected to grow at a CAGR of around 6.9% during the forecast period of 2022-27, reveals MarkNtel Advisors in their recent research report. The market growth is attributed to factors, including increasing the volume of import of food products by other countries, growing initiatives to improve the logistics infrastructure, and soaring food consumption, owing to a rising consumer base & growth in income. By 2025, the UAE's food consumption is expected to reach 59 million tons. The UAE’s population is estimated to hit 10 million by 2025.
Furthermore, rising demand for frozen & ready-to-eat food among consumers with changing lifestyles & growing government aim to increase tourist inflows are further driving the market growth. According to Dubai Tourism Strategy, the country aims to attract 21 to 23 million visitors by 2022 & 23 to 25 million visitors by 2025. Besides, the need for cold storage has intensified due to the rising wastage of fruits & vegetables and burgeoning government inclination to start the local manufacturing of the pharmaceutical product in the region.
In 2021, in the UAE due to insufficient cold storage warehouses, 20% of total fruits & vegetables used to get wasted all the time. Moreover, the growing demand for online grocery shopping has soared exponentially. Thus, this has pushed up the demand for refrigerated warehouses in the country.
Cold Storage Acquired the Majority Market Share
Based on Types, the market bifurcates into Cold Storage & Cold Transportation. Among them, Cold Storage acquired a majority share of the UAE Cold Chain market, owing to the significant growth of retail shopping & ongoing government initiatives to localize food production. In 2021, the UAE Ministry of Industry & Advanced Technology (MoIAT) and the UAE Food & Beverage Manufacturers Group signed a strategic memorandum of understanding (MoU) to promote local manufacturing of food products & target export markets.
Besides, the rising demand for fresh fruits and vegetables among consumers, the introduction of various initiatives to reduce the reliance on the import of pharmaceutical products, and significant growth in the consumption of perishable products such as dairy, meat, and seafood have imposed lucrative opportunity for the growth of the Cold Chain market during the forecast period.
Food & Beverages to Witness Significant Growth During the Forecast Period
Based on End-user, Food & Beverages is expected to witness significant growth during the forecast period. The growing demand for packed food products in the UAE has supported the surge in demand. The UAE is also heavily reliant on foreign companies to supply packaged food items from countries such as the US, Hong Kong, India, and others, which has resulted in a rapid increase in the number of cold storage facilities in the country from 2017 to 2021.
During COVID-19, the government of the UAE ensured the proper supply of food & avoided any supply chain disruption leading to proper management of packaged food storage, transportation, availability in supermarkets/hypermarkets, etc. These were some other factors that have helped the UAE to build a robust cold storage system to cater to the growing need for food security.
Hence, this is further projected to boom the market growth during the forecast period, reveals MarkNtel Advisors in their research report, the "UAE Cold Chain Market Analysis, 2022."
According to MarkNtel Advisors, the leading players in the Cold Chain market are Gulf Agency Company, Al-Futtaim Logistics, Hellman Worldwide Logistics, Global Shipping & Logistics LLC, RHS Logistics, CEVA Logistics, Mohebi Logistics, Agility Logistics, Panalpina-DSV, Kuehne- Nagel, RSA Cold Chain, DB Schenker.
Key Questions Answered in the Study