According to the World Food Programme, one-third of food produced for human consumption is lost or wasted globally. This amounts to about 1.3 billion tons per year, worth approximately US$1 trillion. Some of these losses happen at retail and consumer levels, while some are at post-harvest and processing levels, such as storage, preservation, and shipment.
Foods such as fruits and vegetables, ice cream, poultry, seafood, dairy products, and beverages require maintenance at predefined temperatures and are exposed to atmospheric conditions.
Players in this industry face a daunting challenge. At every step, they have to ensure the food products are chilled, keeping the temperature at specific levels during storage and transporting them with temperature-controlled trucks to keep them safe and consumable . In developing countries with epileptic power supply, this seems like an insurmountable task.
Moving goods in temperature-controlled trucks – is vital for agriculture and agribusiness as well as pharmaceuticals. Yet, temperature-controlled logistics (TCL) is virtually non-existent in Nigeria.
Every year, Nigeria loses between 40 to 50% of the total food produced. This is a trend across Africa. According to FAO, food losses in sub-Saharan Africa reach $4B every year. The lack of cold storage accounts for at least a quarter of post-harvest losses.
In 2020, in partnership with the International Finance Corporation (IFC), we began to study robust cold chain storage in Nigeria with a focus on sustainably cooled temperature-controlled logistics (TCL). In 2021, KOBO, the IFC, and the UK Department for Business, Energy & Industrial Strategy (BEIS) asked innovators around the world for climate-smart, TCL solutions that can help Nigeria tackle its food wastage, support its health sector, and reduce fossil fuel consumption.
Temperature-controlled logistics across Sub-Saharan Africa is scarce
In Nigeria, cold storage services barely scratch the surface of their $10.6 billion potential
Hard data on sub-Saharan Africa’s temperature-controlled logistics industry is scarce, but a few common trends emerge. Independent third-party temperature-controlled logistics providers remain niche. Fresh produce markets, largely informal, cannot afford the relatively high cost of cold chain services. An IFC study found that temperature-controlled logistics markets in Nigeria, Kenya, and Côte d’Ivoire were an infinitesimal fraction of their potential. Nigeria’s cold chain services barely scratch the surface of their potential at 0.6% of its $10.6 billion potential. Kenya hardly fares better, reaching 1% out of $9 billion. Côte d’Ivoire, the best performer, stood at a mere 2.5% of its potential $1.8 billion size.
In Nigeria, the food and beverage industry produces $20.5 billion worth of goods and generates over $100 billion in total consumer expenditure. Yet only a tiny $67 million market of cold trucks serves this gigantic industry, delivering mostly fish and seafood, fruits, vegetables, dairy products, and pharmaceuticals.
The bulk of this tiny market is controlled in-house by large retailers and a few domestic players and pharmaceutical logistics providers. But most of the fresh produce that needs to be transported in temperature-controlled trucks is produced informally by smallholder farmers. A reliable third-party cold chain logistics solution for agricultural produce does not exist in Nigeria. Food and beverage manufacturers rarely, if ever, use cold trucks to transport goods.
In recent times, the preferred means of transport are cold trucks that use PCM plates. Eutectic PCM refrigeration relies on frozen brine alloys to absorb heat and help maintain the desired ambient temperature in a cold truck’s container. The eutectic plates are charged for 8 hours and will maintain ambient temperature for up to 15 hours on a single charge. Since eutectic refrigeration simply reuses the cold stored by a eutectic solution instead of direct expansion of refrigerant gas, it is also extremely efficient because it has lower heating and cooling loads.
But PCM-equipped cold trucks are expensive equipment. Prices start at around $30,000 and can reach $200,000 for a single truck. Large retailers can afford these trucks, but some so-called cold trucks in Nigeria are simply trailers carrying deep freezers and an electric diesel generator to power the refrigerating sets while in transit.
This jury-rigged cold storage barely scratches the surface of what is needed.
Trialling technologies to support agricultural production, like yams
As we provide integrated logistics solutions across Africa, this was an interesting challenge.
We wanted to find out how we could reduce food waste and improve business outcomes by leveraging temperature-controlled logistics for Nigerian businesses. Ultimately, we want to offer reliable end-to-end TCL services to our clients across the continent.
When we launched bids for innovative cooling technologies, we looked for solutions that fit three criteria:
- The solutions needed to work in an infrastructure poor ecosystem. This means that they must be cheaper to acquire and operate. Our goal was to reduce operating costs by 30%.
- We wanted solutions that could be financed affordably because they increased revenue for our partners. Our goal was to grow the $67 million TCL market in Nigeria by 30%.
- We looked for climate-smart technology that would cut emissions by 50% while still increasing the value of fresh produce across the entire chain.
Our call for technology solutions was answered by 70 innovators in 19 countries. We selected eleven companies and matched them with Nigerian companies in agriculture, food and beverage, retail, pharmaceuticals, logistics, and last-mile distribution. Together these 27 innovators and companies were tasked to build 20 pilots of their solutions for the Nigerian market.
Our yam storage pilot with TAK Logistics for example is a good example of how the Sustainable Cooling Temperature-Controlled Logistics program is building a sustainable solution to the supply chain of yam in Nigeria.
Nigeria supplies over 70% of the world’s yam. With 47.5 million metric tons produced annually, it is the second most-produced food crop in Nigeria. In its raw state, yam fetches NGN3.75 trillion (about US$9 billion) annually and in North American retail markets, yam can fetch 15x of this. But there is no successful commercial yam storage facility in Nigeria. As a result, every year tons of yam spoil before they reach consumers, or in some cases, before they even leave the farm.
From our storage pilot, where almost 9,000 yam tubers were stored in a cold room, we are learning how to store yam better, extend its shelf life, and reduce the environmental impact yam wastage causes.
The promise of disruptive cooling technologies: ChillTech
As part of the pilot, we are getting to work with some of the most innovative cold chain storage technology in the world to deploy solutions in Nigeria. One of the most exciting of these solutions is ChillTech.
ChillTech has developed proprietary absorption chilling technology that turns the waste heat from toxic gasses of diesel engines and gas micro-turbines into cool air and water. The technology is used to cool anything from storage units containing perishable food to air conditioning for homes and offices. Engineers at the company have also designed a novel mobile unit that uses absorption chilling to provide refrigeration for perishable foods and medicines. With a 7 kW unit mounted on a truck, a 40-foot container can be cooled for the duration of a trip, powered solely by the heat from the exhaust of the truck.
Later this year, we will deploy ChillTech’s cooling technology in a grain and tomato storage facility in Abuja.
Câm Dairies is already using a PCM-enabled rechargeable mobile chilling system developed by Tessol and Gricd, two of our innovation partners. After a single charge, a Câm Dairies truck can maintain ambient temperature for 15 hours without a direct power source.
Build resilience and food security across the continent
The Ukraine-Russia war has thrown the issue of food security into the spotlight once more. African countries are reeling due to their dependence on increasingly fragile international supply chain networks to meet the growing food demands. A resilient local food supply chain cannot work if we cannot properly store our fresh produce safely to the people who need them. A robust cold storage network connected by standard and climate-smart temperature-controlled logistics systems will enable farmers and businesses to create more value for the economy and reduce our food import bill.
Alongside our partners, we are rigorously testing each potential technology to identify the best-fit solutions. When we find the best solutions, we will add affordable cooling technologies to the services we offer our clients. This will be the first end-to-end sustainable cold chain storage system in Sub-Saharan Africa. It will also be a token of the opportunity and challenge ahead of us.