Enhance Food Safety With Less Cost
Emerson Climate Technologies
China Cold Chain Study
November 6, 2014
Agenda
• About the Emerson Cold Chain study
• Consumer survey on food safety
– Food purchase behavior change
– Food safety knowledge among consumers
• Supermarket evolution
– Case study: DIA intelligent stores
• Emerson’s recommendations
About the Emerson Cold Chain study
•
•
•
The “Enhance Food Safety with Less Cost” – Emerson Climate
Technologies China Cold Chain study aims to enhance the understanding
of Chinese consumers’ purchasing behavior when it comes to refrigerated
products and their knowledge of proper food handling and storage.
It also provides insights on how supermarkets can enhance their market
competitiveness by leveraging the latest technologies to further improve
food safety and reduce operating costs.
The study consists of a consumer survey on food safety, a DIA supermarket
case study and Emerson’s recommendations to the cold chain industry.
Consumer survey on food safety
City
Survey methodology
• A survey was designed to understand Chinese
consumers’ food buying habits and knowledge
of handling and storage of refrigerated foods.
• It was conducted by CTR Market Research Co.,
Ltd (央视市场研究) in Beijing, Shanghai and
Guangzhou in August 2014.
• The survey was conducted through face-to-face
interviews with a total of 548 people, between
20 and 60 years of age. All participants were
involved with food purchasing for their
households.
33%
34%
Beijing
Shanghai
33%
Guangzhou
Age
29% 20%
25%
26%
20-29
30-39
40-49
50-60
Wet markets and large supermarkets are where
consumers normally buy perishable fresh foods
100%
80%
93%
79%
60%
40%
24%
20%
12%
0%
Large supermarket Small supermarket /
convenience store
Wet market
Q: Where do you normally buy perishable fresh foods?
Others
100%
Consumers normally buy refrigerated foods
in large supermarkets
89%
80%
60%
46%
40%
20%
8%
15%
0%
Large supermarket
Small supermarket /
convenience store
Wet market
Q: Where do you normally buy refrigerated foods?
Others
Frozen foods are also purchased in large supermarkets
100%
92%
80%
60%
35%
40%
30%
20%
5%
0%
Large supermarket
Small supermarket /
convenience store
Wet market
Q: Where do you normally buy frozen foods?
Others
Milk and yogurt are the main perishable goods purchased
in supermarkets and convenience stores
100%
80%
60%
90%
87%
85%
75%
68%
60%
56%
50%
49%
45%
40%
20%
0%
Q: What kinds of perishable fresh goods, refrigerated foods and frozen foods
do you usually buy in supermarkets and convenience stores?
Base: 545 respondents who purchase food in supermarkets or convenient stores
Consumers are buying more perishable fresh goods,
refrigerated foods or frozen foods in supermarkets and
convenience stores
39%
Yes
61%
No
Q: In the past one year, have you purchased more perishable fresh goods,
refrigerated foods or frozen foods in supermarkets and convenience stores than
you did before?
Why? Because the quality and freshness are superior & the
food source is more credible
64%
60%
55%
54%
52%
46%
Quality and freshness are superior in supermarkets
Food source is more credible in supermarkets
Can shop for food and other consumer goods at the same time
Quality refrigeration equipment and a clean environment
Supermarkets offer a lot more choices
Supermarkets are closer to my home
31%
28%
22%
Supermarkets have longer opening hours
Supermarkets offer competitive prices
Supermarkets provide better customer service
Other reasons
0%
2%
20%
40%
60%
80%
100%
Q: Why are you purchasing more perishable fresh goods, refrigerated foods
or frozen foods from supermarkets and convenience stores?
