As the Frozen Food Supply Chain Continues to Grow, Automated Reporting and Advanced Analytics Will Be Key

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By Adhish Luitel | 3Q 2023 | IN-7070

This ABI Insight looks at how the global frozen food market is growing at an unprecedented level and has put a strain on the supply chain—operationally, as well as from a regulatory perspective. Effectively using data points captured via digitalization will be imperative for breaking down silos and building a more resilient supply chain.

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Frozen Food Market Growth at an Unprecedented Level


The global frozen food market, valued at US$265 billion by the American Frozen Food Institute (AFFI), is witnessing an exceptional increase in demand. This valuation includes the total retail sales numbers, as well as the revenue from cold chain transport, storage, manufacturing, and packaging. In the United States, this market is valued at over US$72 billion. This surge, initially accelerated by the COVID-19 pandemic, has emphasized the need for a more resilient cold storage supply chain infrastructure to ensure the growth and safety of this sector. In the United States, frozen food demand has grown by 23% since 2019 according to the AFFI. In addition, labor shortages, the Russia-Ukraine conflict, and ongoing climate issues have all exposed the fragility of different points of the food supply chain. When it comes to the frozen food supply chain, each step is critical as products have to maintain proper temperature throughout a complex network of refrigerated trucks and cold storage facilities.

Barriers Lie Ahead


One of the most significant issues with the frozen food supply chain is the inventory management complexities. Refrigerated technology is often outdated in cold storage facilities. Frequently, with disruptions in production and distribution, food producers such as Conagra, Nestlé, General Mills, and Unilever have faced challenges in maintaining adequate food inventory. Approximately 13% of all food produced globally is lost annually due to inadequate cold storage, according to a study from Columbia University’s Columbia Climate School. Due to the volatile nature of consumer demand, the frozen food industry certainly needs more storage capability and more efficient transportation. Advancements in cold storage infrastructure will play a critical role in shaping the future of frozen food as the sector continues to expand. In addition, over the years, labor shortages have been a persistent problem. These shortages can be attributed to factors such as a tight labor market and challenges in attracting and retaining workers in the food processing industry. So, overall, a much more resilient supply chain infrastructure is needed.

Beyond infrastructure, regulatory compliance can also be complicated. The United States has stringent regulations governing the frozen food industry, overseen by agencies such as the Food and Drug Administration (FDA) and the United States Department of Agriculture (USDA). Section 204 of the Food Safety Modernization Act (FSMA), also known as the Food Traceability Proposed Rule, calls for the FDA to identify a list of foods that require additional record-keeping and traceability. Currently, the list includes foods such as fresh produce, cheeses, eggs, nut butter, seafood, and salads, but is likely to develop further. The rule came into effect in January 2023 and requires all food companies to become fully compliant by 2025. ABI Research’s Digital Transformation of the Food and Grocery Supply Chain report (AN-5712) breaks down food regulations in more detail by different geographies and their impact on the food supply chain.

Solutions Implementation Will Be Key


New innovations can play a crucial role in addressing and solving problems with frozen food supply chains. When it comes to monitoring and management, Internet of Things (IoT) sensors can be placed in refrigerated trucks, storage facilities, and containers to monitor temperature and humidity. These data not only help retailers such as Walmart and Kroger be compliant with the FSMA regulations, but also help ensure that frozen foods remain within specified temperature ranges throughout the supply chain. Ambient IoT, which refers to a large number of objects connected to a wireless sensor network is emerging as a potential answer to a lot of real-time monitoring hassles. The objects are connected using low-cost, self-powered sensor nodes. Wiliot, a company that develops IoT technology for supply chain and asset management, has been breaking a lot of ground in this space. It has been able to develop and mass-produce low-cost and energy harvesting ambient IoT chips known as “Pixels.” These Pixels draw raw data from the products or equipment they are applied to, which are picked up by bridges through sensing, rather than scanning, and then broadcast directly into the Wiliot Cloud. In addition to inbound stock being monitored in terms of environmental conditions, temperature, and location, Wiliot has also announced that the IoT Pixels will soon be able to detect humidity, surface occupancy, and proximity, enhancing the capability and use cases in industries such as frozen food and pharmaceuticals. These low-cost and energy-harvesting chips can enable both retailers and producers to track food items, not just at a pallet level, but also at an individual item level.

Some of the newer innovations in packaging materials and insulation technologies can also bolster the frozen food supply chain, as they can help maintain temperature stability. Solutions offered by vendors such as Cryopak and Sonoco ThermoSafe provide advanced packaging solutions that include Phase-Change Materials (PCMs) and Vacuum Insulation Panels (VIPs). Beyond this, retailers and producers can also leverage advanced analytics to assess historical and real-time data to predict potential disruptions in the supply chain. This would allow them to proactively address issues such as demand fluctuations or equipment failures. Platforms offered by IBM, SAP, Oracle, and Siemens, among other vendors, offer capabilities that make for a more efficient frozen food supply chain.