As memories of Christmas fade into the distance a new year brings no rest for cold chain operators. For some, attention has long since turned to Valentine’s Day, Mother’s Day and Easter. Others will already have one eye on catering for the summer barbecue season or for Halloween, which has become an increasingly important date in the calendar for the British public. Before we know it, Christmas will once again loom large on the horizon and the cycle will begin all over again.
Christmas remains the number one seasonal peak for businesses with the key constituent parts of a traditional Christmas feast all requiring some element of temperature control, but an increase in the number and significance of seasonal events throughout the year means Christmas trading is less likely to make or break the fortunes of cold chain operators than in days past.
“Christmas is still a very heavy demand period, but the peaks of 10 years ago are not there,” says Ben Seamons, international director for Solstor UK.
This can partly be attributed to improved cold chain logistics. Seamons cites better storage of frozen goods, tempering for chilled goods and better demand planning as factors that have allowed businesses to start flattening out the festive demand curve.
This tends to be easier for those businesses dealing with frozen goods as opposed to fresh. “For the frozen guys, a lot of their work tends to happen in the months before Christmas when they can stockpile supplies of meats and other foods that can be frozen,” explains Cold Chain Federation deputy chief executive Tom Southall. “For the chilled guys, it’s really all about the week before Christmas when they’ve got to get things like sprouts and parsnips and other products that can’t be frozen to consumers as quickly as possible.”
Apples and oranges
Changing consumer habits also have an important role to play in taking the edge off seasonal peaks. Today’s shoppers expect products traditionally consumed in high volumes at a particular time of year, like fresh turkey or satsumas for instance, to be available all year round. “There are still peaks, but the 24/7, 365 days a year nature of consumer demand for products, which often can only be sourced from faraway places, means that pretty much every week is a challenge in terms of balancing demand,” says Southall.
The changing nature of seasonal demand impacts on business operations in numerous different ways. Paul Hollman, cold stores manager for fresh produce supplier Mansfields, explains that customer demand for apples over the Christmas period has fallen in recent years as people favour citrus fruits like clementines and satsumas. “It has changed quite dramatically in the past six or seven years,” he says. “There used to be a run up to Christmas when the pack houses were extremely busy but I would estimate we do around half of the volume we used to in lead up to Christmas and Christmas week itself.” A spike in demand for apples now occurs early in January and February when people choose to go on diets in the New Year. “That’s when it’s literally full steam ahead,” says Hollman.
The ability to store apples for long periods of time makes managing demand easier than for many other types of fresh produce. Varieties like Bramley and Gala are harvested during the first half of September and will be held right through until the following summer without much degradation at all, according to Hollman. “We don’t use any chemicals or any drenching. All we do is we allow natural respiration of the fruit to bring the oxygen level down, and we store them in low conditions of oxygen that puts the apples to sleep.”
Predicting demand with data
It’s not just apples that have benefited from improvements in cold chain logistics and technology. Across the board, the infrastructure of the cold chain has developed significantly during the past 10 or 20 years, says Southall. More storage capacity has been added while the ability to predict peaks and troughs in demand using historical data has also helped operators better respond to seasonal spikes, for barbecue products for instance. “There are very sophisticated ways of forecasting now, whereas the process was a bit more reactive and panic-driven previously,” Southall explains.
Some companies have built specific capabilities in catering to seasonal demand in order to carve out a market niche. Southall uses the example of pumpkins that are traditionally consumed in large volumes at Halloween – an event that has long been celebrated in the United States but has only recently been wholeheartedly embraced by the UK public. “Pumpkins have become a thing that everyone wants and there’s now a huge, dedicated supply chain for them,” Southall says.
Chasing the seasons
The vast majority of pumpkin sales is now condensed into a short period in the lead up to 31 October, but for other types of fresh produce the concept of seasonality has all but disappeared in the minds of consumers who expect products, such as grapes and strawberries, to be available all year round. The upshot for those businesses responsible for moving these products around the world is that the greatest operational challenges exist on the supply rather than demand side.
“We are operating as a global business and so we are affected hugely by seasonality, but it’s driven by the seasons themselves rather than by consumption,” explains David Browne, director of corporate and social affairs at Maersk. He gives the example of grapes to illustrate the logistical challenge in helping keep supermarket shelves stocked all year round. The grape harvest starts off in Peru and Namibia in December, then it moves across to South Africa, before moving up to India, then across to Egypt, then to Northern Europe, before it starts all over again. “When we are supplying our customers in North America or in Western Europe, we need to have the equipment available for the grapes as they start in South America and then ensure we have the right equipment in the right place as it moves around the world,” says Browne.
Flowers delivered by sea
One product that remains heavily influenced by seasonal demand is flowers. Occasions like Valentine’s Day and Mother’s Day are key gifting occasions for fresh cut flowers like roses, the vast majority of which are distributed by air freight from countries such as Kenya and are in the shops mere days after being picked in the fields.
Here again, technological developments have the potential to flatten out some of that demand by extending the life of fresh cut flowers. Maersk has developed atmosphere-controlled refrigerated containers which allow flowers to be transported via deep sea shipping while maintaining their quality. “On day one, instead of loading on an aircraft, they get loaded into the container straight away and we prevent them from decaying from that moment until the container is opened,” explains Browne. “We’re offering an alternative [to air freight] that is cheaper for the vendor or importer, is a lot more acceptable from an environmental perspective, and gives them a lot more [storage] space.”
Extreme weather and the risk to supply chains
Environmental considerations are hugely relevant to any discussion around seasonality. Not only is a warming climate changing what food and drink can be produced where (see, for example, the boom in production of British wines in recent decades) it is also impacting yields, which in turn impacts availability of supply. Seamons at Solstor notes how Spain and Italy have been seriously affected by adverse weather events, such as flooding, in recent times resulting in a drop off in volumes of fruit from certain regions. This in turn has forced customers to search for alternative sources of supply.
Southall says growing global volatility in supply points to the importance of holding good relationships with suppliers. “There’s a lot more risk to the resilience of supply chains, whether it’s shipping delays or climate change. The cold chain is having to be more reactive to global events to continue to provide the products that consumers need.”
Meanwhile new challenges are emerging all the time. Seamons cites driver availability as a factor that has changed the dynamics around how Solstor plans for seasonal events. “Orthodox and Catholic holidays are the hardest to plan as drivers want to have the time off,” he says, adding that “summer holidays is our worst period for availability”.
The seasonal peaks of yesteryear may have softened slightly but the challenge in getting the right product to the right place at the right time never ceases to evolve.
Read more news and features in the latest Cold Chain News Magazine.