Base: 337 respondents who purchased more from supermarkets
Purchase of perishable foods in supermarkets is not declining
I didn’t purchase less, I kept purchase at the same level
46%
31%
Fresh goods and food sold in supermarkets are expensive
Supermarkets offer fewer choices
28%
Quality and freshness are inferior in supermarkets
17%
Food source is not credible in supermarkets
9%
Supermarkets are not close to my home
7%
Supermarkets don’t provide quality refrigeration equipment
or a clean shopping environment
Other reasons
6%
Supermarkets’ customer service is not good
5%
1%
0%
20%
40%
60%
80%
100%
Q: Why aren’t you purchasing more perishable fresh goods, refrigerated foods
or frozen foods from supermarkets and convenience stores?
Base: 211 respondents who didn’t purchase more
Consumers know that perishable goods need to kept at the
recommended temperature all the time
30%
Yes
No
70%
Q: Do you know that perishable fresh goods, refrigerated foods and frozen foods should be
kept chilled at their recommended temperatures during the whole transportation journey?
But they don’t know the recommended temperatures
Type of Food
Recommended
Temperature
Consumers Answered
Correctly
2°C
28%
4°C
68%
Yogurt
4°C
67%
Frozen meat
Below -18°C
24%
Ice cream
Below -18°C
23%
Frozen seafood
Below -18°C
18%
Chilled meat
(beef, pork, chicken, etc.)
Fresh milk
Q: What are the recommended temperatures to store refrigerated foods?
Only 1.5% answered all the questions correctly
1.5%
Misconceptions exist among many Chinese consumers
Statement
After you purchase refrigerated foods from stores, you need to go
home and put the foods in a refrigerator as soon as possible to ensure
food safety.
The expiry dates on packages of perishable fresh goods, refrigerated
foods and frozen foods should always be valid regardless of the
temperatures foods are kept.
Keeping the food at a very low temperature like -10℃ can kill bacteria
in it and keep food safe.
Although ice cream melts during transportation, as long as it is frozen
again at the retail store, it is still safe for consumption.
Answer
True
Consumers
Answered
Correctly
95%
False
57%
False
35%
False
57%
Q: Consumers were asked whether the following statements were true or false
Consumers who answered all questions correctly
15%
Half of Chinese consumers believe that they can determine if
the refrigerated foods are well refrigerated
51%
49%
Yes, I can
No, I can't
Q: When food shopping, is there a way to determine if the frozen and chilled
perishable goods are well refrigerated in stores and during transportation?
Many consumers rely on the expiry date
Check the expiry date
74%
Touch the food/packages and look at it
70%
Only buy from trusted/well-established stores
52%
Rely on past shopping experience
51%
Look at the display case and see whether it is
working properly
26%
22%
Note the temperature of display case in stores
8%
Ask the sales people
0%
20%
Q: How do you make the judgment?
Base: 269 respondents who think they can determine if foods are well refrigerated
40%
60%
80%
100%
Consumers trust large supermarkets to handle and store
perishable goods properly
100%
91%
80%
60%
40%
20%
4%
0%
Large
supermarket
3%
0.2%
2%
Small
Wet market
Online
Others
supermarket /
Convenience
store
Q: Which type of stores do you trust the most to have frozen and chilled perishable goods that
have been stored at a proper temperature for safety and quality? (One choice)
Nearly half are not willing to pay any more to
ensure food quality and safety
4%
3%
17%
47%
No less than 10%
7%
5%
2%
29%
0%
Q: If you need to pay more for perishable fresh foods, refrigerated or frozen foods which had been
properly refrigerated, how much more are you willing to pay to ensure food quality and safety?
Conclusion
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•
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Shopping for food at supermarkets and convenience stores continues to rise in
the surveyed Chinese cities, with food safety concerns being one of the key
drivers.
Although consumers perceive that large supermarkets are better in handling
and storing foods, smaller retailers are catching up fast in term of improving
food safety.
Smaller retailers can increase competitiveness if they continue to improve their
cold chain infrastructure.
However, this study indicates that the costs of improving a cold chain system
cannot be easily shifted to consumers.
