Changing lifestyles and rising per capita income is increasing the demand for Brazil Cold Chain Market: Ken Research

1. Cold Chain Industry in Brazil expanded at a CAGR of ~7.6% in 2022 and is poised to climb further in 2027F

Brazil Cold Chain Market is estimated to grow at a positive CAGR of 15.3% in between 2023F and 2027F.

The Cold Chain market in Brazil is emerging with key projects due to high exports of fruits and vegetables. The number of new companies is constantly increasing in the market which are small and still capturing market share. The evolution of Cold Chain is being driven by the appearance of new companies with a vision of opportunity in the business and aim to capture market share. The surging growth is attributed to the increasing demand for meat and seafood and rising export and imports in the country.

The increasing consumption for meat and seafood and other items helped in growing demand for cold chain facilities in Brazil which attributed to the growth of the industry.

2.  Southern and South-eastern region capture the majority of Brazil Cold Chain Market with a share of 54% in 2022

The southern region of the Brazil has geographical advantage as it is near to coastline which makes it strategically better for transportation. It also has the second largest industrial base in the country. It contributes to the maximum share of 31% to the Brazil Cold Storage Market.

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The Southeast region comprises of state of Sao Paulo, Rio de Janerio, Minias Gerais etc. It is the wealthiest and most populous region of the country. It contributes 27% to the total revenue of Brazil Cold Storage Market, all these states are situated near the rich coastline which provide ample opportunities for import and export. Many companies established their first warehouses in Sao Paulo. The prices charged here are competitive due to presence of many companies here.

3.  Lack of infrastructure, transport security, increasing operational costs are some of the challenges faced in the Brazil Cold Chain Market

Lack of Infrastructure

There is difficulty related to infrastructure of the distribution centers and transport routes, both on the railroads and on the highways hindering speed and quality of travel. Majority of the roads are unpaved and seaways are underutilized posing several challenges for the transporters.

Rising Cost of Operations

It is very difficult for the companies to keep their accounts scaled considering the operational costs of operating the business. Increasing taxes, high investments required in cold storages and reefer trucks, lack of infrastructure causing severe damage among other things make it difficult for companies to maintain profitability.

Transport Security

A company would expect its load to arrive complete and on time.

The number of accidents on the country's highways is increasing and many of these incidents involve trucks.

Thus, one of the major logistic challenges is to find solutions so that occurrence of accidents can be reduced.

There are other problems like health of employees driving the vehicle, goods can be damaged or lost causing losses to investors.

4.  Recommendations to meet Brazil cold chain challenges 

Infrastructural Development
Adopting Automation and Modern Technology
Expansion to untapped and underdeveloped areas of Brazil
Increasing number of cold storage warehouses
Simplifying Tax Structure
Improving Transport Security

For more insights on the market intelligence, refer to the link below:-

https://www.kenresearch.com/automotive-transportation-and-warehousing/logistics-and-shipping/brazil-cold-chain-market-outlook-to-2027/596164-100.html

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