Finding a cost-effective way to improve food safety while minimizing operating
costs will be critical for any retailer to succeed in the China market.
Supermarket evolution
Case study: DIA deployed intelligent store solution
to improve food safety and save costs
Fast-growing supermarket industry in China
•
•
•
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Over the five years through 2013, the supermarket industry in China has
been growing at an annualized rate of 12.3% to reach US$141.1 billion.*
Consumers are asking for improved food safety in China and they rely on
retailers to ensure food quality and safety.
Standards and best practices in handling and storing refrigerated foods are
not well defined in China.
From the survey, consumers don't expect that retailers will shift additional
costs to them.
Retailers face the quandary of having to increase prices to invest in better
equipment and human resources.
* IBISWorld: Supermarkets in China: Market Research Report
Challenges facing supermarkets
Food safety challenges
• Lack of real time monitoring – food safety compromises can happen without
anyone knowing.
• Manual checks result in human error.
• Store staff lack technical training – takes time to identify issues.
Operational challenges
• Difficult to gather, save and analyze records – no optimization, resulting in
excessive energy consumption.
• Inadequate training combined with staff turnover – inability to ensure a consistent
quality assurance practice.
• Slow response to an equipment malfunction increases food spoilage
• Budget constraints often make stores focus on short-term cost benefits while
sacrificing long-term efficiency savings and food safety gains.
Intelligent store improves food safety and saves cost
•
DIA, one of the world’s leading discount
supermarket chains, founded in Madrid, Spain.
– 7,000 stores in six countries
– DIA opened its first store in China in 2003. DIA now has
around 400 stores in China (most of them in Shanghai)
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•
•
DIA spends around US$1.5 million (RMB 9.2 million)
a year investing in the latest technology and
equipment upgrades in China every year.
DIA is keen to invest in the latest cold chain
infrastructure so that food safety and operational
efficiency can be further improved.
Emerson Climate Technologies was selected by DIA
to deploy intelligent facility management systems in
22 DIA stores in the Shanghai area over the past two
years.
How the intelligent store concept works
•
•
•
•
Monitor and control airconditioning, lighting and
refrigeration systems.
Timely response to equipment
malfunctions.
Provide data to optimize systems
and increase efficiency.
Reliable and highly efficient
condensing units to save energy.
Benefits realized by DIA
•
•
•
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Check and record operational data in real
time: Quick response ensures food safety and
reduces food spoilage costs.
Automatic monitoring process: Avoid
misreading and human error. Access and
control the equipment remotely.
Track, store and analyze store equipment
data: Optimize operations of equipment to
help ensure food safety in all stores while
minimizing electricity costs.
Upgraded condensing unit using Copeland
Scroll™ Digital technology: Save energy and
offer greater flexibility by adjusting system
output.
LED lighting: Reduces electricity costs.
Environmental conservation: Through the
reduction in carbon emissions.
As a result:
• 24% energy saving in
each store on average:
half of the savings came
from the improved
refrigeration systems.
• A DIA store can save RMB
22,000 a year on
average.
• Deploying the Emerson’s
solution in a store takes 5
to 7 days. The payback
period is within two
years.
Future development
•
•
Install intelligent facility management systems in new and existing stores.
Intelligent systems throughout the end-to-end cold chain
– Similar monitoring and control systems in Shanghai warehouse.
– Testing GPS-based monitoring systems in refrigerated trucks.
•
Ensure that foods are refrigerated and handled properly throughout DIA’s
distribution network.
Emerson’s recommendations
Emerson urges more industry collaboration to
improve food safety in China
• The cold chain industry, retailers and the government
agencies in China should provide more education to
consumers.
• Promote and facilitate the deployment of best-in-class
technologies throughout the cold chain to improve food
safety, increase efficiency and reduce costs.
• Industry players should collaborate to support interoperability
and best practices throughout the supply chain.
• Establish improved national standards for the refrigeration
industry.
Media Q&A
Thank You